NFPs are typically set up with the sole purpose of increasing the public’s knowledge of a particular cause. The passion and desire exhibited by its founders are critical elements in establishing the cause.
Consider the risks
Before you look at setting up an NFP, it is important you consider the risks. The main risk which founders are typically unaware of is the significant regulation involved in running such organisations. These regulations are set in place in order to maintain public and government trust in NFP organisations which typically are subject to various tax concessions.
As the Government continues to look at improving the regulation of NFPs, knowledge of an entity’s reporting, taxation and legislative obligations are absolutely necessary for its longevity.
As a result of this highly regulated industry, it is imperative that an entity has a sound foundation on which to build.
NFP Guide - Establishing an NFP entity