You might have seen that at the tail end of last year, I shared some lovely news about three organisations I’ve been supporting that successfully became registered charities. I thought it might be good to give some insight into the processes these organisations went through and share some hints and tips for making a successful application.

Make sure it’s the right thing for you to do

One of the first pieces of guidance the Charity Commission gives to anyone thinking of setting up a charity is to encourage you to consider whether setting up a new charity is the right thing to do.

It’s not that anyone’s trying to put you off doing it! It’s good to remember that there are more than 160,000 registered charities in England and Wales and many more small, unregistered ones, not to mention other voluntary and community groups, social enterprises and community projects that are all around us.

Although your impulse might be to set up something yourself, you might be better off working with existing organisations and projects, where you can dive right in and make a difference, without having to identify and bring on board trustees and set up new rules, processes and procedures. If paperwork’s not your thing, then working with something that’s already up and running could be a more attractive prospect. And in a climate in which charities may have to think very clearly about their sustainability, consider downsizing, merging or closing, duplication won’t help anyone. It might be better to offer your skills and time to an organisation that would welcome the extra support.

Then make even more sure! Learn about what being a charity would mean

Many people have an idea of what charity means; though I think it’s fair to say that there’s room for improving people’s perceptions. NCVO (the National Council of Voluntary Organisations) has recently launched a test website that aims to improve people’s knowledge of how charities work. It’s a very visual tool that feels more accessible than anything that’s come before, and it feels measured and impartial compared to many opinion-pieces that you can easily find when trying to search for generic information about charities. So, this tool will become another first learning guide I’d recommend to anyone starting their charity journey.

Being a charity doesn’t suit every voluntary and community organisation – for a range of reasons – and that’s ok. So when I support people with starting a charity, I encourage them to learn as much as they can about what it’ll involve. It’s important for people to understand what their legal responsibilities will be and for them to be satisfied that the way they hope their organisation will run is capable of being charitable.

So make sure you will be able to fulfil the following:

• Not for private profit or benefit: Charities are led by trustees, who are normally unpaid volunteers. There are rules about payment to trustees and people or businesses related to trustees. Generally, these payments can only be made where they’re authorised. Additionally, charities are asset-locked organisations. This means that the income they raise, can only be used to achieve their charitable purposes and that if the charity closed, any money or property left over would be used according to the purposes – usually by transfer to a similar charity. Surplus or profits can’t be distributed as a private benefit to members.
• Exclusively charitable purposes: Purposes are the reasons an organisation exists. To be a charity, you have to show that you are set up in a way that is recognised as charitable and for public benefit. On top of that, purposes can’t be political in nature.
• Limits on trade: Charities need to follow rules on trading which can be quite complex. Think about how you’ll be raising an income for your organisation and if some of that will include selling products or services, read up on the rules.
• Being open and transparent: Charities shouldn’t be closed or serve narrow interests. Part of this is about how you operate and part of it is about how you are perceived. As a minimum, you’ll have to keep your charity’s entry on the public register up to date. I would also recommend making sure that your charity is accessible, that your board of trustees reflects society in all its diversity, that your decision-making is justified, and that you openly share your work, successes and learning. This will help your charity’s reputation.

As well as discussing these things with anyone interested in setting up a charity, I recommend a ‘getting started’ reading list that contains some of the Charity Commission’s guidance, including:

• How to set up a charity
• What makes a charity
• Public benefit

If, after finding out more, setting up a charity isn’t right for your organisation, you might want to consider setting up a non-charitable voluntary organisation, community group or social enterprise – and you’d still be able to get some support from Dudley CVS to do any of those things!

Don’t rush

A bit like writing a successful funding application, the best way to set up your charity successfully is by putting in some work beforehand. It’s really worth doing some planning at the start which might save you time and energy in the long-run.

It can be quite tempting to get ‘off-the-shelf’ paperwork and to rush into setting up. In my experience, learning about the different options you have before you commit, and taking your team with you, will benefit your organisation in the long run; it’ll also prevent you from making mistakes which might be time-consuming to correct.

I’ve often taken teams through the next few points over a series of discussions, workshops and chats, and find that it helps teams and new trustees to develop and understand their organisation collectively, and ultimately make a successful application…

Build a team to build your vision

I don’t think I’d ever recommend trying to start a charity on your own. For one thing, you will need a number of trustees to lead the organisation; for another, there’s a lot to do!

You might be the person with a clear vision of what you want to do and achieve; try to be open about what others could bring to this. I would really encourage you to build a team which can contribute to a shared vision, because people are more likely to get behind something that’s been agreed collectively. This might involve networking, visiting other organisations and putting the word out about what you would like to do.

Once you’ve got a group of people, come together to think about what a successful organisation would look like. What work would you be doing? Who would be involved? What differences would you be making? Writing your ideas down will definitely help you to form your charitable purposes later on.

