שלישי, 25 דצמבר 2018 נכתב ע"י 

מלכוד 22 - קיימות במגזר השלישי?

לאחרונה אנו מבחינים בניסיונות של מוסדות ללא כוונת רווח להפעיל מיזמים עסקיים המניבים רווחים, וזאת על מנת ליצור תשתית יציבה לאיתנות כלכלית ולהמשך פעילותם   הציבורית. ניסיונות אלו נתקלים באתגרים משמעותיים מצד רשם העמותות במשרד המשפטים. מחד, מאפשר הרשם פעילות עסקית של העמותות, ומאידך, מציב סייגים ותנאים רבים המעמידים את המלכ"ר המעוניין להתקיים מהכנסות אלו בפני מלכוד 22.   עו"ד ז'נט לוי-פחימה, שותפה במשרד עו"ד הרצוג-פוקס-נאמן ג'נט לוי פחימה עובדת בתחום החברות ומתמחה במיזמים משותפים, קרנות השקעה, מיזוגים ורכישות וסחר בינלאומי. תחומי התמחותה כוללים: ייצוג תאגידים זרים; ייצוג קרנות הון סיכון; ייצוג חברות היי-טק בשלבי התפתחותן הראשוניים; ומתן ייעוץ ללקוחות תאגידיים על בסיס שוטף

Sustainability – that's a big buzz word.  It is really important. 

According to Global Footprints, the concept of sustainable development took off at the 1992 United Nations Conference on Environment and Development (UNCED  - also known as the Rio de Janeiro Earth Summit). Inc. advocates three pillars of sustainability: environmental, economic and social. So while environmentalists are looking for renewable and sustainable sources of energy, and social businesses are presenting sound business models while positively impacting social issues, donors are looking at charities and asking for greater sustainability to wean off a 100% dependence on philanthropy.

A pioneer is Pierre Omidyar.  The Omidyar Network describes itself as "a philanthropic investment firm…  support[ing] market-based approaches with the potential for large-scale, catalytic impact…. [W]e make investments in for-profit companies as well as grants to nonprofit organizations."

Recognizing the importance of sustainability and having sources of income that do not rely on fundraising, non-profit organizations in Israel are permitted to have activities that are for-profit.

Guidelines of the Registrar of Non-Profit Organizations of the Ministry of Justice entitled "Business Activities by Non-Profit Organizations" provides guidance on just how this can work, but it is loaded with conditions and exceptions leading to a Catch 22.

Let's say a non-profit organization develops a great idea that is fully in line with its social and charitable purposes, and yet could also be a profitable activity.  It can conduct that activity and pay tax on the income generated within the framework of the non-profit organization itself, or it can establish a subsidiary to conduct the activity.  Obviously the subsidiary will pay company tax on its income.  That makes sense.

Going a step further, the non-profit organization does not even have to own the entire for-profit company.  As long as it maintains control, being more than 51%, either alone or together with other non-profit organizations, that is fine.

In special circumstances, the Registrar of Non-Profit organizations could approve a request of a non-profit to hold less than 51%; but there is no guidance on what circumstances would make this acceptable.

We do know one thing – it is hard to find the prototype investor that is willing to invest in a for-profit business that must be controlled by a non-profit.  And here is where the model starts to crack.  For the activity to really grow, it may need major financial backing.  Investors may demand a controlling stake in the new venture.  That would not be allowed.

Another limitation is success itself.  What if the idea is great and can really make a lot of money?  At that point, the non-profit is not allowed to conduct the activity at all, either directly or through another company, as the main activities of the non-profit organization must remain  non-profit.

Therefore a non-profit that has found a way to be self-supporting is limited by how successful it really can be. 

Ironically, a non-profit organization that has an endowment invests that endowment in market products that most often have no social benefit to the non-profit organization or to anyone else.  By analogy, a non-profit organization should be able to have a minority investment in a company that conducts socially beneficial activities, achieving a double bottom line (impact investment speak for a business that has financial returns along with serving a social purpose).

By extension, that minority investment should be permitted with any size stake in a social business.  Safeguards can be included for protecting the non-profit against conflicts of interest. Periodic reports to the Registrar of Non-Profit Organizations will enable constant monitoring to ensure that holdings of the non-profit organizations in for-profit companies are in line with the purposes of the non-profits. 

Until this happens, the easiest way to comply with the guidelines is to work outside of them which is a shame.  A non-profit organization will be better off selling its for-profit activities before it gets too big.  That undercuts the long term source of revenue that the for-profit activities could offer which in turn decreases the chance for, of course, sustainability of a non-profit organizations.

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