Another way for groups to work successfully in their communities without incorporating themselves is by going under the wing of an umbrella group. An umbrella group is usually a larger organisation that is an incorporated body and can provide resources and backing to smaller groups that work in similar areas and/or share similar goals.
Working with an umbrella organisation allows a smaller group to get on with projects without having to take on the costs and responsibilities of being incorporated. It can help with obtaining funding and the umbrella group may also receive and pass on any money to a group within its structure, possibly charging a handling or administration fee for its services.
By using an umbrella organisation:
- you can make use of the skills and resources of the umbrella group
- you have no long-term commitment
- you may save on administration costs
- as a new group you can secure a small amount of funding
- you are working in partnership in the community.
- your eligibility for grants may be limited
- employment arrangements and responsibilities can be confusing when the group under the umbrella wants to employ someone
- the umbrella group requires full disclosure of financial information
- individual liability may not be limited, so individuals in your group may not be protected from being sued
- problems can arise with how assets are dealt with
|Tip: Make sure the umbrella group is a legal entity and get a written agreement to ensure the relationship is clear. Both parties should seek legal advice before signing any agreement between them. For more information visit: http://communitylaw.org.nz/legal-information/browse-all-topics/