I think that making preparations for both drafting a complaint to HMRC and preparing an application to CC should start now. Even if the preparations are only minor. Delaying either by any real length of time could affect Wikimania significantly.
Our estimates for the venue are based on having charity status and bookings need to happen in quick sucession to winning the bid. If we can start making preparations now it may also alleviate any concerns that the jury/public may have with this.
Joseph Seddon
2009/3/18 joseph seddon life_is_bitter_sweet@hotmail.co.uk:
I think that making preparations for both drafting a complaint to HMRC and preparing an application to CC should start now. Even if the preparations are only minor. Delaying either by any real length of time could affect Wikimania significantly.
Our estimates for the venue are based on having charity status and bookings need to happen in quick sucession to winning the bid. If we can start making preparations now it may also alleviate any concerns that the jury/public may have with this.
We are a charity now, just an exempt one that doesn't have tax-free status. I agree it is something we need to work on ASAP, though - perhaps something for after the AGM, however, since I think the current board are rather busy!
If we win the bid, there are all kinds of legal stuff we'll have to sort out - if everything will be done through us (rather than WMF), which I think is likely, we will need to open a trading subsidiary. I think the business risk of hosting Wikimania is too great for a charity to do it directly. (We'll worry about that after we win, though!)
PS I am thinking of adding another £10k to the budget for admin, though - there will be lots of legal fees and accounting fees, at least some of which should be allocated to Wikimania (some can be considered general expenses and paid for out of the main WM UK accounts). Hopefully we can get it done pro-bono, but it should probably be on the budget.
On Wed, Mar 18, 2009 at 2:53 PM, Thomas Dalton thomas.dalton@gmail.comwrote:
If we win the bid, there are all kinds of legal stuff we'll have to sort out - if everything will be done through us (rather than WMF), which I think is likely, we will need to open a trading subsidiary.
Do we know how other Wikimania organising teams did this (....Delphine...?)
I can't remember having heard of any local trading company having been opened anywhere for this. Was it not usually the WMF that would have signed contracts if necessary? See also eg. http://wikimania2009.wikimedia.org/wiki/Contact "*Wikimania* is a yearly international conference organised by the Wikimedia Foundation http://wikimediafoundation.org/wiki/."
Michael
2009/3/19 Michael Bimmler mbimmler@gmail.com:
On Wed, Mar 18, 2009 at 2:53 PM, Thomas Dalton thomas.dalton@gmail.com wrote:
If we win the bid, there are all kinds of legal stuff we'll have to sort out - if everything will be done through us (rather than WMF), which I think is likely, we will need to open a trading subsidiary.
Do we know how other Wikimania organising teams did this (....Delphine...?)
I can't remember having heard of any local trading company having been opened anywhere for this. Was it not usually the WMF that would have signed contracts if necessary? See also eg. http://wikimania2009.wikimedia.org/wiki/Contact "Wikimania is a yearly international conference organised by the Wikimedia Foundation."
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. 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. 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.
On Thu, Mar 19, 2009 at 2:38 PM, Thomas Dalton thomas.dalton@gmail.comwrote:
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 ;-)
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!
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?
Regards, Michael
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.
On Thu, Mar 19, 2009 at 3:16 PM, Thomas Dalton thomas.dalton@gmail.comwrote:
In the UK, charities aren't legally allowed to take significant business risks.
See, that's one of the points which I didn't know and I'd be interested in reading more about it. Is there guidance available on what constitutes significant business risk?
How familiar are you with the internal workings of these NGOs?
I've interned for two Swiss NGOs and in the second of them, I have been closely involved (well, as closely as you can be in an office with just 15 employees) in the preparation of the Annual Meeting 2009 of one of them, which will involve several hundreds of participants, including (European) heads of states and senior ministers / UN agencies heads. The budget for it runs into atmospheric heights (what with renting a well-known hotel and organising a lot of social events), but it has not been "outsourced" to a trading subsidiary. I know for a fact that Swiss law does not have a "charity may not take significant business risks" provisions, therefore I maintain that this is not a usual practice here. But this is really not so important, after all we want to look at how things are done in the UK.
