Sunday, November 26, 2006

Charity Facts: What is a charity?

A charity is a particular type of voluntary organisation – one that takes a distinctive legal form and has a special tax status. In the UK today there are probably over 500,000 voluntary organisations – fewer than 200,000 of these are registered charities.

Charities can be organised in a number of different ways – they can be an unincorporated association, a trust or a company limited by guarantee. Each of these has a different governance structure – for example, a charity that is formed as a registered company will be governed by a board of directors, a charity that is set up as a trust will be governed by a board of trustees.

Every charity has to have a governing document that sets out the charity's objects and how it is to be administered.

To register as a charity, an organisation must have purposes that are defined under law as charitable. These include the relief of financial hardship, the advancement of education, the advancement of religion and other purposes that benefit the community.Once registered, charities have to obey a number of rules, which include regulations covering trustees, accounts, finances and management. Those that are registered as companies have to comply with company law too.

A registered charity is not allowed to have political objectives or take part in political lobbying other than in a generally educational sense.

Are set up for a charitable purpose
Are not profit-making – so any surplus they may make must be used only to further the organisation's purposes
Are independent – that is, they are not a part of any governing department, local authority or any other statutory bodies

Advantages of becoming a charity:

Tax relief on:
Income tax (on gifts given)
Corporation tax
Stamp duty
Capital gains tax
Inheritance tax

Plus increased public support as the organisation is more likely to be viewed as legitimate and worthy.

Disadvantages of becoming a charity:

Charity law imposes high standards of regulation and bureaucracy.
Trading, political and campaigning activities are restricted.

For more go to

Sunday, November 12, 2006

Trustee skills gaps

According to research commissioned for 'Make every move count' the Governance Hub's education awareness campaign, only 6% of charity trustees feel that they are fully equipped for their role.

Some of the other findings are as follows:

80% of trustees take on their role to contribute towards a good cause, yet 94% feel they do not have the relevant skills, which of course makes further training and development absolutely essential.

The main skills gaps were identified as charity law and compliance (cited by 45% of trustees) governance (41%) fundraising (41%) marketing and communications (41%).

Over two thirds of trustees surveyed identified time constraints as the biggest obstacle to improving governance with two fifths of organisations claiming not to have any budget for governance support. Only 46% of trustees have had a formal induction and 22% are working as a trustee without a formal role description!

For details of funding available to support trustee training and development initiatives email

Friday, November 10, 2006

What's happening to the sector?

As we know from the feedback we get from learners studying with us for the BTEC Professional Certificate in Voluntary Sector Management, there is a growing sense that the sector is at a crossroads, with the government reform of public services, the changing funding enironment, greater emphasis on skills and competencies at all levels, and recognition that more than ever before, all charities need to develop a more 'business-like' approach in their processes and behaviours.

These views are reflected in the Directory of Social Change November Quick Survey.

By it's own definition, DSC has been "on its high horse recently" over a few important developments in the world of the ‘voluntary’ sector, including the government’s push for greater sector involvement in delivering public services, the Treasury’s recent review of our ‘role’ (shouldn’t we have been reviewing them? claim DSC) and the decision by the Charity Commission to allow trustees to be paid.

As DSC ask, 'Are the government and other bodies, by their recent actions, fundamentally altering the ‘voluntary’ spirit of our sector?'

You can take part in an online survey at DSC ( with the results due to be published next month.