Why We're a Not-for-profit business (but not a non-profit organization)
In our update in January of this year, we mentioned having some “top-secret ideas in the works that we [were] not quite ready to talk about yet.” One of those ideas was to ditch our LLC and register as a non-profit organization.
Why we want(ed) to become a non-profit
From the very beginning, our driving purpose with Inclusive Future Magazine has been to contribute to creating a better future for everyone. Our financial goal was–and still is–to be able to pay writers and artists professional rates as per SFWA guidelines; compensate guest editors of future issues for their work; and to pay for design, printing, shipping, and operating costs. We’re not trying to make a profit, and we don’t think we can reasonably expect to be able to pay ourselves. We three founding editors volunteer our time and energy because we are privileged enough to be able to do so and are passionate about bringing our audience a collective vision for the safe, socially just, and environmentally sustainable future we want to work toward.
So when we first set up Inclusive Future Magazine as an LLC a few years ago, our attorney looked at the way we intended to run the project and asked us, “Why aren’t you registering as a non-profit?”
A good question, and one we’d considered ourselves. But at the time, we were intent on running a Kickstarter campaign, and it was our understanding that Kickstarter wouldn’t let us do that as a non-profit. Thus, we registered Inclusive Future Magazine as an LLC with plans to revisit the question in the future.
Fast forward to 2023. Running a Kickstarter as a non-profit isn’t an issue, and we asked ourselves again: Is now the time to become a non-profit? The primary advantages we considered were: 1) having a legal status that reflects how we actually run the project; 2) tax exemption; and 3) the possibility of applying for grants reserved for literary non-profits.
What we learned
But as we researched, we were surprised to learn that it costs hundreds of dollars more to become a non-profit than it does to register as an LLC and involves quite a lot more paperwork. And while the annual fee at the state level to retain non-profit status is less than the annual fee for an LLC, being a non-profit requires more intensive recordkeeping and annual reporting than we have the capacity for at this time.
When it came down to it, we agreed that if we could magic up an extra $500, we would rather spend it on buying more work and paying our contributors professional rates than on paying state and federal fees. And because our time and energy for this project is not unlimited, we want to spend what time and energy we do have working with writers on their pieces and publishing the anthology.
While we will not be registering as a non-profit for the time being, we do think of ourselves as a not-for-profit business, because social benefit – not profit – is our core purpose.
We owe a shout-out to Episode 72 of From What If to What Next, titled “What if we shifted to a not-for-profit economy?” While we’d heard of not-for-profit businesses before, we didn’t really understand what they were (and that we are one) until we listened to this incredibly inspiring episode, which lays out a vision for what a not-for-profit economy could look like and mentions some current organizations that are doing work toward that future. To those who have access, we highly recommend giving the episode a listen; it’s available on Spotify, Libsyn, and Apple Podcasts for free as well as through Audible the podcast’s Patreon.