Thinking of Starting a Charity?
ASL can guide and support you
Many people leave their career jobs to create new business startups. Other people decide to 'give something back' and start a charity. Here are some notes on how to set-up.
Is a Charity the best option for you?
It is important to check that being a charity will not stop you doing things you want to do. Charity law sets out specific rules and restrictions that will regulate your charity. If a charity is not the best option you could, for example, look at working alongside another established charity that shares your passion, designate a named fund to direct monies to your cause or create a non-charitable social enterprise.
Start by defining your vision and aims and objectives
Your vision is a written picture of what you want to achieve over time. It need not be a detailed plan, but rather a description of what you want to create.
Your aims and objectives are a more detailed description of your purpose and intent – ie the reason it exists. It can have more than one purpose but it can’t have any purposes that aren’t charitable. It is a summary of what the charity is for, for whom, and what is the basic service. These aims need to be specific, measurable and achievable. You should also develop a set of values by which your charity will operate.
Not everything that benefits the community or is a good cause is charitable and you need to ensure that your vision, aims and objectives meet the criteria for a charity before continuing further.
Next, define your Structure
There are four main types of charity structure and it is important to choose the right structure that will fit with how your charity operates.
Choose a Name and write a governing document
The charity’s governing document is the legal document that creates the charity and says how it should be run. It should include the name, its objects, powers, trustees etc.
When you choose a name, it is important to remember that this is “Your Brand” – you need a name that people will remember when they are deciding to make a donation or looking to volunteer. You need to make your charity stand out. According to the Charity Commission, there are over 160,000 charities in the UK – many of whom compete with one another for funding to support the same, or similar, cause. You need to clearly differentiate your charity and aim to inspire potential donors.
It should be a name that resonates with potential donors. It could describe the function of the charity e.g. Cancer Research UK or be named in memory of a specific person but with a mission to help others e.g. Terrence Higgins Trust.
It is the Trustees that are responsible for choosing the name and if the name is misleading or already used by another charity the Charity Commission will make you change it so it is important that you decide on a name and get it approved prior to requisitioning any branded materials.
It is important to find the right Trustees. Family and friends, who share the same vision as you are great but your trustees are responsible for the general control and management of the charity and you need to have the right balance of trustees who are passionate about the cause alongside trustees with skills and experience to help you achieve your goals. The charity commission recommends a minimum of three unconnected, unrelated trustees with a good range of skills. Also, you should be aware that family dynamics can sometimes cause problems within a small board with a limited number of unconflicted trustees. Your trustees should be committed and able to attend regular meetings and understand that in general, they are unpaid – with some exceptions according to your governing document.
Done all of the above? Now you can get started as a charity
Do you need to register your charity?
If you have chosen a Charitable Incorporated Organisation (CIO) structure you need to register with the Charity Commission whatever your income.
If not and you have an income under £5,000 you do not need to register your charity with the Charity Commission. You can apply to HMRC to be recognised as a charity and claim back tax on things like Gift Aid donations.
If you have income over £5,000 you need to register with the Charity Commission.
Apply to register your charity
You need to supply:
- Governing document which clearly explains your charity’s purpose, its public benefit and how it will fulfill that public benefit.
- Proof of charity income
- Trustees declaration form
If your application is successful, your charity will be issued with a charity number and entered into the public register.
Promoting and Fundraising
You now have all the information you need to start promoting your brand.
Create a Website – websites can be a useful tool to help start your fundraising campaigns alongside other social media outlets such as Facebook, Twitter. Not only can you advertise your brand, what your charity stands for and what you hope to achieve it can also be useful to help develop contacts and encourage donations.
Raising Funds – many small charities start with funds from the individual starting the charity, friends and family but going forward it is likely you will need wider support from organisations, individuals and foundations. You should research and contact grant-making organisations and donors that focus on areas that include your aims. Your activities should be conducted in a professional manner but don’t be discouraged if your initial presentations don’t result in the financial rewards you were hoping for – it takes a lot of time and energy.
When you start to get funds in remember to spend efficiently. A rule of thumb is that non-profits should spend around 80% on its charitable aims and 20% or less on administration and fundraising. People want their donations to go to the good cause, not the administration.
Be patient – to survive for the long term you should only grow at the rate that is supported by your fundraising. Take your time and expand gradually.
The most important thing to remember when the going gets tough is your passion for what you started. All new businesses go through difficult patches, but your passion will carry you through. You will invest much of yourself with the satisfaction of helping others as your reward.