Whether it be to remember a loved one or address a social need, setting up a charitable organisation is one of the most rewarding ventures a person can undertake.
While investing time, money and effort into making positive change is always worthwhile - the process can be long and complex.
That’s why we’ve condensed everything you need to know into 5 handy steps. If you’re thinking about going down the route of establishing your own charity, read on to find out exactly what you need to do.
What Is a Charitable Organisation?
A charitable organisation is a legally registered charity which can be set up by anyone who is willing to dedicate their time to supporting a particular cause in an official capacity. They are normally created for one of the following reasons:
It serves charitable purposes (e.g. to promote, advance, provide or relieve)
It provides a public benefit
Ultimately, the purpose of a charitable organisation is to offer a substantial social benefit for a portion of the public. There are many benefits to being a registered charity, such as:
Advantageous tax status
Exemptions from corporation tax
Public recognition and support (e.g. funders, corporations and the general public)
Ability to reclaim gift aid on private donations
Support from The Charity Commission
Before starting up your charity, it is important to think of the following:
Are there other charities which focus on the same cause you are passionate about that you can join and help to strengthen their offering?
What are your charity’s services?
Who will your charity help?
Where will the charity operate?
From here, you can begin the process of starting up your own charity.
Setting Up a Charity
To set up your own charitable organisation, there are a number of crucial steps to be aware of. Having an idea of what’s involved will help you draft a framework that’s both systematic and thoughtful.
Step 1: Find Your Trustees
Trustees play an essential role, as they share responsibility for the operation of the charity. It’s important that they are qualified and passionate about the cause, as they contribute a lot to the charity’s success rate.
For example, they can:
Serve as a means of communication with communities that a charity exists to serve
Bring valuable experience to charities
Help to oversee operations and ensure that charities are well-managed
Approve fundraising strategies
All while ensuring all activity is delivered in line with your purpose.
Trustees need to be over the age of 18, a resident of the country that charity status is being applied for, be able to act within the charity’s best interest and cannot currently be bankrupt or insolvent. Writing a brief job description and person specification covering the skills, experience and knowledge required is the best place to start. From here, you can then begin the recruitment process.
You need at least three trustees to set up your charity.
Step 2: Choose a Charity Structure
The next step is deciding what sort of legal structure your charity will have. For example, there are over 180,000 registered charities in the UK, but each operates differently from one another depending on what better suits the charity’s plans.
Your charity’s structure will then be outlined in your governing document (the legal document that creates the charity and says how it should be run).
The type of structure you choose affects how your charity will operate, such as:
Who will run it and whether it will have a wider membership
Whether it can enter into contracts or employ staff in its own name
Whether the trustees will be personally liable for what the charity does
There are four main types of charity structure, these include:
Unincorporated association
Trust
Charitable incorporated organisation (CIO)
Charitable company (limited by guarantee)
Step 3: Name Your Charity
While it may seem like a relatively simple step, there are several rules to be aware of. This will save you a significant amount of time in the long-run when applying to register your charity.
For example, you cannot name your charity something that’s similar to an existing charity. You cannot use trademark names, offensive words or acronyms, or have a name that’s misleading or does not align with your offering.
It is best to check with the charity commission or regulator in the country / jurisdiction that the application for charitable status is being made, you should be able to search and check the names of already registered charities using charity commission / regulator records.
Step 4: Create Your Governing Document
Your governing document will act as a rulebook for your charity. It outlines everything from your purposes to your organisational structure, and will be key in moving forward with your new venture. Mainly, it helps interested parties gain a better understanding of what you plan to do with your charity.
More specifically, your governing document will set out:
Your charity’s purpose
Who is responsible for running it
How they propose to run it
The method in which trustees will be appointed
Rules about trustee payments and expenses
How to close the charity
You can create your governing document using your own template, but it may mean registration takes longer. Trustees must also meet to sign the governing document.
Step 5: Register Your Charitable Organisation
You can register your organisation via the following websites:
When you apply, you will need to be able to answer questions surrounding your charity’s purposes, operations and income. You will also need to provide your charity’s name (name of the organisation / legal entity you wish to register as a charity), bank account details, recent accounts, contact details, trustee details and a copy of your charity’s governing document (in PDF format).
If you wish to speak to a professional that can help you with every step of setting up your own charitable organisation, contact S3 Solutions today.