Before you start to set up a charity make sure that you know it is the best option for what you want to do.
Know who you will help and how you will help them
If your organisation benefits the community, it doesn’t mean that you can automatically set up a charity.
This is because not everything that benefits the community is charitable.
You can set up a Community Interest Company instead. This is a company that helps the public but is not a charity.
You must have specific aims (known as ‘charitable purposes’) to set up a charity.
Check if a charity is already doing what you want to do
Find out if any charities are already doing what you want to do.
Working together can be more effective than setting up a new charity. For example, so there are not two charities competing for resources.
You should also search the internet to find charities who are not registered with the Charity Commission.
Check charity restrictions
Check that being a charity will not stop you doing things you want to do.
- you need to follow charity law and give up to date information on your work and finances
- charities cannot carry out certain political activities, like for a change in government
- you must make independent decisions about your own work if you plan to work with others
- trustees, anyone connected to them, or the founder, cannot receive personal benefit unless it is ‘incidental’ and you make independent decisions on personal benefit and properly manage conflicts of interest
Alternatives to setting up charity
Set up a Community Interest Company (CIC)
A CIC is a company that is set up to benefit the community rather than shareholders.
The rules on setting up a CIC are not as strict as the rules on setting up a charity.
A CIC cannot also be a charity.
Set up a social enterprise
A social enterprise is a business that has social, environmental or community-based objectives. The rules on ‘charitable purposes’ do not apply.
Set up a named fund or a trust instead of a charity
Some charities will let you set up a named fund if you want to raise money for a one-off event such as a disaster.
This saves the time and effort of setting up and running a charity.
If you have more than £10,000 to donate you could set up a charitable trust.