Sometimes people assume that setting up a charity is the best or only option when they are setting up a new organisation which aims to help. However, sometimes this isn’t the case. Consider these points below to see whether a charity is the best option for you and your organisation.
- Who you will help and how you will help them: If your organisation benefits the community, it does not mean that you can automatically set up a charity. This is because not everything that benefits the community is charitable. You must have specific aims (known as ‘charitable purposes’) to set up a charity. There are 13 purposes and these include the prevention or relief of poverty and the advancement of education.
- Is another charity that is already set up to achieve your aims: if this is the case, it may be simpler to collaborate. This means you are not competing for resources.
- Charity restrictions: check that being a charity will not stop you doing the things you want to do. For example, certain political activities like campaigning for a new government are not permitted nor can trustees receive any personal benefit unless it is ‘incidental’.
If a charity is not going to be the best option, then you could think about setting up a social enterprise or a trust fund. A social enterprise is a business that has social, environmental or community-based objectives. The rules on ‘charitable purposes’ do not apply. A Trust fund can be set up if you want to raise money for a certain cause. This saves the time and effort of setting up and running a charity.
Any further queries? VODA can offer support, advice and training to your VCSE group. Please contact VODA’s Core Services Team by telephone on 0191 643 2636 or by email on [email protected].
