The main things you need to think about when forming a charity is the structure, and who is best placed to be part of the team of trustees. The structure you choose will dictate the governing document required. This sets out how the charity will be run, by whom. With specific practical details covering, but not limited to;
the objectives and purpose of the charity.
operational matters such as payments and expenses.
what will happen if the charity closes.
The projected turnover of the organisation will decide whether you need to register with the Charity Commission. Our specialist charity lawyers can help you in both your planning and implementation.
What to consider first when setting up a charity
Before setting up a charity it is important to have considered the alternatives. Other options depending on your objectives may include a Community Interest Company, Social Enterprise, or trust. Each option provides differing degrees of flexibility and requirements for governance.
Alternatively, you may find another charity already exists which already works with the beneficiaries you wish to help and fulfils your aims. Often collaboration rather than competition can be of greater effect.
Having considered the options, if you still wish to proceed with the formation of a charity, you then need to ensure your organisation meets the purposes required. In England and Wales, a charity is an organisation that is:
- established for charitable purposes only.
- subject to the High Court’s charity law jurisdiction.
Your charity’s objects, which are set out in your governing document, must:
- fall within one or more of the 13 charitable purposes defined by law.
- be for the public benefit.
Proceeding with the formation of a charity
To form a charity a number of individuals willing to stand as trustees must be identified. This is an important stage as these trustees will be responsible for the strategic operations of the charity. It is imperative they understand their legal obligations.
You are also required to select a structure for the charity, this is vital as it affects how the charity will operate. Not getting this right at this stage could in the future limit the charity’s ability to broaden membership, enter into contracts or employ staff and importantly for the trustees, could result in unexpected personal liability.
The structure you choose will dictate the governing document required. This sets out how the charity will be run, by whom, and with specific practical details covering but not limited to the objects and purpose of the charity, operational matters such as payments and expenses, and what will happen if the charity closes. The projected turnover of the organisation will decide whether the charity needs to register with the Charity Commission having selected an appropriate name.
Our specialist charity lawyers can help you in both your planning and implementation of the above. With a breadth of experience and looking after a range of charities from start-ups to national organisations, we are able to help you ensure the right decisions are made.