Charity vs. Nonprofit. You may or may not know that those two have different meanings! They both doing amazing, mission-centred work! But there are more rules and regulations for charities (if you’re in the US, that’s a 501c3) which means it takes a lot more time and resources to get going.
Many nonprofits have aspirations to become a charity, but one of the biggest questions I get asked along the way is - “how do we fundraise without charitable status?” You see - nonprofits cannot issue tax receipts to donors.
Now - the short answer is that donors are not giving for the receipts.
But the long answer is that there is a formal structure - in Canada called a Shared Platform and in the US Fiscal Sponsorship - that allows emerging nonprofits to issue tax receipts and then some!
There are lots of reasons why this model is growing in popularity. So much so that Mackenzie Scott herself invested in today’s podcast guest’s organization - to the tune of $18.9 million.
Join me for this conversation all about Shared Platforms with Lizzie Howell, Director, Shared Platform at MakeWay. With MakeWay’s shared platform, changemakers share a suite of centralized organizational supports, and coaching when needed, so more time and money can go towards building strong, vibrant, just communities and a healthier planet.
Myths that Lizzie wants us to walk away from:
- Only big organizations can host a Shared Platform. MakeWay is unique in that they are the only Shared Platform host that has gone through an audit - so they have formalized the operations of Shared Platforms in accordance with Canada Revenue Agency. However, there are many smaller charities that also act as a Shared Platform for nonprofits that are aligned with their work.
- It’s just about issuing tax receipts. Established Shared Platforms do much more than allow your nonprofit to issue receipts for donations. They offer structure and support to help grow your impact.
Lizzie’s thoughts around Shared Platform
- Support: As part of a shared platform, you can have access to a wide range of operational administrative support on the backend including financial management, human resources, grounds administration, charitable compliance, risk management. You get to focus on doing the work that you want to do, and create change in the community.
- Efficient: It's a way to operate within the charitable sector that's far more cost and time effective than becoming a new charity.
- Expertise: MakeWay has a great governance structure set up to support projects where they each have a steering committee who are responsible for providing strategic advice and direction for projects.
Favourite Quotes from Today’s Episode
“We really value the autonomy of projects to be able to make their own decisions around things like compensation, and again, different groups have, different values in terms of who they hire and what that looks like and at MakeWay, overrule, we have a commitment to equity, to economic well being, and we realize that we're in a position where we were providing guidance advice, and of course, with the legal employer.”