When I worked with Woodside Crafts and Dudley Deaf Theatre, I led them through some discussions that helped them agree what their organisations were all about. Hawbush Community Gardens had gone through a similar process themselves and by learning from similar organsiations that had become charities. What resulted for all of them were teams that believed in their organisations and who were ready to progress.

Get your structure right

Agreeing what kinds of work your organisation will do and how its done, will help you to get you set up appropriately. Some charities need the protection of being ‘incorporated’ organisations. Incorporated organisations have their own legal identity and can employ staff, hold contracts and property in the name of the organisation which limits the liability of the organisation’s members should they be unable to fulfil their contractual obligations.

Generally, I’d suggest that any organisation thinking of employing staff, holding property or delivering contracts should become an incorporated organisation. Two of the three organisations I supported recently chose incorporated structures – I supported one to become a company limited by guarantee and the other to become a charitable incorporated organsiation (CIO) and helped them to understand the additional obligations they would have. The third charity decided to set up as an unincorporated association because they felt that they would not have the liabilities that the other two would have.

Develop your paperwork

Charities require a set of rules called a governing document, which sets out how they run. The type of governing document charities have depends on their structure. Once you know what structure your charity will have, you will know what type of governing document you need.

The Charity Commission provides model governing documents for each structure. The benefit of starting with the model means that you can be sure that it contains all the provisions it needs to have on charity law. Some national charities also provide model governing documents for their branches or affiliates. The models also have some useful notes in the margins to help you to understand it.

What won’t be contained in the Charity Commission’s model governing document is charitable purposes, which you’ll need to develop. Use your agreed vision as a starting point and try to place your organisation in at least one of the descriptions of charitable purposes. You can also look at some example purposes provided by the Charity Commission and its guidance on how to write objects – I’d also be happy to help with this and to talk your team through the governing document so that you’re all comfortable with it.

The application process

Hopefully, all the work you’ll have done up to this point will put you in a good position to express your charity’s work clearly.

NB. if you choose to become a company limited by guarantee, you will need to apply to Companies House to incorporate your organisation, completing form IN01 and sending that with your agreed governing document (memorandum and articles of association). Once incorporated, you can begin the process of applying for charity status.

Applications to the Charity Commission are all done online. Although you can’t see an example application form before you start (because some of your answers might trigger additional questions), you can register for an account, move around the application form and save your progress as you go. You have three months from each time you sign in and save your progress before your application is automatically deleted. When I guide groups through the application, it usually takes two or three meetings, but you can break it up into as many bite-sized chunks as you like.

The Charity Commission will assess your application based on whether your organisations objects are capable of being charitable (and borne out by your activities) and whether you are for ‘public benefit’. You will be asked about:

• Your purposes – what you want to achieve
• Your activities – the work you will do to achieve your purposes
• Beneficiaries – the people you want to support and any characteristics they may have
• The differences your work will make to people’s lives
• Any risks associated with your work and how you will mitigate them

My biggest tip is to make sure your purposes, activities, beneficiaries and difference you want to make are all linked. Make sure it is clear how the activities you do are linked to your purposes; make sure those activities are capable of making differences to the lives of the people you support. If you can show how all these link, your application should be clear.

Other things you need to include in your application:

• Your completed, signed and dated governing document
• Details of your trustees (who should also sign and date the trustee declaration form that you will also need to attach)
• Financial information: such as how much income you expect to have in the current year and last year’s accounts. Sometimes bank statements can be helpful too.
• Attaching your organisation’s plan is optional, but it can help.

Once you’ve submitted your application, you’ll get an email to confirm the Charity Commission has received it. Your application will be assigned to someone at the Commission who will review it. They’ll either:

• Reject your applications, giving reasons
• Ask you further questions or register your charity on condition of your trustees following certain instructions
• Register your charity

Take a look at the Charity Commission guidance on how to register a charity for more information.

Consider some training

Of course, registering as a charity is only the start. Once registered, you’ll need to make sure that you’re operating properly, and that you keep your entry on the register of charities up to date.

Consider getting the skills you need to run a great charity that has an impact. We can give training on areas like:

• Roles and responsibilities of trustees
• Planning
• Financial management
• Volunteer recruitment, management and volunteers and the law

And organisations such as NCVO and DSC offer lots of courses as well as some great online resources.

We’re always learning, so be open to learning new skills or brushing up on the ones you already have!

That’s it!

I really hope that sharing some of the things I’ve learned over the years has been helpful to anyone considering embarking on this journey and that I’ve given you at least a few pointers and links to some good guidance out there.

If you’ve anything to add that may help people, or know any useful guidance, then please feel free to share it in the comments.

And if you’re looking to start a charity in Dudley borough, or would like to connect or be introduced to any of our many great charities and groups, do get in touch.