Not-for-profit or for-profit?
Why we have chosen an incorporate association structure A significant number of discussions have been developed around what the legal incorporation of the coworking space should be. The current model is for the Ballarat Co-Lab to be set-up as a not-for-profit incorporated association during a transition phase when the governance/corporate model will shift from the responsibility lying with Here Studio Pty Ltd.
Not-for-profit incorporated association
For-profit company
•• easier to access funding grants government, philanthropic, etc
•• easier to get legal advice, people are very familiar with company structure
•• easier for members to volunteer in building, running of the space, hosting
•• encourages seeing members as clients
•• cheaper and easier to establish as a registered entity •• shift of focus from financial to core values of the organisation •• members have ownership/responsibility to support and “sell” the space
•• more costly to establish as a registered entity •• most case studies of coworking spaces are for-profit businesses •• driven by few owners with personal interests (empowered team) •• quick decision-making, top-down
•• members will encourage organisation to benefit them and their projects •• allows partnerships with like-minded incorporated associations (such as Ballarat Business Centre) •• focus on giving to members rather than taking from them (and allowing members to focus on their own independent businesses)
here studio
•• Ballarat Co-Lab could provide grants or auspice other individuals/organisations
•• focus on financial outcomes which brings culture of business success •• people in start-up to get ongoing financial return (core team) •• limited return not attractive for investors •• low turnover compared to start-up costs •• less saleable business because majority of the assets are intangible
The not-for-profit incorporated association structure allows the Ballarat Co-Lab to uphold its ideas of community involvement and sense of ownership. There are many opportunities to run a genuine bottom-up process where people can contribute their time and resources, which cannot be done with commercial rates and/or if the corporate structure was based on a for-profit model. We have already realised this in the stage 2, employing three residents of Ballarat (plus one volunteer) and building on the assets and capacity of the community. The not-for-profit incorporated association would have a Board that would be established prior to the opening of the coworking space in April 2014. Our intention is for the incorporated association structure to allow operations to be based more on the values and vision of coworking, as well as growing the culture of the members and supporting their goals. The Board could sit over this and interface with the capital side of the operations. While there are ongoing questions regarding raising funds for future capital, the current assumption is that the capital start-up would be provided by the City of Ballarat.
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