StartingACharity

 

The Scope of These Guidance Leaflets

This series of leaflet is intended to give you just a quick overview of the things that you will need to take into account in setting up a new small charity.

They are NOT a professional opinion or a full and comprehensive guide to Charity Law and all the associated regulations.
They are just a simple overview of the main points for those who want to set up a small charity to serve their local community or to help those with a particular area of need.

So if you are expecting your charity’s income to be more than £250,000 in its first year, or to own property, or to employ more than the equivalent of 3 full-time staff then the information in these leaflets will not be sufficient and you should seek appropriate professional guidance elsewhere.

However, take care!
Not all professional lawyers, accountants and financial advisors have adequate knowledge or experience of charity law and its applications (including some who claim that they do).   So if you are going to engage professional advisors, and particularly if you are going to pay them a fee, make sure that their Letter of Engagement explicitly confirms that they have relevant experience in charity law and its applications.   And if they will give you written testimonials from other charities they have worked for, then even better.

 lawyer
Please remember
to read our Legal Notice

 

The Guidance Leaflets
Click on the required title to open a downloadable PDF copy
or be taken to the appropriate webpage.

Introduction & Overview
An overview of what needs to be done to set up and register a new charity.   And a summary of the contents of each leaflet to guide you through all the necessary steps.

Outputs & Outcomes
Understanding the importance of Outputs & Outcomes in describing what your charity is going to do, and the differences between them.

Charitable Purposes/Objects
How to choose Charitable Purposes which will comply with the requirements of the Charities Act.
Example Charitable Purposes
Some example charitable purposes provided by the Charity Commission

Governing Document
How to choose the right Governing Document
What are the advantages (and disadvantages) of a CIO over an Unincorporated Association?

Trustees: Their Roles & Responsibilities
You'll need some trustees.  The trustees of the charity have the ultimate overall responsibility for ensuring that the charity operates in compliance with the Charities Act - ie:

  • delivers public benefits;
  • provides services and goods to the charity's beneficiaries which are consistent with its charitable objects as registered with the Charity Commission;
  • uses the charity's money and other resources wisely in ways which are clearly and exclusively necessary, reasonable and incidental to delivering the charity's objects.

Although in the small minority (less than 20%) of larger charities much of the day-to-day running of the charity will be delegated to an operational/management team, in the majority of smaller charities (ie: the more than 80% of charities which have annual incomes less than £250,000) much if not all of the day-to-day running of the charity will be done by the trustees themselves (the "head cook and bottle-washer" scenario), perhaps with some part-time administrative support.

More information and guidance leaflets on how many trustees you should have and their typical roles and responsibilities can be found on the "Trustees' Responsibilities" page of this website.

 

Bank Account
Why you need a bank account - and how to go about getting one set up.

Simple Is Beautiful:  Charity Accounts as if Trustees Mattered
Setting up & Managing Your Financial Records
Inspired by the iconic book "Small is Beautiful:  Economics as if people mattered".
Clicking on this link takes youto another page on this website.   There you will find a series of leaflets, with a working example spreadsheet, of how "ordinary" volunteer Trustees can easily set up and run their charity's accounts to the required Charity Commission standard without having to become "professional" accountants.

Programme Planning
"People don't plan to fail  -  they simply fail to plan"   (an old adage)
Clicking on this link takes you to another page on this website which explains why you need a Programme Plan (usually called a Business Plan in the commercial sector) - and how to set one up.

Policies & Procedures
Clicking on this link takes you to another page on this website where where you will find downloadable working examples of the common Policies & Procedures that charities should have in place.
But there's no "one size fits all".   So the examples won't suit every charity.   But they're better than staring at a blank sheet of paper wondering where to start.

Registering Your Charity with the Charity Commission

Registration is now done On-Line
Registering a new small charity is now done on-line through the Charity Commission's website.

The first time you go to the site you will need to click on the "Register as a New User" link to create a registration account.   But that is useful because it means that you can enter and save your application in "bits and pieces" - ie: as you (inevitably) find that you have to break off creating the application to find additional information, or simply to think more carefully about your responses to the questions, the form will save the information that you have already entered so that you can return to it later to add more, or change what you had previously entered.

Incomplete application forms are not retained indefinitely - at present the Charity Commission deletes them if they remain unaltered for more than 6 months.   But that is generally more than enough time to allow the form to be completed, even when breaks/interruptions are necessary to collect additional information or to consult with other trustees on what has already been entered.

Registration is Inter-Active
The on-line application form is now dynamically inter-active - ie: the questions that you get asked will depend on how you have answered earlier questions.   That means that it is no longer possible to provide you with a detailed "road-map" through the application process.

About the Charity.
The on-line application form starts off by asking you to provide some initial identification information about who you are and the name & type of charity you want to set up.

