What makes a charity

UK We use some essential cookies to make this website work. Accept additional cookies Reject additional cookies View cookies. Hide this message. Part of Set up a charity: step by step. Guidance overview: What makes a charity CC4. Flowchart: how the law decides what is a charitable purpose Ref: Flowchart: how the law decides what is a charitable purpose PDF , Step 1 : Check if setting up a charity is right for you.

Check the alternatives to setting up a charity. You are currently viewing: Check if your organisation can be a charity. Step 2 : Find trustees. Check who's eligible to be a trustee and what skills they need to have Find and appoint trustees Read about your trustees' legal responsibilities. Step 3 : Find out how to choose a charity structure. Choose the right charity structure. There are rules on what words you can use in your name.

Check what you can call your charity You cannot register a name that's the same as or similar to another charity. Check the names of registered charities. Legal requirement: where any of the terms used in the descriptions of purposes has a particular meaning in charity law in England and Wales, the term must be taken as having the same meaning where it appears in the descriptions of purposes. For more on what each of these descriptions mean, and the sorts of purposes that fall within them, see:.

It may be possible for your charity to adopt as its purpose the wording used in one of the descriptions of purposes where that wording makes it clear:. In some cases, the wording used in the descriptions of purposes can have more than one meaning, and not all of those meanings are purposes that the law has recognised as charitable or as capable of being for the public benefit.

Sometimes it is not obvious whether a purpose does or does not fall within the descriptions of purposes, for example where a purpose may be new or novel. For guidance on the public benefit requirement including the different rules for poverty charities see: Public benefit: the public benefit requirement PB1.

That means that the court must have the power to make decisions about the administration and purposes of your organisation as a charity. Legal requirement: to be a charity, an organisation must be independent of outside control in a way that would prevent it being subject to the control of the High Court. This part provides links to other guidance which you may find of interest in relation to this guide. This analysis of the law may be of interest to charity trustees who wish to know more about the legal basis of our guidance.

This publication gives guidance on the legal and regulatory framework for charities wishing to engage in campaigning and political activity. The following terms are used in this guide, and should be understood as having the specific meanings given below:.

Charity trustees: the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. Charity trustees are responsible for the general control and management of the administration of a charity. It may be a trust deed, constitution, articles of association, will, conveyance, Royal Charter, scheme of the Charity Commission, or other formal document.

High Court: the principal civil court of unlimited civil jurisdiction in England and Wales. However, not all charities have a governing document with an objects clause.

This has to be demonstrated in each case. The courts: we use this term to mean, collectively, the Tribunal, the Upper Tribunal and the courts. It may also carry out non-political campaigning activities if this clearly is a means of furthering its charitable purposes. That means any purpose, whether in this country or overseas, that is aimed at:.

The process for deciding whether an organisation has a political purpose is no different from the process generally used to decide whether any organisation does or does not have charitable purposes. We need to consider a range of features when deciding whether or not an organisation is carrying out political activity to further a charitable purpose, or has a political purpose.

Another important factor in determining effectiveness involves cost. Consider two charities, both of which have a goal to save at least 1, lives annually. At the end of the year they evaluate their results, and both charities met their goal. That makes Charity B 10 times more cost-effective than Charity A: it achieved the same results at one-tenth of the cost.

To put it an-other way, a donation to Charity B would likely help more people than the same donation to Charity A. Cost effectiveness is a key component of overall effectiveness, and plays an important role in making comparisons between charities. The Life You Can Save uses data on cost effectiveness, backed by research, independent verification, and other evidence, to identify its recommended charities.

If we consider only cost effectiveness, charities that use proven, efficient, high-impact interventions, whose impacts can be measured and directly attributed, will rise to the top. Charities working on longer-term issues, whose efforts may not deliver significant benefits for many years, also suffer in comparison when only cost and near-term impact are considered. What else can we use to tell whether a charity is effective?

Factors such as a proven track record, transparency, sustainability, rigorous monitoring and evaluation, skill and experience in leveraging funding and strategic partnerships, broad reach and potential for scale, and the ability to generate a wide range of benefits e. These indicators may be more difficult to measure, but they are important factors to consider in evaluating effectiveness.