We’ve been batting around the idea of becoming a non profit for almost a year, and have recently set a goal to decide once and for all.
We aren’t interested in making a profit with the trip planner, but would like to some how gather enough money to cover costs and perhaps pay the people that work on it. Being a non profit will give us access to much needed funds, but we are concerned that it will limit the types of things we are able to do with our software.
Some of our concerns are:
- what will happen to the soft ware if we do become a non-profit and later dissolve?
- what kinds of limitations will it place upon us?
- are we even eligible to attain non profit status?
Should byCycle become a non profit? Let us know by making a comment below.
Non-profit status sounds perfect for what you are doing. Talking to an attorney would probably be the quickest way to answer your questions and get to the point where you feel you can make an informed decision. Someone out there would probably give you at least a free initial consultation. There is a attorney listed in the Redirect Guide who specializes in bicycle law–maybe not the person you need ultimately but he might be a good place to start since it sounds like he may be an advocate. Feel free to email me if you want his name. Take care and good luck!
Tricky subject. Being a FOR profit means that you can re-invest back into the program in any way that you see fit, without restrictions. Also, I think that there are less restrictions when dealing with government municipalities as a FOR profit ( a.k.a. contractor ). Being a NON profit allows you to offer tax deductions for those who contribute money to the organization and it can also can plug you into the grant scene. Hmmm….tricky.
I’d say take the plunge and be a non-profit if you’re thinking about it. If being a non-profit hampers your ability to grow the software at a later date, then do what Mozilla did. They spun out a corporation that is 100% owned by the Mozilla Foundation. The non-profit ownership ensures it will always ‘do good’, while being a corporation gives one all the flexibility of ‘the best law money can buy’.
As for your questions, IANAL, but a non-profit is just a special kind of corporation, so the same thing happens to the code if you later dissolve.
Limitations – you have to stick to your mission, and there’s a cap to the percentage of income you can make from things that aren’t specifically related to your mission.
You’re probably eligible for non-profit status. If you want a good lawyer a friend is big in to bike stuff in NYC and sets up lots of non-profits. Feel free to contact me with any questions.