Charities exist to benefit the public, not specific individuals. Because of this, charities pay reduced business rates and receive tax breaks but are restricted in what they can do and how they work.
For example, charities need to:
- follow charity law, including telling us and the public about their activities
- only do things that are charitable according to the law
- be run by trustees who do not usually personally benefit from the charity
Find out what makes a charity, including what the law recognises as charitable:
You must register your charity with us once its annual income is more than £5,000.
Before you set up a charity
You should first think about whether being a charity would stop you doing things you want to do. For example:
- charity trustees are normally unpaid volunteers – they can only be paid with our approval in certain situations
- charities can’t usually benefit anyone connected with the charity, for example giving work to a trustee’s family member or company
- charities can only do things the law recognises as being charitable – they can’t do a mix of charitable and non-charitable work
- charities can’t take part in certain political activities, such as campaigning for a change in government
- registered charities must provide public, up-to-date information about their activities and finances
There are over 160,000 registered charities in England and Wales and many more unregistered charities with incomes under £5,000. Many small charities find it hard to get enough money for their cause. This is especially true for new charities because many people give to organisations they already know.
Setting up and running a charity takes a lot of work. If you haven’t yet recruited any trustees, you could think about joining forces with an existing charity instead. Use these services to find trustee and other volunteering opportunities in your area:
- Trustee Bank from the National Council for Voluntary Organisations
- Trustee Works
- Find volunteer placements – Gov.uk
Setting up a named fund in an existing charity
Some charities will let you set up a named fund if you want to raise money for a one-off event such as a disaster. This saves the time and effort of setting up and running a charity then closing it once the original need has been met. Depending on the charity, you can say where you want the money to go.