Classification:
The next section of questions asks for some basic What - Why - Who - Where information about your charity intends to do - ie: where your charity will fit within the overall classification of charities.   These require mostly "tick the relevant box" answers.   As the form is inter-active you will find new/additional boxes appearing depending on which boxes you have already ticked.
{For example:  if under the initial "What is you organisation set up to achieve" you tick "Religion" additional boxes will appear to identify which religious sects will apply.}
But resist the temptation to tick as many boxes as you can - tick only those which are primary objectives in their own right.
{For example:  If you had previously ticked "Religion", and one of your religious beliefs was the respect for and care of living creatures you WOULDN'T also have to tick "Animal Welfare".   Charity Commission guidance on "Animal Welfare" is specific that it applies only to animal in some kind of distress - ie: keeping healthy animals as pets is NOT a legitimate charitable object in its own right, though it would legitimately be incidental to the individual religious beliefs of members of the charity.}

Public Benefit:
The initial "classification" section is followed by a "Public Benefit" section of more open-ended questions asking you to go into more free-text operational detail about how the charity will deliver the objectives.   Again, the questions which will be asked will be determined by which "boxes" you ticked in the "Classification" section.
As you go through this section it is common to find that what you have entered as an answer to an earlier question is actually more appropriate as the answer to a later question.   It is possible to "cut and paste" text from one answer box to put into another answer box.   But that can be rather cumbersome and time-consuming as the website is NOT a full and comprehensive text editting system.

It is therefore suggested that rather than trying to answer the questions directly in the on-line form you take advantage of the on-line form's ability to save whatever you have already entered to return to and further edit it later.   Proceed through the on-line form and, at each question box, simply copy the text of the question from the on-line form and paste it into an extermal word-processor (eg: Microsoft Word, LibreOffice-Writer).   Then type "To be completed" (or something similar) into the answer box to enable you to move on to the next question in the on-line form.
That way you can both get a clear picture of the overal scope and context of all the questions that you have to answer BEFORE your try to answer any of them, AND you can use the more flexible editing factilities of off-line word-processing software.   It also makes it easier for sharing your draft responses to the questions with the other trustees and interested parties and to incorporate their comments and suggestions back into the drafts.   Once you have the draft answers to the questions to everyone's satisfaction it is a trivially easy matter to return to the on-line form and just copy and paste the answers from the word-processor to replace the "To be completed" put there earlier.

As with the earlier "tick in the box" section, keep your answers short, simple, factual and pragmatic.   What the Charity Commission Assessor will be looking for is evidence that you have a clear understanding of what you, as trustees, are planning to take on and achieve by setting up your charity, the likely risks and obstacles on the way, and how you will be able to demonstrate that you have successfully achieved your objections in the charity's first 2 or 3 years.   The Assessors see many applications for charity registrations and will not be fooled by overoptimistic "pie in the skye" wishful thinking about how you are going to radically change the world in the next decade.   "Feet firmly on the ground" is what will get your charity successfully registered not "head in the clouds".

Property, Contact Information, Regulators, Finance, Trustee Details, Declaration:
The remaining sections of the on-line registration form are mostly about straight-forward factual details.
But, as with the earlier sections, do look through all of those sections to clarify what information is required before you start to fill them in.   It can save a lot of time and unnecessary frustration incurred by getting to a question only to find that you could have collected that bit of information at the same time as you were collecting the information required for an earlier section.
And DO meticulously check that your have collected and included all the above required factual details before submitting your form.   The Charity Commission Assessors (like most public sector organisation) are currently under-resourced as a result of signification cut-backs over the last years.   So, understandably, they can get a bit "tetchy" if their time is being wasted by having to follow up on incomplete applications.

The Charity Commission Response:
Expect the Assessor to come back with some questions and challenges however convincingly pragmatic you have tried to make your application.   This is common "good practice" when reviewing and evaluating proposals.   Your application will (hopefully) be well thought-out and convincingly written - but not all will be.   Some will be simply well-intentioned but impractical.   And a tiny minority will have "ulterior motives".   So the Assessors are not there to expeditely rubber-stamp every application which passed over their desk.

Even if those challenges seem a bit "silly" or "nit-picky" - if you can't answer them quickly, and convincingly in a way that is consistent with your initial application the Assessor will easily be able to see that you, and your fellow trustees, have not thought through your charity proposals seriously enough.

In Summary:
Preparing a charity registration application can seem rather long-winded and bureaucratically tedious.   But it is not complicated.   We believe that, with a bit of help and guidance, anyone who is competent enough to run a charity effectively, and is committed to their charitable objectives, is competent to register their charity themselves.   And the registration process with the Charity Commission is free of any charges.

There are commercial firms which offer a "register your charity for you" service and in some cases might be worth their professional fee.   But beware of "lend me your watch and I'll tell you the time" consultants.   Most of what needs to be included in the on-line registration is information that a commercial registration service would have to ask YOU to provide to them anyway.   So if you are looking for a commercial service do:  1: ask for references from charities that the firm has previously successfully enabled to register (and do check the reference directly);   2: ask for a "no registration no fee" contract.

So Small Charity Support does not offer a commissioned (paid for) charity registration service.   But we are happy to try to help you with any queries or concerns which are not covered by the leaflets in this series.
Just e-mail you queries or concern to us at This email address is being protected from spambots. You need JavaScript enabled to view it. and we'll get back to you as soon as we can.

 

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All the other materials on this website are the intellectual property and copyright of Small Charity Support
.   All Small Charity Support's services and materials are made available free of charge and royalties for use by bona fide small charities and not-for-profit community organisations.
Use of the materials, directly or modified, for commercial or for-profit purposes
is NOT permitted.