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''source: BC Registry Services, "Preparing for B.C.'s New Societies Act: A Guide to the Transition Process"'' | ''source: BC Registry Services, "Preparing for B.C.'s New Societies Act: A Guide to the Transition Process"'' | ||
===How do we decide whether to | ===How do we decide whether to become a member-funded society?=== | ||
'''Member-Funded Society – A Challenging Choice''' (by Paul Wood) | '''Member-Funded Society – A Challenging Choice''' (by Paul Wood) | ||
As Chair of the Governance Committee of a non-profit serving a reasonably sophisticated community, working our way through | As Chair of the Governance Committee of a non-profit serving a reasonably sophisticated community, working our way through a Constitution and Bylaw review, thoughts turned to Part 12, Division 1 of the ''Societies Act'', which provides for member-funded societies. | ||
A member-funded society is a non-profit that is funded primarily by its members to carry on activities for the benefit of its members. Common examples might include some sports clubs, golf courses and professional associations. | |||
This seemed a perfect fit. Although a non-profit cannot be a member-funded society if it receives public donations or government funding beyond specific thresholds, there was a high degree of confidence that this fit our circumstances, until we spoke with a lawyer. Working through the language of the Act and the due diligence necessary to come to a confident conclusion, doubts crept in. Shifting the focus from the due diligence of an historic review of financials, decisions and minutes over at least the past two years, to a view looking forward, and the potential constraints selecting member-funded status might impose on future directions and decision-making, doubts were no longer merely creeping, they were striding confidently. | This seemed a perfect fit. Although a non-profit cannot be a member-funded society if it receives public donations or government funding beyond specific thresholds, there was a high degree of confidence that this fit our circumstances, until we spoke with a lawyer. Working through the language of the Act and the due diligence necessary to come to a confident conclusion, doubts crept in. Shifting the focus from the due diligence of an historic review of financials, decisions and minutes over at least the past two years, to a view looking forward, and the potential constraints selecting member-funded status might impose on future directions and decision-making, doubts were no longer merely creeping, they were striding confidently. | ||
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**Is this likely to ever be the case? | **Is this likely to ever be the case? | ||
In the end, in our circumstances, the decision was one of balancing the “real” benefits of member-funded status against the need for proper due diligence in ensuring our non-profit met the detailed tests set up in the | In the end, in our circumstances, the decision was one of balancing the “real” benefits of member-funded status against the need for proper due diligence in ensuring our non-profit met the detailed tests set up in the act, and the constraints that it would impose on the non-profit in terms of receiving public donations or government funding in the future. | ||
====Cautions==== | ====Cautions==== | ||
Becoming a member-funded society is a significant choice that needs to be authorized by a special resolution of the members | Becoming a member-funded society is a significant choice that needs to be authorized by a special resolution of the members. If you have any doubt about whether your non-profit can or should become a member-funded society, you should seek legal advice before transitioning. | ||
Member-funded designation is a choice that must be made | Member-funded designation is a choice that must be made at incorporation, otherwise a court order is needed. It is one of the most challenging areas of the ''Societies Act''. | ||
{{Societies Act FAQs NavBox}} | {{Societies Act FAQs NavBox}} |
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