Symbiotic Business & Charity

cormie

Hey folks,
Would anyone have any experience in running a business and charity that work in symbiosis, where for example, the products/services being sold in the business follow the ethos of what the charity is about and perhaps a % of sales go to the charity and at the same time, the charity helps promote the business too.

So it would basically be the same owners behind both and maybe even the same name, but for the finances to be kept separate where for example, people could donate direct to the charity and this would fund charitable work and there may be passionate volunteers involved in this side of things, but then there's a proper business too where the guys in charge can make a decent living from the product/service side of things, not from donations and not be demonised the way the higher ups in a lot of charities are, even those who take modest wages for the hours and work they do

The idea behind it would be to allow those who run it work for a cause they are passionate about while both making a decent living and greatly helping the cause through charitable means.

Any feedback would be great

Graham

Given the (appropriate) increasing scrutiny charities find themselves operating under, would you be concerned that supporters of the charity could feel misled if/when they discovered it was so closely intertwined with a commercial venture?

I think I get what you're suggesting and I'm sure your intentions are good, I just can't help think there's scope for it to backfire.

It might be worth investigating to see if there are any other organisations operating under a similar structure.

Lockedout2

What's wrong with a charity paying its CEO a proper salary? A social enterprise generates its income from a product or service that is traded.

There are way too many charities in Ireland most of which are just funded by the state.

I'd be inclined to set up your business and be very upfront about the payments to senior staff and drive on. Your reputation is key so protect it. Remember you might think it's a charity but it may just be a social enterprise.

cormie

I'm not too sure what category it would fall under really. I'm not sure it would really be a social enterprise. It's hard to explain without going into too much detail, but I don't think supporters of the charity would have any ill feeling to know the two are operating together. The nature of the product/service is in effect, assisting with the cause anyway, but the charity element would take it even further and they would be of mutual benefit to eachother.

I remember myself being offered to buy some scratch cards on the street in Dublin and when I questioned how much actually goes to the cause direct, it was shockingly low. I understand overheads and all that have to be paid and workers need to of course make a living, but when I found out I didn't buy anything.

I'd want this run with as best intentions as possible, it's something I and many others would be passionate about. I had been thinking about both avenues separately before and never thought to combine them until this morning hence the thread

jimmii

I am working with a charity on their retail offering right now no one has any issue with the charity having a lot of commercial activity at all and staff taking reasonable wages. The commercial arm funds the charity so it's an important part of the project. There's a trading board and a charity board that make decisions which can make things a little tricky at times but they make it work.

cormie

Yeah, that's what I was thinking. Loads of charities operate through retail too, but I guess most of these are all set up with just paying the overheads and then a lot of the profit would go to the cause.

My idea would be to run both together, but separate at the same time, the business is not part of the charity and would operate as a regular business but would help the cause by the very means of its existence anyway and then possibly give so much per sale to the charity or something like that.

If the business side became a success and the owners wanted to sell it, the idea would be that they could, the same way any business could be sold. I don't think it really works that way for charities though. I mean you don't see the founders of a charity selling it for millions and retiring to the sunshine, or do you? I don't know

ironclaw

Hey Cormie, long time!

I was involved in a theater group for younger people a few years back. It was a social enterprise and not for profit on paper. Honestly, it was a nightmare. There was a lot of regulation and it stifled the growth of the organisation as every last cent needed to be accounted for and you had this delicate balancing act of paying professionals for their time and likewise not being a commercial unit. It ultimately failed.

I'd echo the other posters and say run the business commercially and mix in the charity on an above board, clear as day basis without getting bogged down as much as possible. Only caveat for a business supporting a charity would be tax, as I believe you can write off donations but your accountant would know more about that.

Birdsong

There is charity near where I work which supports people who have learning disabilities and some physical disabilities also. They have a café where they employ some of the people who attend their centre and it seems to be a great success. Is it something like this your thinking of

cormie

Thanks again for the input guys

It wouldn't really be anything like that, infact, I think it's more a brand I'm talking about. So setting up a goods/services brand and then the charity would fall under the same brand too, but they'd be kept separate.