How to Set Up a Charity UK: Step-by-Step Guide

Overview

A charity is an organisation set up exclusively for purposes the law recognises as charitable, and which operates for the public benefit rather than for private gain. In England and Wales, charitable status is governed primarily by the Charities Act 2011, and most registered charities fall under the oversight of the Charity Commission.

The legal definition of a charitable purpose is tighter than many people expect. It covers areas such as relieving poverty, advancing education, advancing religion, protecting health, promoting human rights, protecting the environment, advancing the arts, and a handful of other recognised heads.

Every charity must also show that its work delivers a genuine public benefit. Charity status brings useful benefits, including tax reliefs, the ability to claim Gift Aid on eligible donations, and credibility when approaching funders. It also brings duties: trustees must act in the charity's best interests, file annual information, and follow the rules set out in their governing document. Getting the setup right at the start saves a great deal of difficulty later on.

Key steps

1. Test whether a new charity is really needed. Spend time researching what already exists in your cause area. If another organisation is doing similar work, you may achieve more by partnering with them, volunteering, or fundraising for them than by building something from scratch. A new charity only makes sense if there is a genuine gap you can fill. 2. Choose your legal structure. The four common options are the charitable incorporated organisation (CIO), the charitable company limited by guarantee, the unincorporated association, and the trust. Incorporated structures give trustees limited liability and can hold property in the charity's own name, while unincorporated forms are simpler but expose trustees personally. Pick based on your scale, activities, and appetite for risk. 3. Draft your charitable purposes and governing document. Your objects clause must describe purposes that fall within the recognised heads of charity and show public benefit. The governing document, which is a constitution, trust deed, or articles depending on structure, sets out how the charity is run, how trustees are appointed, and how decisions are made. This document will shape everything that follows, so take time over it. 4. Appoint your trustees. You normally need at least three trustees, and they must be willing to accept the legal duties of the role. Trustees are responsible for the charity's strategy, finances, and compliance. Check that candidates are not disqualified under the rules and that between them they bring the skills, independence, and judgement the charity will need. 5. Register with the Charity Commission where required. In England and Wales, charities with annual income above the registration threshold generally must register with the Charity Commission, and CIOs must register regardless of income. You will need to submit your governing document, trustee details, proof of income or funding, and an explanation of how your activities deliver public benefit. Once registered, you take on ongoing reporting duties.

Common questions