5 mins read
The law defines whether an organisation is a charity. If your group’s aims are exclusively charitable, and it exists for public benefit, then it is a charity in the eyes of the law.
A charity therefore is an organisation that both:
- Exists for the public benefit (as defined by law).
- Has exclusively charitable purposes (as defined by law).
The Charities Act 2011 outlines 13 areas that may be classed as charitable. Your forum’s aims and objectives will need to fall into one of these if you wish to register as a charity. You cannot have objectives that are charitable and others that are not.
Advantages and disadvantages
There are some advantages to becoming a charity, which can include:
- Income tax relief.
- Not needing to pay Corporation Tax on profits (restrictions apply).
- relief on business rates (check local council arrangements for rates).
- VAT concessions (check HMRC for up to date information).
- Funding benefits as some funders will only fund organisations that are registered charities.
- become eligible for schemes such as Gift Aid.
There are also some disadvantages which can include:
- Charities cannot change their objectives or parts of their governing documents without consulting the Charity Commission.
- A charity must submit annual returns and accounts to the Charity Commission if income is above £10,000.
- Will potentially take longer to set up than other legal structures.
- Charities have some restrictions on what they can do. See Political activity and campaigning by charities for more information.
Charities have limitations on their ability to trade, including entering into business contracts to deliver services. For example, sign an agreement where the local authority pays the forum to provide a service, such as training staff or running consultations events (find further advice on this through the Community Matters).
Setting up a charity
To apply to become a charity, you will need to recruit trustees. This process will include writing a role description and person specification which outlines the skills, knowledge and experience required. You will also need to check applicants’ eligibility and ensure they understand their legal responsibilities.
Trustees have overall control of a charity. They are responsible for making sure it’s doing what it was set up to do. In some forums, the members of the steering group involved in running the forum are the trustees. Trustees are volunteers and cannot be paid for their work as a trustee. For more information, visit the Charity Commission guidance.
Who will take on the role of a trustee is a key decision you will need to consider if the forum becomes a charity. There are restrictions on who can become a trustee, so you will need to consider these. Other forums have appointed trustees who are not parent carers of disabled children or involved in the day to day running of the forum. This can be a useful way of bringing in people with additional expertise to advise on running the forum, for example someone with business management or fundraising expertise.
However, this approach would mean additional work for the forum management committee in writing reports for and attending trustee meetings. It is also possible that the trustees might sometimes have different priorities than the steering group. You will need to consider how you ensure the decisions are made by parent carers of children and young people with Special Educational Needs and Disabilities (SEND) in line with the DFE Participation grant terms.
Trustees also have legal duties which they will need to fulfil, such as:
- Ensure your charity is carrying out its purposes for the public benefit.
- Comply with your charity’s governing document and the law.
- Manage your charity’s resources responsibly.
- Act with reasonable care and skill.
- Ensure your charity is accountable.
It would be worth reading the document The essential trustee: what you need to know, what you need to do – GOV.UK (www.gov.uk) as this outlines the relevant information for trustees. The Charity Commission has made a series of 5 minute guides for trustees.
Making a governance document and registration
As with any structure you pick, you will need to have a governance document. There is advice and model templates on the gov.uk website to help you to write this for a charity. You will need to consider how you ensure parent carers of children and young people with Special Educational Needs and Disabilities (SEND) are involved in line with the DFE Participation grant terms.
Once you have completed these steps, you will then need to apply for registration. You can do this online. The Charity Commission provides guidance on how to set up a charity, which you may want to review before registering.
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