Whether you’re creating an entity from scratch, or “spinning out” of a fiscal sponsor or incubator, it’s vital that you set things up correctly from the start. You’ll create a lot more work for yourself in the long run if you launch your organization without appropriate governance or infrastructure.
Once you’ve lined up funding and a founding team, here are 11 things to add to your to-do list.
1. Register the legal entity |
Determine a suitable entity structure. In the UK, for example, you might register as a company limited by guarantee (CLG), a registered charity, a community interest company (CIO), or a company limited by shares. In the US, if you’re planning on running political campaigns, or policy advocacy, consider registering as a 501(c)(4) rather than a standard charitable 501(c)(3). Entity structures vary by jurisdiction, so consider seeking external counsel to get this set up correctly from the start.
Set up a bank account. Traditional high street banks often have weeks-long processing times for setting up an account. Consider registering an account with a virtual bank like Wise, which is suitable for entities in almost any location. (If you’re considering a visa sponsorship licence in the UK — more on that later — you’ll need an FSA accredited bank account. In that case, Cashplus may be a quick option.)
Select and install essential insurance plans. Employers liability and public/general liability are worth setting up from the get-go. You might also consider key person insurance (insuring against the loss of key personnel) and events insurance (if you’re intending to host events). |
2. Set up governance & compliance |
Connect with board members, trustees, and advisors. Draft a proposal for prospective members explaining their expected responsibilities, your entity’s expected activities, your funding model, and your route to impact. Build a board of experienced individuals with a mixed skillset, and avoid the temptation to populate the board with friends and people with a similar background to yourself. Consider making use of EA Good Governance Project.
Write essential governance policies. Make sure your new organization has a suite of policies that comply with regulations and norms. Essential policies will cover data protection and privacy, website terms of use, conflicts of interest, financial controls, investments and reserves, grievance, harassment, and whistleblowing. We’ve got a bank of concise and compliant policies to prevent founders coming up with these from scratch.
Set up routine meetings. Make sure the board meets frequently enough to stay “in the loop” on key activities and strategic priorities. Consider appointing a professional secretary — it’s a low-cost service that can ensure important things, like conflicts and resolutions, are recorded appropriately. We’ve seen secretarial duties get deprioritized, but they can be critical to ensuring a healthy governance ecosystem. |
3. Set up financial infrastructure |
Set up financial controls. Write essential finance procedures, including payment approval, spending, reporting, budgeting, and reserves. Also, consider engaging an accountant and a bookkeeper. While automation can save time, it’s still important to have someone overseeing the bookkeeping — and outsourcing this can keep you focused on your comparative advantage.
Set up an accounting system. Choose a platform based on your needs and budget — Xero and QuickBooks work well in our experience. Set up an appropriate chart of accounts, automated bank feeds, recurring transactions, payment rules, and custom budget reports. Automated dashboards can prove essential for keeping an eye on your key metrics — like months of remaining runway and your funding gap.
Register with your local tax authority. In the UK, you’ll want to register with HMRC for PAYE if you intend to compensate staff via payroll. You’re expected to register for PAYE before you employ your first employee, and the processing time is typically 10 working days. (In the UK, it’s also a legal requirement to set up a pension scheme within 3 months of engaging your first employee. In the US, you aren’t required to set up a 401(k) plan, but you may consider doing so as an employee benefit.) |
4. Set up an expense management system (EMS) |
Determine your requirements. Are you looking for expense reimbursements, invoice payments, and/or company cards?
Scope options. Request demos and walkthroughs to get a picture of how the systems will work, both from the employee and admin sides. We’ve helped a number of organziations scope these systems; Brex, Expensify, and Bill Spend & Expense (formerly Divvy) tend to be common platforms in the effective altruism community.
Set up the system. Once you’ve selected your provider, configure the system as you’d like and include process overviews and walkthroughs in your onboarding materials. |
5. Set up hiring infrastructure |
Ensure continuity of service. If you’re spinning out from a fiscal sponsor, determine the process for moving staff to your new entity. (In the UK, you might make use of a TUPE transfer.) Transfer vendor agreements, contractor agreements, and grant agreements as necessary.
Create employment contracts. Set out the main terms and conditions under which staff will be employed, including the duration/time/place of work, remuneration, benefits, holiday entitlement, termination, discipline and grievance, disclosures, trade union membership, data protection, confidentiality, and other policies. Consider legal counsel to review these for compliance.
Set up a visa sponsorship licence. A visa sponsorship licence allows your new entity to employ foreign nationals. The expedited process takes 10 working days, and you’ll need a bank statement, employers liability insurance, PAYE registration, and a copy of an office lease. In the UK, visas are managed through the Sponsor Management System (SMS); the US doesn’t have an equivalent, and merely requires an IRS tax number and jobs that meet the eligibility requirements. |
6. Set up a human resources information system (HRIS) |
Determine your requirements. Besides storing employee data, you might look for org charts, leave/expense requests, automations, and/or integrations with other software.
Scope options. Request demos and walkthroughs to get a picture of how the systems will work, both from the employee and admin sides. Rippling & Deel HR represent strong options at opposite ends of the feature/complexity spectrum: Rippling describes itself as “the Salesforce of HR”, while Deel offers a simple, lightweight, free system with the basics.
