4 Functions to Expect from Not for Profit Advisories in Nigeria
Nigeria’s nonprofit sector has grown considerably over the years. However, this growth has not altered its structure in any way, as nonprofits are run mainly on goodwill. This peculiar attribute makes Nigerian nonprofits susceptible to pitfalls if not appropriately guided. This is why not-for-profit advisories are a non-negotiable necessity in Nigeria.
Here are four functions Nigerian not-for-profit advisories perform:
- Institution: A nonprofit can be instituted as either a Company Limited by Guarantee, an Incorporated Trustee, an Unincorporated Association or Charitable Trust/Foundation. Each of these options has several benefits depending on the purpose you want to achieve. A not-for-profit advisory can help you decide what type of nonprofit will serve the purpose.
- Funding: Generally, not for profits are not set up to make profit. However, to secure funds to promote their cause, running a business sometimes becomes a necessity. In such a situation, a not-for-profit advisory will guide a not-for-profit on how to run a business without erring on the side of the Law.
- Taxation: Under section 23 (1)(c) of the Companies Income Tax Act, not for profits are exempt from taxation. However, in instances where the nonprofit is running a business, the income gotten from such a venture is subject to taxation. A not-for-profit advisory will help guide nonprofits on what to and what not to pay tax on.
- Constitutional documents: Depending on the model a nonprofit chooses to adopt, there are constitutional documents that need to be available at all times. For instance, a nonprofit instituted as a company Limited by Guarantee needs to have a Memorandum of Understanding and an Article of Association. These documents are required for the smooth entrenchment of corporate governance. A not-for-profit advisory’s function in this situation will guide the nonprofit on the content of these constitutional documents to ensure that terms are clearly stated.