Michael
2009/3/19 Michael Bimmler mbimmler@gmail.com:
On Thu, Mar 19, 2009 at 3:16 PM, Thomas Dalton thomas.dalton@gmail.com wrote:
In the UK, charities aren't legally allowed to take significant business risks.
See, that's one of the points which I didn't know and I'd be interested in reading more about it. Is there guidance available on what constitutes significant business risk?
If you really want to know all the ugly details (and don't say I didn't warn you!), see: http://www.charitycommission.gov.uk/publications/cc35.asp
2009/3/19 Thomas Dalton thomas.dalton@gmail.com:
If you really want to know all the ugly details (and don't say I didn't warn you!), see: http://www.charitycommission.gov.uk/publications/cc35.asp
I've just been reading through that guidance again myself, and actually we might be ok. The conference would probably fall under "primary purpose trading", which you are allowed to take risks doing. I knew primary purpose trading was tax exempt without the need for a subsidiary, but I thought the risk requirement still applied, but it looks like I may have misremembered that. This is why we need to seek professional advice on these things!
I know for a fact that Swiss law does not have a "charity may not take significant business risks" provisions, therefore I maintain that this is not a usual practice here. But this is really not so important, after all we want to look at how things are done in the UK.
Michael
-- Michael Bimmler mailto:mbimmler@gmail.commbimmler@gmail.com
Take a look at housing associations, many of whom are registered charities (or Industrial and Provident Societies) and who have been involved in swapping toxic assets.
http://www.insidehousing.co.uk/story.aspx?storycode=6503040
Also recall how local authorities got their fingers burned in Iceland...
Gordo
Why is registered charity status predicated on a successful Wikimania bid?
Gordo
On Mar 18, 12:54 pm, "joseph seddon " life_is_bitter_sw...@hotmail.co.uk wrote:
I think that making preparations for both drafting a complaint to HMRC and preparing an application to CC should start now. Even if the preparations are only minor. Delaying either by any real length of time could affect Wikimania significantly.
I agree entirely. Complaint letter has already been drafted and will hopefully go out tomorrow. I think the CC application should be ready to be put in the post the day after we win Wikimania? Even better, anyone know a benefactor willing to give us £4,700? Or a few to give us £1,000 each? They can even earmark it to whatever they want, just so we get the income to qualify!
Andrew
2009/3/18 AndrewRT raturvey@yahoo.co.uk:
On Mar 18, 12:54 pm, "joseph seddon " life_is_bitter_sw...@hotmail.co.uk wrote:
I think that making preparations for both drafting a complaint to HMRC and preparing an application to CC should start now. Even if the preparations are only minor. Delaying either by any real length of time could affect Wikimania significantly.
I agree entirely. Complaint letter has already been drafted and will hopefully go out tomorrow. I think the CC application should be ready to be put in the post the day after we win Wikimania? Even better, anyone know a benefactor willing to give us £4,700? Or a few to give us £1,000 each? They can even earmark it to whatever they want, just so we get the income to qualify!
You may have to wait a little after we win the bid in order to get confirmed sponsorships - CC will almost certainly want written confirmation (unconditionally, that is - what we have at the moment is all conditional on us winning the bid). If the current board has time to do it, starting work on the CC application now wouldn't hurt.
On Mar 18, 11:39 pm, Thomas Dalton thomas.dal...@gmail.com wrote:
... CC [Charity Commission] will almost certainly want written confirmation (unconditionally, that is - what we have at the moment is all conditional on us winning the bid)
The CC application form (http://www.charitycommission.gov.uk/Library/ publications/pdfs/cc5atext.pdf) asks, for charities which do not yet have statutory accounts, for the "estimated gross income in the first year of operation". The accompanying guidance notes (http:// www.charitycommission.gov.uk/Library/publications/pdfs/cc5btext.pdf) go on to say state that "If you do not provide evidence that the gross annual income will exceed £5,000, such as ... a pledge of funding ... we will return your application as incomplete"
Hopefully we'll have these by the time the bid is decided.
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