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What you need to think about before setting up a charity

Before you set up a charity, you should consider if it’s the right way forward for your cause.

First, you should do some research to find out if there are already charities with the same activities as yours.

There are 180,000 registered charities in Britain. You might want to help or join up with an existing charity rather than setting up a new one. This way you would also be able to share other resources, such as office space or volunteers. Often this is a faster and more efficient way to achieve your charitable goals.

Use the 'Find a charity' link to find out what other charities are doing.

Many charities also find it difficult to get enough money for their cause. This is especially true for new charities because many people give to organisations they already know. Most charities use fundraising as a way to fund their projects. However, fundraising isn’t exclusive to charities. Other organisations, such as community groups, can use this way of making money.

• Find a charity Opens new window

• Working with other charities Opens new window

• Voluntary and community groups - applying for funding

Understanding how a charity works

To be a charity, your organisation needs to be run by more than one person. It must:

• follow charity law
• only do charitable work
• use all the money it makes or receives to help it do its charitable work

Advantages and disadvantages of becoming a charity

Some of the advantages of becoming a charity are:

• people are more likely to offer time, energy or money to a charity
• many grant-makers and other funders only give to charities
• many organisations offer free or discounted help and advice to charities
• charities receive a wide range of tax breaks

However, charity law sets restrictions and rules that you must follow if you become a charity:

• you need to set out and follow rules for your charity, in a ‘governing document’
• your charity can’t provide benefits to certain people and not to others unless there is a legitimate reason, eg it helps anyone with a specific disability
• your ability to take part in political activities and trading with other companies will be limited
• your charity can’t have a political purpose or support a political party
• your charity can’t benefit a specific named individual or individuals
• you and the other trustees can’t usually be paid or gain financially from the work of the charity (this also includes people you have a relationship with)

• Tax guidance for charities Opens new window

• Campaigning and political activities advice for charities Opens new window

• Alternatives to registering as a charity

Charitable work: what counts and what doesn’t

Your charity can only do work which the law says is charitable. It can’t do a mix of charitable work and non-charitable work (eg helping relieve poverty and promoting a political party).

The following work is said to be charitable if it's for public (not private) benefit:

• preventing or relieving poverty
• advancing education
• advancing religion
• advancing health or saving lives
• advancing citizenship or community development
• advancing the arts, culture, heritage or science
• advancing amateur sport
• advancing human rights, conflict resolution or reconciliation or promoting religious or racial harmony or equality and diversity
• advancing environmental protection or improvement
• relieving those in need, by reason of their youth, age, ill-health, disability, financial hardship or other disadvantage
• advancing animal welfare
• promoting the efficiency of the armed forces of the Crown, or the efficiency of the police, fire and rescue services or ambulance services

• Charitable work: more information from the Charity Commission Opens new window

Useful contacts

• Home and community contacts