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How To Set Up A Charity

How To Set Up A Charity

Whether you have some spare time on your hands, there's a cause close to your heart, or you'd like to honour a loved one's memory, setting up a charity can be hugely rewarding. It might seem a little daunting at first, but with the right advice you'll have things up and running in no time.

Why Set Up A Charity?

There are so many good causes you may wish to get involved with. Your involvement may be motivated by something that's happened in your own life or to a loved one. Or, you may have a lifelong passion that drives your inspiration.

Helping others is hugely enriching, and even small charities can make a big difference to lots of lives. If you have your own business, creating a philanthropic arm is a great way to show that your company takes its social responsibility seriously.

How Do I Set Up A Charity?

If you want to know how to set up a charity, there are six main elements to consider.

1. SELECT YOUR CAUSE

By definition, your organisation must have charitable purposes for the public benefit. These can be wide-ranging, but may relate to things like health, poverty, education, human rights, animal welfare and protecting the environment. Lots of people choose to get involved with something close to their hearts when setting up a new charity. This can drive their passion for making the venture a success.

2. CHOOSE TRUSTEES

Usually, you're going to need at least three trustees to be part of your charity. All of these people must be aware of your organisation's commitment to the public benefit of your operation, and keep this in mind with their decisions and actions. Your trustees are likely to have a major role in the success of your charity, so it's important to choose wisely from the start.

3. DECIDE ON A NAME

Picking a name for your charity requires plenty of thought, and not just to make it catchy or memorable. You need to check there isn't already a charity with a similar name, steer clear of trademarked words, and try to avoid any words or acronyms which could offend anybody (in English, or in other languages). You can use abbreviations. You'll need approval from the Charity Commission if you use the words 'charity', 'charities' or 'charitable', and to register with Companies House.

4. FORM A STRUCTURE

The structure of your charity will help to determine things like who runs it and how. It will also set out the things your organisation's able to do, such as buying property or employing people. The four most common charity structures are:

  • Charitable company,
  • Charitable incorporated organisation (CIO),
  • Charitable trust, and
  • Unincorporated charitable association.

5. PRODUCE A GOVERNING DOCUMENT

This is effectively a rulebook for your charity, which lays out how it's run. It should cover things like your charity's purpose, appointment of trustees, and how it can be shut down if necessary. The format of your governing document depends on the structure of your charity, and all trustees need to sign it.

6. REGISTER YOUR CHARITY

You need to register your charity if it's based in England or Wales, and if income exceeds £5,000 per year or you've set up a CIO. You'll need things like your accounts, bank details, information on your trustees, and an explanation of your organisation's charitable purposes.

Things To Know Before You Set Up A Charity

  • There are more than 160,000 registered charities in England and Wales, and a number of unregistered ones as well. It's a big commitment to start your own charity and keep it running, so make sure you're prepared for this.
  • If you decide you can't commit to setting up a charity, you could consider a named fund or social enterprise instead.
  • You need approval from HM Revenue and Customs if you want to receive tax relief.

How To Help

Whether or not you decide setting up a charity is the right option for you, you can still make a difference by playing People's Postcode Lottery. Funds from every ticket sale go towards range of deserving organisations all over Britain and around the world.

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