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 development@voda.org.uk.
