Creating a nonprofit organization for an academic journal

Rosenibbs

I have run an academic journal for about 15 years, I am editor in Chief, the journal is published by a large journal publisher.  They wish to change the way hey pay stipends and royalties, by sending me a lump sum of up to £50K each year for me to distribute to the colleagues who work on the Journal as editors, copy editors and so forth (previously they held the funds and I advised on their distribution).  I obviously don't want this in my personal bank account so need to set up some legal entity to hold the funds and distribute them.  There are many websites offering to 'start a company' in five minutes for a small charge.  Is this the way to go, or are there other, better ways to set up a non-profit organisation.  All advice or pointers would be much appreciated.

Rosenibbs

I want to set up a legal entity of some sort - not for profit - to receive, hold and allocate the funds for a well established academic journal - the publisher will no longer hold and allocate those funds on our behalf.  The sums involved are small - £30K-£50K per annum.  Any advice on the simplest way to do this - there seem to be lots of websites offering to set up a company in five minutes, but I have no idea if that is the best way or who to trust to do this!

MovingForwards

Rosenibbs said:

I have run an academic journal for about 15 years, I am editor in Chief, the journal is published by a large journal publisher.  They wish to change the way hey pay stipends and royalties, by sending me a lump sum of up to £50K each year for me to distribute to the colleagues who work on the Journal as editors, copy editors and so forth (previously they held the funds and I advised on their distribution).  I obviously don't want this in my personal bank account so need to set up some legal entity to hold the funds and distribute them.  There are many websites offering to 'start a company' in five minutes for a small charge.  Is this the way to go, or are there other, better ways to set up a non-profit organisation.  All advice or pointers would be much appreciated.

Your question is better suited to one of these areas of the forum:
https://forums.moneysavingexpert.com/categories/small-biz-charities-moneysaving

https://forums.moneysavingexpert.com/categories/charities

Rosenibbs

I have run an academic journal for about 15 years, I am editor in Chief, the journal is published by a large journal publisher.  They wish to change the way hey pay stipends and royalties, by sending me a lump sum of up to £50K each year for me to distribute to the colleagues who work on the Journal as editors, copy editors and so forth (previously they held the funds and I advised on their distribution).  I obviously don't want this in my personal bank account so need to set up some legal entity to hold the funds and distribute them.  There are many websites offering to 'start a company' in five minutes for a small charge.  Is this the way to go, or are there other, better ways to set up a non-profit organisation.  All advice or pointers would be much appreciated.

soolin

I’ve asked the forum team to merge your posts. 

Savvy_Sue

Are you paid for your work? You mention stipends as well as royalties, I'm presuming it doesn't amount to actual employment?

I'm mulling this over ... a company might well be a bit OTT, but you may want something with a bit of structure, in order to future-proof it. 

would it be similar to the walking group I've been involved in, where we have a small committee who take responsibility for the activities and that changes from year to year? We have a 'Clubs and Societies' account, they may not still call it that, but in order to open it or make any changes to signatories we have to sign a declaration that the changes had been agreed at a meeting of the committee on X date. And we have two signatories, and two person authentication for internet banking. 

Is the publisher still going to receive the subs for this?

Are there other journals facing the same problem, have you talked to any of their Chief Editors? 

Rosenibbs

Thanks, Savvy_Sue, did you just set up an account with a UK bank or did you have to set up something with articles of association and so forth first.

Good idea to talk to other editors, I will do that, thanks!

Savvy_Sue

Rosenibbs said:

Thanks, Savvy_Sue, did you just set up an account with a UK bank or did you have to set up something with articles of association and so forth first.

Good idea to talk to other editors, I will do that, thanks!

When you complete the application form for a bank account, you'll be stating that "At a meeting of the Academic Journal committee on [date], it was resolved to appoint High Street Bank as the AJ's bankers." Or something similar. So the way I've always done it, you have to have the structure in place, and you do need a 'minute' setting out who you want to bank with. And you'd normally appoint a chair, secretary and treasurer, and I've always had a 'normal' committee member with those as one of four signatories, any two to sign. 

That helps future-proof it - when I became treasurer of the walking group, I was meant to shadow for a year, but the person I was shadowing fell ill and couldn't continue, so I was co-opted and elevated pdq! That's when I discovered that the only other signatory was no longer on the committee, and was caring for a dying spouse so was rarely seen. But that was OK, there was a cheque book with several cheques pre-signed ... except that the treasurer was now unable to sign ... 

Would it be reasonable to describe what you want as a Not for Profit setup? People are being paid, but it sounds as if the profit from subs is being redistributed to those who've worked on various issues, and no-one is actually formally employed. In your capacity as Chief Editor, would you say there's a voluntary element to it? I think that would widen where you could get advice from - google 'volunteer' plus your city / county and hunt around the website for your local voluntary services council (which may have a completely different name to that!)

Another random thought which has just popped into my head is whether your university department would be able to handle this on your behalf? That's assuming you are still 'attached' in some way - even if retired it might be worth asking. Would being associated with this Journal give the dept some 'cachet'? And again, it may help with the future-proofing. The money coming in would have to be 'restricted funds', ie only to be spent at your direction. (Many many years ago, I used to do the data entry for an academic journal which we published in house, and it certainly brought fame to our dept, but we handled everything ourselves!)

HashcryptTechnologies

Rosenibbs said:

I want to set up a legal entity of some sort - not for profit - to receive, hold and allocate the funds for a well established academic journal - the publisher will no longer hold and allocate those funds on our behalf.  The sums involved are small - £30K-£50K per annum.  Any advice on the simplest way to do this - there seem to be lots of websites offering to set up a company in five minutes, but I have no idea if that is the best way or who to trust to do this!

Yes, In order to understand today's generation, you should use the websites that come with useful resources.

MalMonroe

Hi, if it's an academic journal, is it independent? Or is it part of a higher education organisation? I worked for a university which had different academic journals operating out of several departments. The journals were all produced under the umbrella of the educational organisation. 

Of it's part of a university then an account could be opened within that organisation. If it isn't part of a university then I'd have to ask the journal publisher/s to set up the account so I could operate it on their behalf. They seem to have just made this decision without any reference to you, or input from you. That would really irritate me if I had been Editor in Chief for the last 15 years.

If they want to change the format I think they should do it. And then you should be left to run the account. I'd not want it in my name, nor anything to do with me. That's just a recipe for disaster, especially if any monies go missing at any time. Then you would be responsible. 

I'd have nothing to do with setting up the account. Let the publisher do it. That is my best advice. 

And if they haven't even bothered to discuss it with you in advance and get your agreement before asking you to do it, that's really not on.

Rosenibbs

Thanks to MalMonroe for your very helpful post.  The problem is that Universities take a large 'top slice' for holding funds for a Journal such as ours - we have explored this and the result makes that option unviable.  The problem with us setting up some kind of Company in the UK, as others have suggested,  is that our various Editors live in many different countries which makes it very difficult to operate (unless, it seems, if one is a multimillionare!).  Your comments and suggestions are spot on, and I totally agree!  I have just acted on your advice, and asked the publisher to set this account up for us, with us operating the account, but with them taking the responsibility as you suggest.  Lets see if that works!