Financial Issues

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Russ Garrett

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May 23, 2011, 8:23:55 PM5/23/11
to London Hack Space
I have just been informed by Hackney Council that we will not be
receiving any discount on our business rates. This is unexpected.
Their reasoning on this is mainly because "The residents of Hackney
are not the primary recipients of the services provided" (which is
true).

This means we have >£1500 to pay immediately (which we might have to
satisfy by taking out a short-term loan) and it will cost us around
£400 extra each month, on top of our existing budget. The new budget
is £4762/month.

Our current subscription revenue is £4,788/month, so we are still
pretty tight, but I think it's doable.

This decision means that it is a lot more advantageous to us to try
and get charitable status, and I think we're going to look into doing
that very soon.

--
Russ Garrett
ru...@garrett.co.uk

Russ Garrett

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May 24, 2011, 3:43:03 AM5/24/11
to London Hack Space
On 24 May 2011 01:23, Russ Garrett <ru...@garrett.co.uk> wrote:
> This means we have >£1500 to pay immediately (which we might have to
> satisfy by taking out a short-term loan) and it will cost us around
> £400 extra each month, on top of our existing budget. The new budget
> is £4762/month.

Regrettably I actually got this calculation wrong last night. The new
budget is actually £4,962, which gives us a shortfall of £200/month.

--
Russ Garrett
ru...@garrett.co.uk

Earthshine

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May 24, 2011, 8:37:12 AM5/24/11
to London Hackspace
Charitable status would seem to be sensible.Forming an outreach
committee might be beneficial as LHS would need to prove it was of
benefit to the public. Running free workshops either at the space or
externally would cover this.

Sam Cook

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May 24, 2011, 8:41:54 AM5/24/11
to london-h...@googlegroups.com
I think we are pretty covered in terms of showing benefit to the public (see here[1]) remember our members count as "the public" as well. Especially given that you don't have to pay subscription and you still get full use of the workshop etc. 

Nigel Worsley

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May 24, 2011, 9:19:23 AM5/24/11
to london-h...@googlegroups.com
If we were to become a charity then all pledge money from UK taxpayers
could be classed as gift aid - that could have brought in over �1000 in
the last year.

Nigle

James1024

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May 24, 2011, 9:16:31 AM5/24/11
to London Hackspace
This covers two posts, one about the charitable status and about
starting a Hackspace foundation. I know that local Scout groups are
considered charities but they are not registered in their own right.
The area or county will be registered as the charity and each local
group uses their number. It may be easier to get the Hackspace
foundation or whatever it ends up being call registered as a charity
that supports other hackspaces, then get each hackspace to be a member
so they can use the charity number etc. I am unsure of the mechanics
of this or if the Scout Assosiation have a special deal with the
Charity Commison but it might be worth looking into.

n May 24, 1:41 pm, Sam Cook <sam.lindenrat...@gmail.com> wrote:
> I think we are pretty covered in terms of showing benefit to the public (see
> here <http://www.charity-commission.gov.uk/Publications/cc21.aspx#7>[1])
> remember our members count as "the public" as well. Especially given that
> you don't have to pay subscription and you still get full use of the
> workshop etc.
>
> S
>
> [1]http://www.charity-commission.gov.uk/Publications/cc21.aspx#7
>

Nigel Worsley

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May 24, 2011, 9:26:05 AM5/24/11
to london-h...@googlegroups.com
A further though on gift aid, seeing as �5 is the minimum monthly
membership fee anything above this is effectively a donation and can
also be gift aided, should bring in an extra �750 a month!

Nigle

Russ Garrett

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May 24, 2011, 9:28:34 AM5/24/11
to london-h...@googlegroups.com

Yep, known, and it's likely we could treat the majority of
subscription income as gift aid too (anticipated to be ~£45k this
year, so an extra £10k or so). Combined with the ~£5000 we would save
on business rates, it's not an insignificant amount.

The main problem was that we were previously unsure if we had a public
benefit case, but now we're fairly sure we do.

--
Russ Garrett
ru...@garrett.co.uk

Sam Cook

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May 24, 2011, 9:31:22 AM5/24/11
to london-h...@googlegroups.com
I like this idea but I think it will be difficult to implement because each hackspace runs itself in its own way and having charitable status requires a certain set of rules to be followed. 

For example when the space was first started the subscription was £40/person/month. One of the rules for gaining charitable status is that you have to be accessible to all members of the public including those living in poverty. £40/month might make this tricky. 

Depending on how Uk hackspace foundation turns out it might be that it can extend charitable status to all hackspaces but it will be difficult to do without removing some level of autonomy from each space. It will also (likely) increase the amount of regs and checks that a new space has to adhere to. It's only just become really useful for us to be a charity so I don't know if the extra overhead would really be worth it for smaller groups....

That being said I don't know for certain on any of these points (it might reduce overhead for small groups) and this may be something worth mooting on the UK-hackspace list...

Russ Garrett

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May 24, 2011, 9:36:14 AM5/24/11
to london-h...@googlegroups.com
On 24 May 2011 14:16, James1024 <ja...@seventyf.co.uk> wrote:
> It may be easier to get the Hackspace
> foundation or whatever it ends up being call registered as a charity
> that supports other hackspaces, then get each hackspace to be a member
> so they can use the charity number etc

This is known as an "Umbrella charity" and works fine if you're
channelling large national donations down to smaller groups. However,
it wouldn't help us, because we still wouldn't be a charity, so we
wouldn't be eligible for the discount.

(Chances are we may make UK Hackerspaces a charity too, but that would
be separate.)

--
Russ Garrett
ru...@garrett.co.uk

Sam Kelly

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May 24, 2011, 9:49:41 AM5/24/11
to london-h...@googlegroups.com

 Every workshop we run is at a cost -way- below market rates, even for the nonmembers we specifically try to attract to them, so that's public education -  especially in the areas of sustainability, skills development, and reducing carbon footprint, which are also very sexy at the moment.

For that matter, the mailing list and associated knowledge base is a high-value public resource in itself, given how many non-members we get asking and being answered (and often then becoming members, or donating in return for workshop time).

Looking at the Charity Commission guidelines[1] I'd say that our purposes qualify under I.4 b, f, and j (I know I'm not the only one who'd be entirely without workshop/expensive-tool access without London Hackspace).

I.5 covers public benefit - we can easily show that our membership & wider clientele isn't geographically based, and we also don't make anything exclusively restricted to paying members AFAIK. Incidental private benefit (ie. members making stuff to sell) seems to be explicitly allowed.

Cheers,
Sam


[1] http://www.charity-commission.gov.uk/Publications/cc21.aspx - there are more detailed versions available, but this basically has it.


--
Sam Kelly, http://www.eithin.co.uk/

That's it.  We're not messing around anymore, we're buying a bigger dictionary.  -  Tibor Fischer, The Thought Gang.
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