Start a Charity Organisation in the United Kingdom
3E Accounting’s pocket guide on creating value for society by starting a charity organisation in the UK.
Giving back to society can be done in many ways, and starting a charity organisation in the UK is one of them. Pre-pandemic statistics show more than 166,000 registered charities and 20,000 charitable status organisations in the UK. Their contribution to the economy approximates GBP12 billion annually. Running a charity can be a lot of hard work, but the rewards more than makeup for it.
A Business that Gives Back and Adds Value
Charity organisations are a great way to help the needy or less fortunate. It helps society remain ethical while improving the lives of its less privileged members. Their overall aims and missions are to have a societal impact that adds value.
Charity organisations do not earn any profit for their founders or shareholders. Instead, all revenue is employed to sustain the charity’s cause, its operations, and incidentals. Hence, while the purpose of business is for charitable causes, it is still run as a proper business.
As such, you should start with a business plan that identifies your charitable purpose. This should be within the ambit described by the Charities Act and must be for public benefit. The list of charitable purposes includes relief of poverty, advancement of education, etc. However, there are some activities that are prohibited. These include some types of political activities, taking personal financial incentives from the charity organisation, etc.
A well-written plan will enable you to write your governing document and decide what business structure suits you best. According to the UK Government website, charities can be structured as an unincorporated association or a company limited by guarantee. It can also be a CIO or charitable incorporated association.
Incorporated structures will have separate legal identities and become corporate bodies that offer the protection of limited liability. They have the same powers, responsibilities, and liabilities as any other incorporated business. Trustees will assume the role of shareholders and the board of directors. They should have the relevant experience to carry out their functions, so choosing your trustees should be done carefully.
The Charity Commission of the UK regulates all charities. You will need to register your charity if:
- It is based in England or Wales.
- It is incorporated.
- Has an annual potential minimum income of GBP5,000.
To register your charity, you will need to do a name search on the Commission’s website. Similar to naming a business, there are quite a few rules to be observed. Other documentation that needs to be provided includes a copy of the governing document, bank account details, information on trustees, etc. You should also register with HMRC for tax benefits and get a website to create awareness for your charity.
If none of these structures is what you have in mind, there are other avenues to explore. You could set up a Community Interest Company (CIC), a Social Enterprise, or a community fund. These are not charities but do have objectives that aim to support environmental or community causes.
Starting a charity organisation in the UK can be a walk in the park with proper assistance. 3E Accounting provides comprehensive company formation packages that will get the job done in no time. Our experts will do all the heavy lifting, providing you with the freedom to focus on running your business. All our business solutions are fully customisable and can be curated to fit just about any budget. Contact 3E Accounting today to experience innovative and fully digitalised services that offer best in class solutions.