A couple of people have reached out to me on CharityConnect asking how to set up a charity in the UK. This could be a simple question to answer. The process is often laid out in six steps:
- Find trustees for your charity - you usually need at least 3.
- Make sure the charity has ‘charitable purposes for the public benefit’.
- Choose a name for your charity.
- Choose a structure for your charity.
- Create a ‘governing document’.
- Register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).
(Note: these steps have been taken verbatim from the government website here.)
...but this is not the response that I usually give when people ask me about the process. Instead I ask why they want to set up a charity. There are over 180,000 registered charities in the UK and, according to the Small Charities Coalition, an estimated 600,000 unregistered charitable groups…so why create another one? Here are some of the common responses I receive:
“I’m setting up a charity to... remember a loved one”
A common reason that people want to start a charity is to keep a loved one’s legacy alive. It is a great way to turn a death into something positive, however I would question whether an entirely new charity is necessary. Stephen Sutton
and the Bobby Moore Fund
provide us with a great examples of how investing in an existing charity can keep someone’s legacy alive. This way you can benefit from the knowledge and infrastructures of another organisation while still achieving your primary purpose.
I’m setting up a charity to...address a social need
I have spoken to many people, who do not currently work in the charity sector, who have identified a social need and their instinct is to set up an organisation to help tackle the issue. The chances are that there is already an organisation fulfilling the need you would like to address. If there isn’t, then there may be a good reason why. This isn’t true of all social needs; Trussell Trust, the largest foodbank charity in the UK, was only set up 11 years ago as there was a need that wasn’t being filled by anyone else...but it is uncommon to find a genuinely new need that someone isn’t already trying to address.
I’m setting up a charity because...the current charities aren’t doing a good job
It can be frustrating to sit on the side lines when you can see inefficiencies, failure to prioritise effectively or an organisation not tackling an issue you’d expect them to address. As an example, when I worked at Cancer Research UK, supporters would question why we were investing more into breast cancer research than brain cancer research. In this incidence, it was a carefully considered decision by the charity based on lots of different elements that were not easy to explain in one sentence. Resultantly, the charity ran workshops for staff, volunteers, and supporters to explain how they decided upon where funds were best invested. Taking the time to explain this process cost the charity time and money – something that not all charities have the luxury of giving to these purposes.
Sometimes charities that may appear to be making the “wrong” decision simply haven’t been able to explain to you exactly how that decision was made. I would recommend investing the time to understand why existing charities are operating in the way they do. Unless the charity is doing something in a way that you completely disagree with you may be better off collaborating with them rather than competing with them.
I’m setting up a charity to…attract more money into the sector
There will be occasions when having a new charity that is structured in a different way, or has a unique approach to its activities, helps to attract more money into the charity sector. This can be an exciting opportunity. You may be able to help tackle a social need quicker…however I would be mindful of filling a need that has previously been addressed by the State. The more charities adopt roles that the State previously filled and find funding sources that do not involve the Government, the less they will invest in this area and the more dependent beneficiaries will become on charity.
I’m setting up a charity because...I want to be known for doing something good
Admittedly, no one has ever given me this answer when I have asked why they want to set up a charity. Yet my fear is that some people want to set up charities because they want to have the name attached to something “good” rather than their focus being the outcomes of doing the something good.
No one person runs a charity. Charities have very specific structures in terms of the way that they need to be governed. The difference between setting up your own business and setting up a charity is that, as the Chief Executive of a charity, you report to a Board of Trustees. Trustees have the power to fire you if they believe that you are not the right person for the job or you're not doing it in the right way. As the founder of a charity you must decide whether you would like to sit on the Board of Trustees, meaning you won’t get paid or run the operational side of the charity yourself or whether you would like to work for the charity and risk the potential of the trustees deciding that you're not the right person for the job.
It’s not easy but it can be done
Setting up a charity can be a difficult process. You need to recruit a committed and knowledgeable Board of Trustees, make sure you are complying with all the relevant laws and regulations, find a way to fund your activities and, of course, make sure you are delivering a public benefit. It isn’t a decision that should be taken lightly. Think about your motives and other ways that you may be able to help. If setting up a new charity still feels like the right thing to do, then GO FOR IT; I can’t wait to see how you help change the world.