Why Spin Off?
In many cases, there is not a regulatory requirement to spin off a commercial venture. Indeed, many charities have very successful businesses operating under one umbrella organization. However, there are some good reasons beyond the regulatory to serious consider making your commercial venture a separate entity: • Provides focus to your management team. Each organization has its own mission to pursue. • Avoids management distraction. Setting up a business and dealing with a business crisis takes a lot of work. A separate management team keeps the charity on the ball and on mission. • Reduces bureaucracy. A small independent venture can be nimble. A small program in a big charity can be forgotten. • Aligns talent. Managing a charity requires a different skill set than managing a business. Similarly, a separate business can attract a board of experts in your industry. • Transparency and simplicity. Donors or investors can support the organization that is the right fit for their needs. •
