I don't know your jurisdiction (US or not), but I do know that in the US, there are several classes of nonprofits, but that donations are tax-deductible to all of them. That is, donations of cash or materials. You can't donate services or time. As for classes, there are religious nonprofits, fraternal/sororal nonprofits (like the Masons or the Elks or the Shriners), hmm... educational, I think, and then the general class which has its own name that I can't recall right now.
Unlike a sole proprietorship, there is an outlay to set up a nonprofit, because you do need someone legal to do the paperwork, IIRC. Generally speaking, though -- very very generally because it's late at night and I'm kinda fuzzy right now, so hopefully someone will come along & correct me if needed -- I believe the major requirement is that you must have a mission statement, and be able to prove that all work you do (including outlays) are somehow related to that mission.
That said, there are quasi-businesses I've known that are nonprofits, like spinning/weaving guilds. One back in DC had classes (that you paid for), and a shop (where you bought stuff), but the guild itself was nonprofit. It's not like you can't exchange money for goods with a nonprofit (who sell stuff all the time to raise money), and the range of nonprofits is incredibly broad. The real issue is that you want to provide a service that the govt can't provide and businesses won't provide, and I'd say that fits, here.
The catch is that I don't know of any NFPs that are entirely online. I mean, I'd think there'd be some by now, but that means research. And by entirely online, I mean nothing tangible in terms of, idk, like annual donation drives for children-in-poverty holiday gifts, or food drives, that kind of tangible benefit. Yet there are NFPs whose mission revolves around engendering education in some way, so I'd imagine someone has to have taken that online.
The other catch is that people rarely invest in NFPs. They invest in something where they can get a return, but then we're back to the SEC and its issue with crowdfunding into shareholders... but at the same time, opening the door to investors means opening the door to other people making the decision that may or may not reflect the userbase. An NFP only answers (by US tax law) to its mission; if it deviates from its mission, it can have its status revoked. Like if I'm on the board of an NFP and I use $500 of NFP money to, say, take my dogs to the vet... that's not part of the mission. But if I use $500 to take five people to dinner as part of convincing them to donate money, then that's fundraising (which is considered "working towards continuing the mission", in the sense that you do have to fund these things, so fundraising is a kind of earning money to keep the NFP going -- which covers a lot, including mailings, radio ads, billboards, and so on).
Back to the advertising: I think the best would be starting with general targeting -- ie, these are fanworks (of whatever type), and you're a fan. I think it'd be best to only accept advertising from members and/or active communities. Or maybe instead of thinking of it as selling items, the column space could be for "sponsored" communities -- that is, groups (or single people?) who donate a little extra, and they get a public thank-you, just like any NFP does for those who sponsor, gift, donate more, etc. Then it's not advertising, per se, it's a public thank-you. One NFP I'm currently working with is now doing that on their website, where sponsoring businesses get what could be considered an 'advertisement' but is really an extra way to thank them, by having their name/logo be larger on the main page.
Thing is... the advertisement-by-members means there'd be the risk of some company starting its own mediocre one or two link community, and then purchasing a bunch of advertising, seeing it as a space with little to no competition. That, I'd be not so keen on, but how to prevent it, I'm not sure -- unless it were simply treated like any other NFP. You got your people who donate above X amount, they're "patrons", and people who donate above Y amount, they're "supporters", and down the line. (Just think of what you see in the general handbill at your major city live theater or art museum.)
Sorry for the rambling, it's been a looooong day. Ah, also, about NFPs... I'm almost positive that one requirement is that you be open to the public and/or non-discriminatory in your mission for the public. Like the Shriners, who are invite-only per membership -- but their hospitals are definitely for everyone, and they do a lot of work reaching out to people who'd otherwise be unable to afford childrens' medical bills. So on the one hand, there's a private element, but on the other hand, who they help is public -- and I think a website on the structure discussed here (free for everyone, with option of paying to receive extras) does qualify. I just haven't had a real chance to sit down and puzzle out what the mission would be, towards that end. Time for research!
no subject
Date: 8 Oct 2011 06:25 am (UTC)Unlike a sole proprietorship, there is an outlay to set up a nonprofit, because you do need someone legal to do the paperwork, IIRC. Generally speaking, though -- very very generally because it's late at night and I'm kinda fuzzy right now, so hopefully someone will come along & correct me if needed -- I believe the major requirement is that you must have a mission statement, and be able to prove that all work you do (including outlays) are somehow related to that mission.
That said, there are quasi-businesses I've known that are nonprofits, like spinning/weaving guilds. One back in DC had classes (that you paid for), and a shop (where you bought stuff), but the guild itself was nonprofit. It's not like you can't exchange money for goods with a nonprofit (who sell stuff all the time to raise money), and the range of nonprofits is incredibly broad. The real issue is that you want to provide a service that the govt can't provide and businesses won't provide, and I'd say that fits, here.
The catch is that I don't know of any NFPs that are entirely online. I mean, I'd think there'd be some by now, but that means research. And by entirely online, I mean nothing tangible in terms of, idk, like annual donation drives for children-in-poverty holiday gifts, or food drives, that kind of tangible benefit. Yet there are NFPs whose mission revolves around engendering education in some way, so I'd imagine someone has to have taken that online.
The other catch is that people rarely invest in NFPs. They invest in something where they can get a return, but then we're back to the SEC and its issue with crowdfunding into shareholders... but at the same time, opening the door to investors means opening the door to other people making the decision that may or may not reflect the userbase. An NFP only answers (by US tax law) to its mission; if it deviates from its mission, it can have its status revoked. Like if I'm on the board of an NFP and I use $500 of NFP money to, say, take my dogs to the vet... that's not part of the mission. But if I use $500 to take five people to dinner as part of convincing them to donate money, then that's fundraising (which is considered "working towards continuing the mission", in the sense that you do have to fund these things, so fundraising is a kind of earning money to keep the NFP going -- which covers a lot, including mailings, radio ads, billboards, and so on).
Back to the advertising: I think the best would be starting with general targeting -- ie, these are fanworks (of whatever type), and you're a fan. I think it'd be best to only accept advertising from members and/or active communities. Or maybe instead of thinking of it as selling items, the column space could be for "sponsored" communities -- that is, groups (or single people?) who donate a little extra, and they get a public thank-you, just like any NFP does for those who sponsor, gift, donate more, etc. Then it's not advertising, per se, it's a public thank-you. One NFP I'm currently working with is now doing that on their website, where sponsoring businesses get what could be considered an 'advertisement' but is really an extra way to thank them, by having their name/logo be larger on the main page.
Thing is... the advertisement-by-members means there'd be the risk of some company starting its own mediocre one or two link community, and then purchasing a bunch of advertising, seeing it as a space with little to no competition. That, I'd be not so keen on, but how to prevent it, I'm not sure -- unless it were simply treated like any other NFP. You got your people who donate above X amount, they're "patrons", and people who donate above Y amount, they're "supporters", and down the line. (Just think of what you see in the general handbill at your major city live theater or art museum.)
Sorry for the rambling, it's been a looooong day. Ah, also, about NFPs... I'm almost positive that one requirement is that you be open to the public and/or non-discriminatory in your mission for the public. Like the Shriners, who are invite-only per membership -- but their hospitals are definitely for everyone, and they do a lot of work reaching out to people who'd otherwise be unable to afford childrens' medical bills. So on the one hand, there's a private element, but on the other hand, who they help is public -- and I think a website on the structure discussed here (free for everyone, with option of paying to receive extras) does qualify. I just haven't had a real chance to sit down and puzzle out what the mission would be, towards that end. Time for research!