How To Set Up An Arts Organisation
Written by Christina Poulton
Approximate reading time: 5 minutes
If you’re working freelance you’re effectively a one person business; many people manage projects, raise funds or put on events as an individual. This is your guide to when and why you might want to set up an organisation, and how to get started.
When to set up an organisation
Apart from the fact you get to choose a great name for your organisation, introduce yourself as the founder, and dream of a swanky office with ping pong tables and shiny coffee machines, there are several situations where setting up an organisation may be in your best interests:
When there are higher levels of risk: if you’re employing people, taking on larger contracts, leasing a venue or dealing with larger amounts of funding, the risk and therefore your personal liability, increases. In many cases setting up an organisation means the risk and liability would sit with the organisation, rather than you as an individual, which would give you a level of protection if things went wrong.
When you want to access more funding: many funders require that their grants go to an organisation. Organisations provide a level of transparency and accountability that reassures funders their money will be spent correctly. If you set up as a not-for-profit organisation or charity, it can open up a whole load of new funding possibilities. In a commercial context it can help with securing finance or investors.
When you’re collaborating with others: an organisation can give you a structure for decision making. If you’re working with friends, or just colleagues, decision making can sometimes become fraught with power dynamics. An organisation structure means that there’s a way you operate and a way that decisions are made, for example through director or trustee meetings.
If you’ve decided you do need to set up an organisation then the next stage is to choose which type is right for you.
Types of organisations
There are numerous different types of organisation structures. None are better than others- it’s about finding the one which is right for how you want to work. These are the most common legal structures for arts organisations:
Limited company: Simple to set up. Works well if you want the people making the ultimate decisions about the company (the board of directors) to be the same as the people who run it day to day. You can specify that your company is not for profit when you register it, which can open up some funding opportunities. Ideal if you want flexibility and simple decision making.
Community Interest Company: Pretty straightforward to set up. A special type of limited company that has community benefit and not-for-profit status included as part of the legal set up. You can be a decision maker (director) for the company and also be paid by and working for the company. Many CICs also have voluntary directors, in a similar way to a charity board. A few more funders will fund CICs because there’s a higher level of accountability and community benefit. Ideal if you want to have the status of an organisation that benefits the public, but want to retain decision making power as well as running the company.
Charity: There are two main types- Charitable Company and Charitable Incorporated Organisation (CIO). Both are well established forms of charities and will be run by a voluntary board of trustees. Those running the organisation on a day to day basis report to the trustees and this transparency is why many funders will only fund organisations that are charities. Ideal if your work is charitable in nature and you want to set up something bigger than you, with long term goals.
There’s more detail on the different types of structure and how to decide between them in this online training here
How to get started
Whichever structure you choose, you need to get your people together first. With a limited company you could register with only one director but for a CIC and charity structure it is usually expected, and often required, that you have several directors or trustees lined up.
Once you have the people who will be the legal decision makers for the organisation- the directors or trustees- you can then create your governing document (which says how the organisation will be run) and register with Companies House or the Charity Commission. Template governing documents are provided and I would recommend using these and just personalising it for your organisation where needed e.g. adding in the organisation name etc.
Information on setting up a Limited Company here
Information on setting up a Community Interest Company here
Information on setting up a charity here
Setting your organisation up for success
Below are a few ideas for things that lay the foundations for a successful organisation so you can get out there and make it happen.
Establish partnerships
Working in partnership with other arts organisations, local council, charity sector or community groups can help establish your organisation and your work quickly. Partnerships can raise your profile, help secure funding, increase your impact and open doors that would be difficult alone. Seek out organisations with similar goals or who work with communities you want to engage and start a conversation.
Manage the money
If you’re used to working on a project basis you’ll need to start thinking about your overheads- the ongoing costs of running an organisation: things like insurance, accountancy, web hosting, and staff time not related to project delivery. Work out the real costs of delivering any activity before you commit to it- if it doesn’t pay a contribution towards your overheads, cover your prep time, or requires you doing significant fundraising just to deliver on someone else’s terms, you need a very good reason to say yes. Otherwise walk away and focus on activity that helps make your organisation sustainable.
Go for quality over quantity
We all know arts organisations with a culture of overwork and stress. It isn’t a requirement! Focus on doing a couple of things well. Focus on your values and looking after people. Otherwise you end up with a stress generating machine that struggles under its own weight and you can't remember why you set it up in the first place. Before you launch in, test things out on a small scale, find what works and only make it bigger if there's a compelling reason to do that. Bigger doesn't automatically equal better.
Whatever structure you go for and whatever adventures you take your organisation on, enjoy the ride.