The Characteristics of 'Equity' in NPOs

Introduction

Feedback suggests that the majority of Non-profit Organisations do not issue equity instruments (eg shares) and therefore do not have holders of equity claims.

In the absence of owners’ equity, the net assets (residual interest) are held in trust for those that benefit from the NPO’s mission. However, in the rare cases where an NPO does have equity instruments, it is less clear what the holders of equity claims are actually entitled to, and whether they have any rights to the net assets of the NPO.

Purpose of survey

Please take this survey only if you are aware of a specific NPO or NPOs that do have some type of equity. The purpose of this survey is to gather factual information about transactions that NPOs consider to be equity claims.

Below are a series of questions that are intended to help identify the characteristics of equity claims and their potential use in the NPO sector.

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* 1. Name

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* 2. Email address

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* 3. Country

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* 4. What is the purpose of the equity? Tick any that apply

a membership condition?

to provide funds for the NPO?

a legal requirement?

to show community support?

another purpose not above?

If yes to any, describe further below

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* 5. What legal forms can the equity take? Tick any that apply

Share capital

Share options

Convertible debt

A guarantee given to NPO

Something else

If yes to any, describe further below

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* 6. Other than convertible debt, are there any types of debt issued that can be considered equity because of the rights provided? If yes, please provide details below

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* 7. Can the equity be issued at any of the following points?

	Yes	No
at the start of the NPO's life (seed funding)?	at the start of the NPO's life (seed funding)? Yes	at the start of the NPO's life (seed funding)? No
at any point?	at any point? Yes	at any point? No
at specific points, e.g. merger of 2 NPOs?	at specific points, e.g. merger of 2 NPOs? Yes	at specific points, e.g. merger of 2 NPOs? No

Another point? (If yes, please describe below)

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* 8. Limitations on the provision of equity

	Yes	No	Not sure
Do the NPO's governing documents prohibit the issue of equity?	Do the NPO's governing documents prohibit the issue of equity? Yes	Do the NPO's governing documents prohibit the issue of equity? No	Do the NPO's governing documents prohibit the issue of equity? Not sure
Do the NPO's governing documents limit who can hold equity?	Do the NPO's governing documents limit who can hold equity? Yes	Do the NPO's governing documents limit who can hold equity? No	Do the NPO's governing documents limit who can hold equity? Not sure
Does a regulatory body limit who can hold equity?	Does a regulatory body limit who can hold equity? Yes	Does a regulatory body limit who can hold equity? No	Does a regulatory body limit who can hold equity? Not sure

If yes to any of the above, describe what creates the limitation and to whom it applies

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* 9. Trading, swapping & redeeming equity.

	Yes	No	Not sure
Can the equity be traded or swapped?	Can the equity be traded or swapped? Yes	Can the equity be traded or swapped? No	Can the equity be traded or swapped? Not sure
Can the equity be redeemed, limited to the amount originally provided?	Can the equity be redeemed, limited to the amount originally provided? Yes	Can the equity be redeemed, limited to the amount originally provided? No	Can the equity be redeemed, limited to the amount originally provided? Not sure
Can the equity be redeemed at an amount other than the original contribution?	Can the equity be redeemed at an amount other than the original contribution? Yes	Can the equity be redeemed at an amount other than the original contribution? No	Can the equity be redeemed at an amount other than the original contribution? Not sure

If yes to any of the above, explain under what circumstances equity can be traded, swapped or redeemed:

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* 10. What do the equity claims provide?

	Yes	No
An entitlement to distributions?	An entitlement to distributions? Yes	An entitlement to distributions? No
A share of net assets if the NPO ceases and its net assets are not transferred to another NPO?	A share of net assets if the NPO ceases and its net assets are not transferred to another NPO? Yes	A share of net assets if the NPO ceases and its net assets are not transferred to another NPO? No
Return of initial contribution if NPO ceases to function?	Return of initial contribution if NPO ceases to function? Yes	Return of initial contribution if NPO ceases to function? No
Another entitlement not listed?	Another entitlement not listed? Yes	Another entitlement not listed? No

If yes to any of the above describe the entitlements provided

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* 11. Is the amount of equity material to NPO net assets?

Yes

Not sure

Yes

Not sure

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* 12. Do you agree the following are NOT equity claims ?

	I agree	I disagree	Not sure
Funds held in trusts	Funds held in trusts I agree	Funds held in trusts I disagree	Funds held in trusts Not sure
Endowment funds	Endowment funds I agree	Endowment funds I disagree	Endowment funds Not sure
Custodial assets to be returned upon the cessation of the NPO	Custodial assets to be returned upon the cessation of the NPO I agree	Custodial assets to be returned upon the cessation of the NPO I disagree	Custodial assets to be returned upon the cessation of the NPO Not sure
Funds with restrictions (as defined in INPAG Section 2)	Funds with restrictions (as defined in INPAG Section 2) I agree	Funds with restrictions (as defined in INPAG Section 2) I disagree	Funds with restrictions (as defined in INPAG Section 2) Not sure
Externally provided guarantees over financing or other activities?	Externally provided guarantees over financing or other activities? I agree	Externally provided guarantees over financing or other activities? I disagree	Externally provided guarantees over financing or other activities? Not sure

The Characteristics of 'Equity' in NPOs

Introduction

Question Title

* 1. Name

Question Title

* 2. Email address

Question Title

* 3. Country

Question Title

* 4. What is the purpose of the equity? Tick any that apply

Question Title

* 5. What legal forms can the equity take? Tick any that apply

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* 6. Other than convertible debt, are there any types of debt issued that can be considered equity because of the rights provided? If yes, please provide details below

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* 7. Can the equity be issued at any of the following points?

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* 8. Limitations on the provision of equity

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* 9. Trading, swapping & redeeming equity.

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* 10. What do the equity claims provide?

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* 11. Is the amount of equity material to NPO net assets?

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* 12. Do you agree the following are NOT equity claims ?

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* 13. Are there any other comments or circumstances in your jurisdiction, relating to equity, that you would like to highlight?