How to Set Up a Charity
Before I got myself into the line of work I always thought there were only two types of Charities
Humanitarian Aid and Charities and I always believed that Charity Jobs were always the least underpaid because they were dependent upon Donations. I was confused and it took several months “before things began to fall into place”. I was right with one of the points but quickly came to the realisation that there are several UK Charity Types and knowing the basic structure will hopefully aid you if you decide to set up a Charity. To date I am aware of three main types of Business structures under which Charities and Non for Profit Organisations can fall under, for the sake of brevity I will deal with the three structures now and follow up with more details on the third type of Charity Structure in my next blog.
A Charitable Trust
Is the least complicated structure and in my opinion the easiest to set up. Especially If you are not intending to trade and don’t have any members, this structure is not a corporate body but is still an excellent way to focus resources, money time, volunteering to a charitable cause.
An Unincorporated Charitable Association
This structure is very cheap to set up, it can be run relatively informally, allows for lots of flexibility and is not normally subject to legal control, unlike a Company. Crucially there are no rules on how this organisation is run or to whom it needs to report to, as there is no central regulator or register of association.
However, there are some key requirements for all associations such as they require two or more people with a common non- business aspiration and have a contractual relationship between them. They must be governed by a set of rules, this is quite an important role as once the structure becomes “live” it will offer protection to the management, propose a vision for the Association as well as tackle disputes between members as and when they arise and must not be a temporary structure in nature. This structure is most suitable for local community groups who do not intent to trade.
The Corporate Charity Structure is the structure which is where conventional Charities will fall under however they can be established in three different ways, (We will discuss the different structures in the next blog) for now this structure is for those who wish to act more like a business, fund raise, borrow money, own property, employ charity people, staff, volunteers even open a number of Charity Shops. Having a Corporate Structure will offer protection to staff, the management and the trustees alike this will become vital when contracts have to be agreed, this structure also offers protection by limiting liabilities.