Set up the system. Once you’ve selected your provider, configure the system as you’d like and include process overviews and walkthroughs in your onboarding materials. |
7. Determine salaries & benefits |
Create a salary policy. Use base bands to set salaries and promotions in a way that is scalable and ensures fairness. It’s important to set thresholds for board approval (e.g. £100,000) and modify these bands by: exchange rates, cost of living (e.g. take an average of Numbeo and Expatistan), inflation, country boost (e.g. US is typically boosted above the UK, even after cost of living is taken into account, due to higher market rates for skilled labour), region boost (e.g. to incentivize staff to work near your HQ), experience, and years worked at the organization. (This last one may also help with gender pay inequality, as men are statistically more likely to request raises.)
Determine which benefits you’ll provide. Pension, private healthcare, and income protection (disability insurance) are common, but you might also consider fertility insurance, life insurance, and/or a drive/cycle to work scheme.
Decide which providers you’ll use. Get a sense of suitable providers and their offerings. Pay attention to the differences between their plans in terms of the premium, deductible, coinsurance, network, coverage, exclusions, and customer reviews. (We’ve helped organizations save a lot of time here by recommending providers, plans, and brokers — as some plans require working with a broker). Activate your schemes, and make sure to register with your local pension regulator where required. |
8. Create a company handbook |
Determine the required policies. Write them up and get them reviewed and approved by your board. Consider categories like culture, absence, pay and allowances, devices and media, insurance, and conduct.
Find a suitable platform. Google Docs is great for collaborating, with its edit and suggest features. However, a 50+ page document isn’t necessarily the best user experience for your staff. Consider nailing the copy in Google Docs before migrating the handbook to a platform like Notion, Coda, or ClickUp.
Consider related resources. A good handbook provides an intuitive way for employees to browse policies, benefits, and processes. But company culture is sometimes best housed outside the handbook; how will your handbook interact with other resources, like a wiki, onboarding list, and task management system? |
9. Establish a public presence |
Develop a website. Find a suitable design agency and/or web developer. (And-Now and All in Awe are two design agencies that are familiar with the needs and ideas of effective altruism community.) Collaborate to develop the visual concept, and, once the staging site is launched, “red team” it for errors. (Consider using MarkUp to annotate in-line.)
Create social media profiles. Don’t go overboard – select a small set of platforms that you’re confident you’ll have the capacity to keep up-to-date, and in sync with each other (and your website). Make sure you also update any other public-facing materials that describe your entity, like your email footers.
Create a marketing strategy. Marketing is a great tool for recruitment and spreading the word about your mission. Consider both continuous low-level marketing as well as time-capped campaigns for specific projects, and reach out to User-Friendly for a free sense check. |
10. Establish strong cybersecurity |
Set up a password manager. We recommend 1Password; LastPass has a history of security incidents and suffered a major data leak last year that included vault access.
Create an organizational data map and crisis plan. A data map shows how data flows in and out of the organization. It’s the basis of a privacy policy, a cybersecurity strategy, and demonstrates to regulators a commitment to treating personal data with care should a data protection incident (e.g. leak, cybercrime) ever arise. For such incidents, develop a crisis management plan and communications and public relations plan. Use a ‘live fire’ to ensure it’s fit for purpose.
Schedule a cybersecurity awareness day. Ideally this would involve training from an external consultant. At a minimum, it might involve an org-wide email asking staff to review the relevant policy and take steps to secure their devices (like enabling 2FA). |
11. Conduct an audit |
Determine the right time. If you’re confident with the initial entity setup, schedule an audit for 12-24 months’ time, once you’ve introduced new staff, experienced some policy creep, and made changes to key company processes.
Decide what you want audited. Audits come in many shapes and sizes. Some firms specialize in visa/immigration audits, others specialize in financial audits. At Impact Ops, we offer an operational audit that aims to: identify more efficient ways an entity could be set up; sense check systems, especially in regards to governance, finance, and HR; and help the team understand how to implement these efficiencies.
Decide who should conduct the audit. Will you engage an external consultant or agency, or conduct the audit yourself? |
Getting support
There are plenty of ways you can get support launching your entity. Outside the EA community, you could seek pro-bono support from established legal and/or consultancy firms. Within the community, consider checking out Anti Entropy’s resource portal (which includes step-by-step guides for many of the recommendations above). It’s also worth joining the EA Operations Slack workspace, which has a dedicated #starting-an-org channel.
At Impact Ops, we’ve helped several organizations launch new entities. We’re really proud of the feedback we’ve received so far.
“The support and momentum from the Impact Ops team has been really helpful in accelerating our journey towards being an independent legal entity! From developing the initial plan of action to rapidly and cost-effectively implementing it, IO’s support has helped me free up a lot of headspace and given me ease that things are being done properly.”
– Dewi Erwan, Co-founder and Executive Director at BlueDot Impact
Our mission at Impact Ops is to enable high-impact projects to grow and thrive. In service of this mission we’re excited about helping founders during this crucial time.
If you’d like support setting up an entity of your own, please get in touch at hello@impact-ops.org.