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How to set up a registered charity - the charity formation checklist

Setting up your own charity is an incredible thing to do. It’s a great way to transform your philanthropic vision into a real, tangible difference to the lives of the communities around you. It’s also an opportunity to bring like-minded people together to provide advocacy on the issues that are important to you and can offer access to funding and benefits that make delivering your charitable activities more achievable.

That said, the charity formation process can seem daunting at first, and there may be obstacles to overcome along the way. In our experience, although the process might be challenging, the feeling that comes from seeing your charitable endeavours come to fruition makes it all worthwhile in the end!

Katy Baker, Director of Special Projects

This guidance is written by Director of Special Projects and experienced charity consultant, Katy Baker, and is designed to help those considering embarking on their own charity formation journey to decide the best course of action for their organisation and aims.











Is setting up a charity the right option for you?

This is not to discourage you from setting up a charity, but it is worth considering if charity formation is the best option for your specific situation. Some of the key reasons individuals and organisations consider this route are:

1. You have a philanthropic idea that aims to help others or further a cause.

2. You are already carrying out charitable activities or fundraising which you think could be a better fit for a charity.

3. As a company, you are looking to maximise your CSR or ESG activities.


If you have a great idea for an impactful project or how to address an unmet need, make sure you do your research into other charities delivering similar activities. You may find that there are great local/regional/national charities already offering something similar, or an existing organisation who might be well-place to deliver your idea. There are almost 170,000 charities in the UK, and chances are at least one will be open to working with you to test your idea! Equally, if you feel driven to fundraise for a specific cause, see if there is an existing charity which you could support – many are struggling to generate enough income to meet their aims, and your passion, energy and skills could be hugely appreciated.


If you are already delivering great work, it’s worth sense-checking whether you really need a charity to deliver your charitable activities. If you are an individual or a company who is already making an impact for the issue you are passionate about, then this may continue to work for you! For many, the motivation to form a charity comes from access to benefits such as GiftAid and funding from grant-making bodies who tend not to support traditional company structures. However, it’s worthwhile exploring whether there are existing charities who may be interested in partnering with you to increase the impact of your project by accessing wider fundraising opportunities.

If you are a company who is passionate about community impact, you may feel that you will make a greater difference via a charitable vehicle. Our advice would be to consider the points above – could you partner with another charitable organisation who are better placed to deliver this, and would undoubtedly appreciate the input of your commitment, skills and resources?


There are, of course, many companies that have charitable foundations or connected charitable vehicles which make a huge impact! But it is worth considering whether this is the best option for your company. The Charity Commission treats charities connected to companies robustly, and you may need to jump through additional hoops to prove that the charity has been set up for genuine reasons and is a truly independent entity.


Which charity vehicle is right for you?


Once you have identified that setting up a charity is the right course of action, then you need to decide which type of vehicle is most suited to you. There are many charitable and socially focussed structures you could choose, but most common are:

  • Charitable Company (LTD by Guarantee)

  • Charitable Incorporated Organisation

  • Charitable Trust

Charitable Company (LTD by Guarantee):


This is one of the most common forms of charitable vehicle. Charitable companies are limited by guarantees rather than shares. Meaning that the liability of any debts is limited to a nominal amount (usually £1) for its trustees. Charitable companies are registered both with The Charity Commission and Companies House, meaning double the reporting and compliance. Additionally, you will need to have £5000 raised prior to setting one up, and they have some restrictions on activities which sit outside of the core charitable objects (meaning that things like trading/selling goods can be difficult). A charitable company is a legal entity and allows you to employ staff, hold contracts and own land. You can also access many forms of income generation to support your impact such as tax benefits/Gift Aid and funding from grant-making bodies.


Charitable Incorporated Organisation (CIO):

A CIO is a newer form of charitable organisation which provides the same benefits as a charitable company. The difference between the two is that you don’t need £5000 in a bank account to register (you can register with £0!), and you are only regulated by the Charity Commission, reducing the amount of annual reporting required.


Charitable Trust:

A charitable trust is a registered charity usually set up to look after defined assets such as money or land. They are a good option if you would like to distribute funding from company profits or another source. A charitable trust may be suitable if you want to give regularly to several causes, if you want to give a reasonable amount as a one-off gift from time to time, or if you want to ask others to contribute to the trust’s funds.


