Wandering the Eerie Path to Incorporation - A Halloween Guide for Grassroots Movements & Community Groups

For many grassroots movements and community groups, the idea of incorporating can feel a bit… scary. Facing paperwork, additional costs, and the labyrinth of legal and compliance requirements can seem like stepping into a haunted house! As we continue gathering insights through our survey, we’re beginning to uncover some chilling statistics about the pressures groups feel to become legal entities.

Here’s a glimpse into the early trends that have been indicated and some advice that might help you avoid common pitfalls. If you’ve had your own experience with incorporation, we’d love to hear your story and encourage you to complete the survey.

Frightening Stats on Incorporation

Our very early results indicate that many groups feel pressured to incorporate:

Over 80% of respondents reported feeling that they had to incorporate just to move forward—whether they were ready or not.
60% of groups cited limited access to funding as the main reason they started exploring incorporation, feeling like financial opportunities were slipping through their fingers.
45% of participants felt that incorporating was essential to look legitimate in the eyes of funders, as if being unincorporated made them invisible to critical resources.

Bone-Chilling Advice for Other Groups

For those feeling the pull to incorporate, our survey participants have shared some valuable advice to help you on your journey:

Beware of the hidden costs: Some groups shared that while they gained formal structure, it came with hidden costs and new administrative burdens that drained time and energy.
Assess your needs: Before rushing into the depths of legal paperwork, consider the specific benefits each structure offers. Not every group needs to be a CIC, charity, or limited company.
Don’t rush: One participant admitted they felt pressured into “establishing as a mainstream constituted entity”. Their advice? “Take your time”. Think carefully before diving into incorporation. Sometimes, collaboration with an existing entity can be a much safer route.

Not yet ready to incorporate?

If you’d like to remain unregistered, The Social Change Nest can hold money for your group as a Fiscal Host. This means we can receive and hold funds on your behalf, and share our legal status with you, to help you access formal funding.

We can also sign grant agreements on your behalf and support you through the grant process.

Get guidance from those with experience: Seek support and advice from groups who have navigated this before. A little help can go a long way in avoiding common issues. One group member said, “whether you incorporate or not, you should create a strong policy ASAP! It will help massively in all sorts of issues.” The Social Change Agency can help you build policies if this is something you are struggling with.

Consider collaboration: Sometimes, teaming up with an existing registered entity allows groups to access resources without taking on the full incorporation beast.
Choose carefully: One respondent advised to make sure incorporating “fits the purpose and aims that you have all agreed you have capacity to fulfil. You don’t have to go for the thing that the loudest voice in the room wants if it’s not the best match for the work you want and are able to deliver. That person might move on – the entity won’t.”

A Call to Funders: Break the Chains of Incorporation

For unregistered groups to survive and thrive, they need funders who understand their unique challenges. By broadening funding eligibility or creating special streams for unregistered groups, funders can unleash the impact of grassroots movements that might otherwise remain trapped. Flexible funding could make all the difference, allowing these groups to keep their agility without the administrative shackles of registration.

Help Us Unmask the Truth

We know that the decision to incorporate can be daunting, but with the right resources and advice, we can help other groups to avoid the scariest traps. As we continue to gather insights, we aim to provide the guidance needed to make informed decisions and to encourage funders to think outside of the box.

These insights are only a first look into a small dataset. To build a true guide for others, we need more voices to complete our survey and share their experiences. Whether your story is a warning or a success, your input could be a lifeline for other groups navigating these murky waters. If you have an incorporation tale to share, don’t be afraid—add your voice to our survey and help us unmask the realities for grassroots organisations!

Alternatively, if you have any stories you’d like to tell us about in more depth, we’d be over the moon to set up a call and have a chat. Your insights are so valuable to us. Please email hello@thesocialchangenest.org and we’ll organise a time that works for you.