I have been watching this unfold with keen interest on how things shift for this non-profit. I started Operation turkey 17 years ago (a non-profit that helps the homeless). In that time I have learned a lot about non-profits. Mainly, donations drive non-profits and I didn’t see big pushes to drive donations for RideAustin. It seemed like that vehicle was used in the early days to start it up which doesn’t necessarily fit a non-profit mold as much as other, more compelling, business structures.

It felt odd to me that as a non-profit, RideAustin was simply asking people to donate “through their platform” and not “to their platform.” Lyft and other companies allow people to donate through them with round ups and other mechanisms, so this isn’t exclusive to a non-profit.

I feel RideAustin would have been better-served if they started out as a B Corp.

“B Corp is to business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.”

RideAustin has been transparent about their performance which fits the B corp. They could also take in tax-deductible donations in the beginning which fits the bill as well. Organizing as a non-profit will probably hurt them in the long run.

Now that they have non-profit status, they are a bit stuck. They could change their charter and update their 990, but pivoting into a for-profit business is a bit tricky.

Most of the time non-profits simply give assets to another non-profit and start over as a for-profit company rather than trying to work with the state and IRS to convert over after distributing assets.

No matter what, RideAustin was good for Austin, albeit short-lived as a dominant player in transportation due to Austin’s self-imposed regulatory hurdles. It filled a short-lived gap.