How we operate & how that effects you:
What type of business is Many Feathers?
Many Feathers is a non-profit organization, incorporated as a co-operative without share capital. This means we run democratically as a co-op, and are not focused on financial gain as the ultimate goal, which essentially allows us to run as a social enterprise. It also means that we are directly involved in selling products/services for the blended purpose of generating reciprocal income for our organization while creating social and environmental benefits. The concept of a social enterprise allows us a non-profit to meet its mission and contribute to healthy communities. There is a clear social mission developed through reinvesting profits back into the organization.
What does it mean to be a co-operative?
Non-profit organizations and co-ops are member controlled and have missions and goals outside of maximizing financial gain. The primary reason for a co-op to exist is to provide a service that meets the needs of its members, while non-profits have more broadly defined objectives that serve the greater community (not only the members).
What does it mean to be a non-profit?
Non-profit organizations incorporate as a “corporation without share capital” under the Ontario Corporations Act – this means they do not have the option to purchase shares, and they do not distribute profits as dividends; all profit is reinvested into the organization (for new and expanding projects or programs).
Non-profits, regardless of the corporate structure (co-op or corporation), do not have to operate at-cost. The term “not for profit” indicates that the organization is not operating with the primary purpose of generating money.
Financial Impact of non-profits and cooperatives.
Non-profits are regulated by the Companies and Property Security Branch of the Ministry of Government Services, and tax status falls under the Canada Income Tax Act, as overseen by the Canada Revenue Agency (CRA). Non-profits are exempt from tax on earned income, however co-ops are subject to income tax (although some dividends are deductible from the co-ops taxable income). It is possible for a co-op to operate as a non-profit; so long as the Articles of Incorporation clearly state that it will not distribute surplus profits to its members. This criterion for tax exemption is outlined by the CRA (which is what we are!).
Why would a co-op operate as a non-profit?
The biggest advantage is tax exemption; other reasons include access to government and private funding only available to non-profits and charities, and for us, a unique social structure at the core of our organization.
More recently, some co-ops have formed with specific community and social goals (such as Many Feathers) that are broader than simply fulfilling the needs of its members, and therefore incorporate as a non-profit to emphasize their dedication to wider community goals. The greatest disadvantage of a non-profit co-op is that they are unable to distribute financial surplus to the members, which can be a disadvantage when attracting members (although this does not preclude members from receiving other benefits).
Benefit of our business structure
Therefore, the benefit to our members is a social one. A non-profit co-op can provide services that meet the members’ needs through services and programs; essentially, their return on investment is a social one. In the case of Many Feathers, members have the opportunity to invest in an organization working towards the betterment of the environment, with the opportunity to be involved in its governance. They can dedicate time, money, and/or emotional energy into the way the organization interacts with the community in a way that benefits all involved.
Both co-ops and non-profits are member-controlled. Each member has one vote across both platforms. Both types of organizations have a Board of Directors that is elected by the membership, and must be members of the organization.
Why are we a co-op?
And thus, Many Feathers has chosen to operate as a non-profit co-op due to the democratic governance of both structures combined. This provides the best structure for a social enterprise such as ourselves, allowing us to be tax exempt, as well to involve our members to the highest degree and therefore have the ultimate output for the community at large. Membership is a source of revenue, a volunteer-retainment strategy, and a platform for members to be involved in the organization’s governance and financial health. It helps us continue to be as transparent as possible, as intertwined with our supporters, and as active as we can be, while working alongside our legal obligations.
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