If you are thinking about setting up a charity here are a number of things to consider…

Existing charities

Before you go to the trouble of establishing a new charity, consider what you’re planning to achieve and think about whether there is an existing charity that already does what your proposed charity will do. Are you able to assist, donate to, or partner with that charity, rather than establishing your own? Some people like to establish their own charity because it gives them autonomy, profile and an ability to focus on their particular objective, whereas others may prefer to work as part of a larger team, be a silent funder or remain anonymous.

Registering as a charity

After establishing your charity, it is a good idea to register with Charities Services and become a “registered charity”. There are several benefits of registering your charitable organisation, including being exempt from paying tax.

Purpose

Charities Services will look closely at your organisation’s purpose when considering your application for registration, so it is important that your purposes are charitable.  A charitable purpose can relate to:

  1. The relief of poverty;
  2. The advancement of education or religion; or
  3. Any other matter beneficial to the community.

Your legal adviser will be able to assist with determining whether your purpose is “charitable” or not.

Rules

To register as a charity, your organisation needs to have a set of rules. Your rules should include:

  • The purposes of your charity;
  • Who the trustees (or other officers) will be and how they are appointed;
  • A statement that your organisation is not carried on for private financial benefit or profit to an individual;
  • What will happen with the money and assets of your charity if it ceases to operate or “winds up”; and
  • How the rules can be amended.

Structure

You should think about what sort of structure your charity will have. For example, it may be preferable to establish a corporate body such as a charitable trust or an incorporated society, compared to an unregistered trust or society. If an organisation is a corporate body it is able to fund-raise, borrow money, own property, employ staff, or enter into contracts in its own right. On the other hand, organisations that are not “incorporated”, such as a trust, act in the names of the individual trustees. This can raise liability issues for the individual trustees involved and can also create administration hassles when trustees retire and new trustees are appointed.