How to start a charity

While starting a business often has the end goal of financial success for yourself, starting a charity puts others first.

Setting up a charity can be an incredibly rewarding experience, but it requires a strong work ethic and a desire to do good.

We hope the guide we’ve put together with six clear steps will help to get you started.

Need some inspiration? Listen to Ariana Alexander-Sefre’s journey and how her business is making a difference in men’s mental health on our Speaking of Startups podcast. 

Step 1. Research existing organisations

Just like when starting a business, the first step to setting up a charity is research. 

You need to be sure that there’s a need for the charity you want to create and that it’s not already out there.

Raising money for good causes will always be popular, but you need to research existing charities to determine if you can achieve what you aspire to.

For example, everybody would love to find a cure for cancer, but not everybody can. Don’t start claiming your charity will find a cure for cancer if your science experience only goes as far as GCSE Biology. You must be able to substantiate any claim you make with evidence or data that supports them. 

Think about what your charity can realistically achieve, what the gaps in the market are and who would be inclined to support your cause.

Step 2. Choose a name and mission statement

The next step in our how to start a charity checklist is to choose a name and write your mission statement.

Choosing a name for your charity is much like choosing and registering a name for your business.

You need to select something unique, easy to remember and that is a reflection of the work your charity will do and the causes it will support.

Some people choose to name their charity in memory of a loved one directly impacted by the cause the charity will champion. In contrast, others opt for something more commercial and memorable.

Check online to make sure your chosen name isn’t already in use by another charity first.

You’ll also need to write a mission statement. It should detail the services you provide, the vision for your organisation, and the charity’s core values. Your mission statement should be clear on what you want your charity to achieve and how you intend to do it.

Step 3. Find trustees

By law, you need to appoint at least one trustee before you can register your charity.

A trustee sits on a charity’s board and ensures it is fulfilling its aims and operating responsibility. Trustees are not usually paid.

In an ideal world, you would appoint three trustees for your charity, as per guidance from The Charity Commission, the government regulator of charities in England and Wales.

Many people who are wondering how to start a charity opt for a mixture of personal and professional connections as trustees.

Try to select trustees who can add something to the running and success of the organisation. For example, if you struggle to pitch and are worried about how you will attract donations, a trustee with sales experience could prove invaluable.

Step 4. Decide on a structure

A key part of how to start a charity in the UK is ensuring you have the right structure in place.

You can structure your charity in one of four ways:

Charitable company

This is one of the most common charity structures. It’s a limited liability company that is officially incorporated and registered with Companies House.

Pros and cons of a charitable company

Charitable incorporated organisation (CIO)

A CIO is the newest form of charity structure available and is regulated solely by The Charity Commission. 

Pros and cons of a CIO

Charitable trust

A trust is a simple and inexpensive way of setting up a charity. The charity is governed by a trust deed which can be flexible.

Pros and cons of a charitable trust

Unincorporated charitable organisation

Another straightforward and inexpensive way to set up a charity and a good option if you intend for your charity to stay small.

Pros and cons of an unincorporated charitable organisation

Step 5. Create a governing document

When you start a charity organisation in the UK, you’ll also need to create a governing document.

A governing document is much like a business plan and will publicly declare how your charity will be run and what rules your trustees and team will follow.

When it comes to writing your governing document, you’ll need to follow the official guidance from The Charity Commission. Failure to do so will result in you being unable to register your charity.

The Charity Commission states that the structure you choose for your charity will determine the type of governing document you need to provide.

• Charitable company: memorandum or articles of association
• Charitable incorporated organisation: association constitution or foundation constitution
• Charitable trust: deed or will
• Unincorporated charitable organisation: constitution 

The good news is that you can find templates for all of these documents on The Charity Commission website, making it super simple to create your own and get it right from Day One.

Your governing document will also need to clearly state your charity’s aims. These have to fall within one of the commission’s stated charitable aims such as “conservation of environment”.

Step 6. Register your charity

Now you’ve completed all of the above steps, it’s time to register your charity. 

If your charity generates more than £5,000 per year then you legally have to be registered with The Charity Commission. 

Before you can register, you’ll need to have completed all of the previous steps, such as choosing a name and appointing trustees.

It’s not just a legal requirement either, being a registered charity will add trust and legitimacy to your charitable brand, making it easier to attract donations. 

Who is suited to setting up a charity?

Setting up a charity takes time, hard work and resources. 

The most important thing to remember is that a charity has the aim of helping other people, not helping yourself.

If you’re looking for a way to make money then you would be better off setting up a business, not a charity. 

You also need to be dedicated to and passionate about your cause. If your heart isn’t in it, it’ll be clear, and you’ll struggle to get your charity off the ground and attract donors.

That being said, setting up a charity is incredibly rewarding and ideal for those who are willing to put their own financial aspirations aside to make a difference in the world.

If you’re unsure if setting up a charity is right for you, you could consider setting up a social enterprise instead.

Costs of setting up a charity 

Whilst The Charity Commission doesn’t charge a fee for registering a charity, there are costs that you’ll need to consider and budget for.

If you decide to set up an incorporated charity then there will be a Companies House fee which is usually around £50.

However, you can often keep your overheads pretty low, especially when starting out, as you may not need to splash out on premises or staff in the early stages.

You may want to seek legal advice to help you protect yourself and your trustees, plus it’s a good idea to pay for insurance too.

Once your charity is registered, you’ll also need to begin fundraising. Setting up a website and marketing your company can all be done in-house for free, but if you don’t have the skills or time required then you’ll need to pay an expert to help you.

Final thoughts

Setting up a charity is a rewarding endeavour, but it requires a lot of time and effort to ensure you’re legally and ethically compliant first.

You need to be willing to commit time, resources and money to making the process a success, and there’s little financial reward at the end. But people who set up charities aren’t usually in it for the money.

They do so to make the world a better place and make a difference to a cause close to their hearts.

If you’ve been wondering how to set up a charity then hopefully now you have the guidance and ideas needed to get started.

If you need more insight, listen to Ariana Alexander-Sefre’s journey on our Speaking of Startups podcast and how her business helps young men’s mental health through music and wellness tools.