2009/3/19 Michael Bimmler mbimmler@gmail.com:
On Thu, Mar 19, 2009 at 2:38 PM, Thomas Dalton thomas.dalton@gmail.com wrote:
Yes, I think WMF has handled it all in the past, but I think it might be easier if we do it. The WMF won't get the same charitable benefits that we do.
Understood and I defer to the judgment of others on whether it would be easier for WmUK (through a subsidiary) or WMF to handle it. I would just advise to actually take this up with the WMF (Cary Bass and Mike Godwin) before relying on this for strategic planning - it might be that the WMF objects to *not* being the formal organiser. I'm not saying they will, I just think that this should be confirmed with them before you act according to a "We will be Wikimania 2010 organisers" scenario (all of course contingent upon whether Oxford actually succeeds in the bid, but this should be known rather soon and I actually do not have many doubts ;-)
Indeed. I am sure that, whoever wins, there will be lots of talks between WMF and the local team before anything happens.
Opening a trading subsidiary may become necessary at some point even if we don't need it for Wikimania - for example, if we sell more than £5000 worth (that's income, not profit) of chapter merchandise in a year (that's a lot of merchandise, I know, I think big!) we would be taxed if it didn't go through a subsidiary.
Hm. Well, think big, yes, but I doubt whether Wikimedia France and Wikimedia Germany have ever exceeded this sum in a year, and they're both more established chapters with a larger country to serve. But then, I'm all for optimism...just do make sure to check whether the expenses (time and money) for setting up and registering a new subsidiary will not actually exceed the profit (or even the income) made in the end. It would be a pity if we paid twice as many registration fees than we get from selling merchandise!
Absolutely - it's unlikely to be worth it for merchandise alone, but that was the first example that came to mind!
We also have plans for annual UK conferences (combined with our AGMs) - if those get big enough to involve significant business risk, they would need to go through a subsidiary as well.
But is this really common practice? I can again only speak for Switzerland here, but I'm familiar with the practices of a few largish NGOs (Amnesty International, WWF etc.) and they never open a subsidiary for their annual conferences or indeed any other large event. They just take the risk qua charity.
Do you know how this is usually handled in the UK? Do other big UK NGOs often create subsidiaries for such and other purposes?
In the UK, charities aren't legally allowed to take significant business risks. How familiar are you with the internal workings of these NGOs? Trading subsidiaries are just a technicality, they rarely get mentioned to the general public. They probably wouldn't open a new subsidiary for each event, they would just have one for all their trading activities. "Amnesty International (Trading) Ltd." or similar. Unless you were closely involved with the inner workings of the NGO, you probably wouldn't notice anything. If you did business with them you might receive letters with a few lines of small print at the bottom, part of which would say "X (Trading) Ltd. is a wholly owned subsidiary of X", and that's all you would know of it! Trading subsidiaries don't even need to have separate bank accounts to their parent (although they need separate accounts in the accounting sense), so you wouldn't even need to write cheques out to a different name.