Mining your intellectual property

Supplementing traditional funding sources is getting tougher but some organisations may have income-producing assets just waiting to be put to work.

Intellectual property – your organisation’s ideas, ways of working, experience and even your brand – are all assets that can be valued and earn income. The first step, says Russell Postle, partner at BDO Australia, is an IP audit.

IP treasure

An audit can be an eye-opener, opening up a treasure trove of possibilities.

When IP is clearly identified and protected it can provide an opportunity for the organisation to sell some of its unique knowledge to others, says Postle.

Postle, who sits on the board for the Royal Flying Doctor Service in Queensland, says the organisation has been looking at how it can use its IP – of transporting and looking after patients – more broadly.

"So, for example, rather than just collecting patients using fixed-wing aircraft from regional and remote areas we have teamed with a for-profit supplier of helicopters to provide medical support services to the Australian Army," he says.

The contribution of volunteers and those doing pro-bono work should also be considered.

"There needs to be a clear understanding that the asset value of that work transfers to the charity and there needs to be a document that recognises that," says Postle.

Protecting the brand

An audit can also provide some insights into IP that needs to be protected, therefore preventing the loss of funds.

For example, when it comes to reputation or branding, there may be many layers.

"There’s the brand for service delivery; the brand for donor support, when an organisation has gift deductible status; and the brand for general community support," says Postle.

Not-for-profits should think about pursuing legal and commercial protections including registration of trademarks, patents and the recognition of copyright. A trademark, for example, can help to protect a brand from being misrepresented by another organisation.

"That’s particularly important for many of the large not-for-profits that have the benefit of gift deductible status for donations," Postle says.

Restraint of trade and employment clauses, commonly used in the commercial world, are also useful in the not-for-profit sector.

They can help to protect client and donor data if, for example, a key employee with access to the data leaves to join another organisation.

Postle suggests that seeking guidance on the Australian Charities and Not-for-Profits Commission’s governance framework can be a good starting point for organisations wanting to clearly identify their intellectual property and work out how best to protect it.

In other words…

• Your organisation’s ideas, ways of working and experience may be income-producing assets.
• Auditing your intellectual property and understanding its value may help to identify new ways of earning funds.
• Identifying IP that needs protection is an important way of preventing loss.