Earning your own income

Not-for-profit organisations have traditionally received much of their funding from the state, individual donations and grant makers. However, in recent years there has been less public money and more competition for it. What has grown is social enterprise. This is simply selling your knowledge and or services. This can be directly to customers or via a contract with a commissioner.

Most not-for-profit organisations have knowledge and services that they could sell, though not necessarily to their traditional beneficiaries.

Charities can trade goods and services and there are clear guidelines from the Charity Commission and HMRC on when such trading has tax implications.

If you are a charity you do not necessarily have to change your legal structure to earn income through trading. However, there is also a newer legal structure, a Community Interest Company (CIC), which was set up to aid social enterprise trading. CICs have their own regulator

Top Tip

Social enterprise is about trading activity, not about the legal structure of the organisation.

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