REGISTERING AS A CHARITY - PROs & CONs

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Charity registration

If you have an local environmental educational group or project which was set up for charitable purposes (i.e. for the benefit of others) it is considered to have 'charitable status' whether or not it is formally registered as a charity.  However, if your group now has an annual income of £1,000 or more then you need to go ahead and become a  registered charity. If your group has an annual income of less than £1,000 you can apply for voluntary registration, although this may be refused.  Think carefully at this point: there are pros and cons of registration.

There are several issues which you need to consider before you make a decision. It often comes down to the trade off between ongoing bureaucracy versus lack of status (with potential donors and suppliers).

Advantages of registration

Relief from income tax for income derived from investments (e.g. property, shares, and securities) where the income is applied for charitable purposes.  You will become eligible for schemes such as Gift Aid and payroll giving (GAYE).  Both of these enable the group to claim the tax on donations from tax payers. The

value of such schemes will vary with income tax rates.

Many charitable trusts and foundations as well as some businesses and corporations will only give to registered charities.  The public perceives registered charities as being more credible than organisations

which are not registered. This may assist you in fundraising.

Disadvantages of registration

Once registered the group will be required to complete more paperwork. You will need to send annual updates to the Charity Commission. Most groups will also be required to hold Annual General Meetings.

Charity trustees may not generally benefit personally, whether through receipt of a salary or of profits or otherwise.

Trustees can be held personally liable for misuse of funds. The objects of a charity must be exclusively charitable. They cannot, except in certain circumstances, carry out or fund activities or undertake permanent trading which falls outside those objects.  You will need a membership system for the group which people will have to actively sign up to.

Trustees

Prior to registering as a charity you will need to select a board of trustees. These are the people who are responsible for applying the constitution in order to manage the organisation. In some organisations  trustees may be called committee members, governors, directors or some other title. You do not need a huge number of trustees but should have a Chair, Secretary and Treasurer. Remember that other members of the group can be active in taking on tasks involved in running the group without being a trustee. Keeping the number small will help in maintaining good communication and organising and paying for trustee meetings. For more information see the Contact a Family Group Action Pack guide Trustees.

Drawing up a constitution

Part of the application process is the formal adoption by the organisation, of a constitution, sometimes called a governing document. This sets out the aims and objectives of the charity, the structure and the rules which will control how it is run. It is a wide ranging document covering all the workings of the organisation including who can become a member, how many trustees there should be and procedures for meetings and voting.

Use of Max Energy draft constitution

Solarnavigator in association with Max Energy Ltd has agreed a draft constitution written for national environment or heritage support groups. This means the objects, powers and procedures are already written and the wording has been agreed by the Charity Commission in other cases. This can be used by groups and should make the registration process simpler and quicker.

At present Max Energy Ltd does not have a draft constitution agreed for local environment of heritage conservation groups.  However, the Charity Commission has some draft constitutions available through its website. These can be used by groups who will need to fill in the appropriate information.

Copies are available at www.charity-commission.gov.uk/registration/mgds.asp.

Once the committee has drawn up the constitution and agreed the finer details it will need to be 'adopted' at a committee meeting. This must be recorded in the minutes which will form part of the paperwork needed by the Charity Commission.

The next step is to write to the membership of the organisation, informing them of the plan to register as a charity and asking for their approval. You will need to let them know that copies of the constitution are available for them. When writing, many groups add a clause stating that failure to acknowledge the letter will be taken as indication of agreement to go ahead with registration.  Finally send all paperwork to the Charity Commission with:

the agreed constitution

completed application form

minutes of the committee meeting at which the constitution was adopted

evidence of the membership agreement

information about the group (leaflets or publications)

Further information about registration

In England and Wales the regulation and registration of charities is carried out by the Charity Commission. Further information about registration is available from the Commission. A useful publication is: CC21 Registering a Charity  www.charity-commission.gov.uk/publications/cc21.asp

If you do not have internet access phone the Commission for a free copy of this booklet.

Additionally useful guidelines on registration are available at: www.charity-commission.gov.uk/registration/CCREG.asp

How to apply for registration

Once you have made the decision that you either should, or would like to apply for registration as a charity you will need to contact the Charity Commission for an application pack.

For further information or to order a Registration Pack telephone: 0870 333 0123.

The number for deaf and speech impaired callers using a Minicom is: 0870 333 0125.

Groups in Scotland

The Scottish Charities Office can be contacted at:

25 Chambers Street

Edinburgh EH1 1LA

Tel: 0131 226 2626

Additional information is also available from:

The Scottish Council for Voluntary Organisations http://www.scvo.org.uk/

Working with Us http://www.workwithus.org/findus/

Groups in Northern Ireland

Department of Health and Social Services can be contacted at:

Voluntary Activity Unit

Charities Branch

Annex 3, Castle Building

Stormont Estate

Belfast BT4 3RA

Tel: 028 9052 2780

What happens once your organisation is registered

Once you have registered as a charity you will need to make sure that you meet the requirements of the Charity Commission. These become more bureaucratic as the income of the organisation increases. After registration the Charity Commission will write to the trustees to set out the requirements. For more information see the section on 'What Happens after Registration' in the Charity Commission publication CC21 - Registering a Charity (as above).

If your group does apply for registration please keep Contact a Family informed of progress, in particular do let us know your charity registration number when you receive it.  Good luck with your application!

This guide is part of the Contact a Family Group Action Pack. For more information please visit www.cafamily.org.uk or telephone 020 7608 8700.

Copying of the material within this guide is permitted. Please include a credit to Solarnavigator Environmental Support.  

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