How to set up a charity


Whichever type of vehicle you choose, you will need to choose your charitable purpose and objects, which dictate how your activities or fundraising are for the public benefit. The Charity Commission has a list of 12-predefined purposes which they expect most charities to fit within - they range from ‘The Prevention and Relief of Poverty’ through to ‘The Advancement of Animal Welfare’. It is not impossible to select a purpose which sits outside of their pre-defined list, but it will be more difficult to make the case to the Commission, and most new charities will find that these predefined purposes cover their intended charitable aims.


Once you have selected the purpose of your new charitable entity, The Charity Commission also provides example objects, which will form the basis for your governing document and sets out how you intend to deliver your charitable impact.


In our experience, you are best placed to stick as closely as possible to their example objects to avoid further questions and delays in the application process. However, it is sometimes not possible to find an example object which fits your intended activity directly, and you may wish to seek professional advice on how to draft objects which meet the criteria and desired language of The Charity Commission.


Helpfully, they also provide model governing documents for new charitable entities – as before, it is advised to stick as closely as you can to their template version to avoid prolonging the application process.


What else do you need?


Before embarking on a new charity application, you will need to choose a name and select your first trustees. Your charity name should be unique (you can search the charity register to find out whether it has already been taken!), and not include controversial phrases. Your first charity trustees will need to be independent from the founding individuals/organisation and be fully bought in to your charitable objects and aims.


You will then need to register on The Charity Commission's portal to start your application. The application will ask you lots of questions about your purpose, objects, your intended charitable activities, your trustees, how you will raise money, and how you will manage things like conflicts of interest and safeguarding. The process can take a couple of weeks to complete, and the questions change depending on your intended activity. It is entirely possible for a founder or founding organisation to complete independently, but many choose to enlist the support of an external solicitor or consultant like Oaks who has gone through the process before.


If you are a company setting up a connected charity, there is additional information you will need to provide to evidence how the charity will remain independent and isn’t for the benefit of the company. In this circumstance, we would advise seeking external support.


Charity Formation Checklist:


Before you embark on your application you will need:

  • Your charity name.

  • Agreed purpose, objects, and draft governing document.

  • Personal details of your trustees (usually between 3-5 trustees in total to set up a charity, you can add more later).

  • Signed trustee declarations form (please note this can’t be an electronic signature).

  • Details of how you will deliver your objects (the kind of projects/services/grants you will provide).

  • Details of founding individuals/organisation.

  • Details of how you will manage safeguarding, conflicts of interest, grant-making (if relevant). You may want to provide example policies.

  • Details of where your income will come from.

Once you have applied:


The Charity Commission is perennially busy and often deals with more applications than they have capacity for. In certain cases, where the application is very straightforward, they can approve the application in as little as 48 hours – we have had a number which have gone through this quickly! However, the norm is for your application to join the queue to be reviewed by a caseworker, and this usually takes between 4-6 months, sometime longer.


At this point, don’t be alarmed if you receive further questions or in some cases, get your application rejected. The Charity Commission are very robust in their approval of new charities, but in most situations, they will work with you to answer any questions they have. But be warned, they often only give a short turn around to submit further information – usually only a couple of weeks, so ensure you check your emails often!


Once you’ve replied and submitted any additional information, they will usually come back to you with a decision, or a request for further information, within a matter of weeks.

What to do if your application is rejected:

Sometimes, The Charity Commission rejects an application. This might be because they don’t see the public benefit of what you are trying to achieve and, in this case, you will need to revisit your charitable ambitions with your trustees to understand why it might be viewed in this way. Often, it is because the wording of your objects, chosen purpose and/or governing document don’t meet their expectations. They should, however, give you clear feedback on what they’re dissatisfied with to help you to re-submit your application.

The Commission also have an appeals process if you feel that your application has been rejected unfairly. So, a rejection isn’t necessarily the end of the road, there are several options for re-submission or appeal, but you may need to be resilient!

Ultimately, the charity formation process is unique to the individual. Where one application may fly through in a week, another may need multiple rounds of reviews over several months before it is successful. Where possible, use the templates provided by The Charity Commission (that’s what they’re there for!) and provide as much information as possible to help them understand who you are and what you’re about.

If you’d like support with setting up a charity, we are here to help. Our consultancy team has successfully registered charities of every shape, size and purpose for individuals and organisations across the UK. Get in touch with us at info@oaksconsultancy.co.uk to find out more.

For all media enquiries, contact tilly@oaksconsultancy.co.uk

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