So you want to know how to start a charity?
Let’s be clear: there are plenty of reasons not to start a charity. There are so many already in existence, almost all of which need more funding and general support. You no doubt have other things to deal with: a steady career, for instance. It’s also tricky to keep a charity going — and when you have altruistic goals, it’s even harder to handle failure.
But that doesn’t mean you shouldn’t consider it. If there’s a cause near and dear to your heart, or you’ve simply taken note of an injustice that’s consistently being overlooked, then maybe the best way to get results is to start your own charity.
The good news is, it’s actually simpler than you might think. In this post, we’re going to set out the steps you need to follow when starting a charity. Let’s get started.
Define your charitable purpose
To ensure that your charity meets all legal requirements to be defined as such, you need to have a crystal-clear outline of its purpose. What outcome are you attempting to reach? Whom are you seeking to help? How do you intend to support them? These questions need answers.
There are 12 distinct categories set out in the Charities Act (the advancement of animal welfare, for example), and fitting your purpose into one of them is the neatest way to make your case — though there’s also a 13th category that’s a catch-all container for unanticipated arrangements, so you don’t really need to worry if you have a different purpose in mind.
What ultimately matters is that you have a simple and unambiguous definition of a worthwhile and realistic charitable endeavour. Consider that you’ll need your purpose both for legal registration and for explaining what exactly you’re trying to do for anyone curious.
Possible problems include having non-charitable elements (which is unacceptable for obvious reasons) and just having a desired outcome with no specified plan of action for delivering it. If you’re concerned that your purpose isn’t good enough, take a look at the identified purposes of some of your favourite charities to see how they structured theirs.
Pick the right charity structure
There are four typical charity structures recognised by the UK government, so you need to decide which one you’d like to use.
Two require incorporation, and two don’t. If you’re unsure about what that means, view it this way: an incorporated entity limits the liability of the founders and staff members.
Let’s look at the former, then go through the latter:
Charitable company limited by guarantee
This form of incorporated charity has been around for a long time, and involves a company that must file paperwork with both Companies House and the Charity Commission — though it’s the registration with the former that solidifies it as a legal entity.
Charitable incorporated organisation (CIO)
Introduced in 2013, this legal construction was pointedly developed to suit charities. It keeps the company-like incorporated structure of a charitable company but removes the need to register with Companies House. This significantly reduces the paperwork required.
If you don’t need a corporate structure, you can establish a charitable trust. You’ll need to create a trust deed to identify the starting assets to be used by the identified trustees to serve your charitable purpose. Once the trust is up and running, of course, it can raise more money.
Unincorporated charitable association
Perhaps you’d rather keep your charity informal, in which case you can have an unincorporated association with a charitable purpose. It will essentially function as a group with members. You’ll need a constitution with exclusive and clearly-stated charitable aims. No further paperwork is required until the annual income passes £5,000, at which point it’s necessary to register with the Charity Commission and provide association updates on an annual basis.
How to choose your charity structure
With those types identified, what should you choose when you’re starting a charity?
Well, it depends on what your goals are and how you want the charity to run. If you want to employ people, have an office, and maintain maximum credibility in the eyes of potential donors, then you should incorporate — and the CIO model is going to prove easiest.
If you don’t have the time to deal with a lot of paperwork and regulations (and you simply want to run the charity with a group of people you know), then either of the unincorporated structures will be a good option for you. Setting up a charitable trust probably makes the most sense. Raising money will be easier with a trust: it’ll be hard to convince people to trust in a relatively-casual charitable association.
Recruit suitable trustees
No matter what form your charity takes, you’ll need trustees to start a charity: people to assume responsibility for running the charity and making all the necessary decisions.
This is a big part of starting a charity. How you appoint them is largely up to you, but various things can disqualify someone from serving as a charity trustee, including:
- Not meeting the minimum age (16 for incorporated charities, or 18 otherwise)
- Appearing on the sex offenders’ register
- Being bankrupt or having an IVA debt-payment plan
- Having unspent convictions for pertinent offences (e.g. fraud)
There’s no legally-required number of trustees when you are starting a charity, but it’s recommended that you appoint at least three.
Having too few trustees will impact your charity’s efforts very significantly. You should also be sure to avoid appointing too many, though, as that can over-complicate matters. It’s worth defining minimum and maximum trustee numbers in the charity’s founding documents.
Choose a suitable name
The name of your charity isn’t everything, but it’s certainly important for conveying both its goal and a sense of professionalism and/or personality when you’re marketing it. A vague name will allow confusion about what the purpose is, for instance.
There are also some reasons why a charity name can be rejected at the point of registration. Here they are:
- It gives a false impression (e.g. a homelessness charity called Cancer Aid)
- It contains something that could plausibly be considered offensive
- It’s too close to the name of another charity (e.g. Children in Great Need)
- It includes a trademarked word or phrase without permission
Note that you can use the word “charity” (or any of its forms), but only after getting approval from the Charity Commission. You can also throw in additional names, whether they’re abbreviations (acronyms or initialisms, largely) or simply alternatives to help you effectively market your charity to different audiences.
There’s one more notable quirk, which is that you’ll need to provide translations for any non-English words in your proposed name. This is understandable because something that sounds alright might actually be offensive or just misleading in another language.
Write your charity rulebook
Every charity needs a governing document to state everything that needs to be defined: who’s in charge, what the intent is, how it will be governed, etc. This document can be fairly simplistic (if you’re starting an unincorporated association, for instance) or lengthy and complicated. It all depends on the scale of what you’re trying to create.
Take the time to get your rulebook completely right when you are first starting a charity. It isn’t something you’ll be using as promotional material, but it’s possible that potential donors or supporters will want to read it before getting involved. Transparency and clarity are absolutely essential.
Additionally, there are some protocols to be followed. The formation of a trust requires an independent witness to view the signing, and a trustee of any charity type must sign the governing document before they can officially join the team.
Register your charity
When it comes to how to start a charity, this step is technically optional (like the next) because you don’t need to register an unincorporated charity that brings in less than £5,000 per year — but you should register your charity regardless, because there’s no good reason not to.
Failing to register it when you start a charity can end up causing you problems. For instance: if you don’t secure the charity name, someone else can register it and put you in a difficult position.
Want to know how to register a charity in the UK? You can register your charity here.
Build a donation platform
Now that your charity is assembled, you need to face the hardest challenge yet: managing it. And the first thing you’ll need to do is figure out how you’re going to bring in the money to achieve long-term results.
That means building a donation platform: in other words, creating a website for your charity and configuring it so you can use it to take donations.
There’s a reason why most UK charities run their sites on WordPress, which is that it’s free, convenient, and highly flexible. Accordingly, that’s our suggestion. Choose any starting theme you like, install plugins to ensure that you can take varied payments, and start promoting your site through social media activity and PR mentions.
To learn more about what makes WordPress a good choice and how you can set it up to serve as a strong charity foundation, take a look at this guide. Once your donation platform is built, all the building blocks will be in place, and you’ll be ready to run your charity.
So there you have it: how to start a charity in seven (relatively) simple steps. Follow this guide and you won’t go far wrong when you’re setting up a charity in the UK. Good luck!