What Is An Unincorporated Association, Small Charity, Club Or Community Group?

The term used by the Charity Commission is unincorporated association, but is often referred to as a small charity, club, or community group.  Essentially, a small non profit, almost always run by volunteers, which has not been registered (incorporarated) with the Charity Commission, or other regulator.  It has limitations, but is extremely quick and simple to set up.  For many it may well be a better choice than registering your charity.  There are an estimated 100,000 in the UK - that's about a quarter of the entire charity sector.   

The Benefits Of Setting Up An Unincorporated Association

Setting up an unincorportaed asssociation takes about half an hour and costs absolutley nothing.  All you need is a consitution and 3 people to act as your trustees.  Once set up, you can open a bank account, which will enable you to begin applying to funders and you can aslo register with HMRC to claim Gift Aid.     

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Limitations In Setting Up An Unincorporated Association

Registered charities are incorporated. That's important, because if something goes wrong they have limited liability. For an unincorporated association, when you enter into a contract or agreement, it is with you, not your community group. If you were to be sued, it would be you, not the community group.

The risk of that may be very low, so not an issue. However, you should consider any risks that, whilst extremely unlikely, could have major implications. For example, a lease on premises, employing staff or involvement in risky activities, such as a bungee jumping fundraiser. You should consider taking out charity insurance, or maybe reviewing your personal insurance, so that you have adequate cover, just in case.

If your annual income exceeds £5000 a year, you are required to register with the Charity Commission.

When Setting Up An Unincorporated Association May Be The Best Choice

In my experience, almost everyone wants to set up a registered charity.  It has major advantages - it provides limited liability and there's no question that it's the best in terms of fundraising.  However, you probably want to get started as soon as possible on your charitable work, so do you really need all the time and cost of registering a charity?  And having done so, possibly finding out that an unincorporated association or CIC might have been a better choice?  

Unincorporated associations and community groups can be a great choice. Here are some things to think about to help you decide. We:

• Want to set ourselves up very quickly, with the minimum of administrative work.
• Don't have the funding/capacity to set up a registered charity or CIC.
• Are likely to remain small, with income under £5000 a year.
• Are just setting out and aren't sure where this will end up. 
• Won't be entering into contracts or agreements or undertaking activities that would pose an unacceptable level of risk to ourselves personally.

If risk is an issue for you, you could consider setting up a private company limited by guarantee with Companies House. 

How To Set Up An Unincorporated Association

Setting up your unincorporated association or community group is really quick and easy.  All you need is:

• A name - I think that something short that perhaps relates to your work and appeals to people works best. 
• Google you name to make sure there aren't similarly names organisation locally, as you don't want to be confused with someone else. 
• If you may wish to register, pick a name that isn't the same as an existing registered charity.  
• A constitution with charitable objects - this includes your name, what you will do (objects - see below) and how you will run your charity. 
• The Charity Commission has a template you can simply fill in. 
• Click here and scroll down to the Model Constitution for a Small Charity (Word Version).
• Three trustees - you must be at least 16 years old and there are a few other limitations, but almost anyone can be a trustee.
• If 2 of your trustees are closely related, or business associates, you will need at least 4, as there must be a minimum of 2 independent trustees.

Once you've done that, you're an unincorporated association.  You can open a free bank account and apply for funding.  Not all grant makers will consider you and terminology varies, so look for community group, constituted group, micro charity, grass roots group, or similar.  The Lottery Awards for All fund is a very good one to start with.   

 

Setting Up - Charitable Purposes And Objects

The Charities Act has 13 charitable purposes.  Your objects are the work your charity does and must fall within one or more of these.  A good way to approach this is to imagine a year or 2 in the future when you will be achieving everything you realistically hope to do.  What difference will you have made? That is your charitable purpose. 

Next, ask yourself:

• Who are our beneficiaries?
• People living in poverty, or young people aged 15 to 25.
• Where will we be doing this?
• Aston Clinton Village (where I live) or Africa.
• How will we be doing this?
• By making grants, providing goods or services, advocacy, raising public awareness or something else.

I'm not being strictly correct, but a charitable object basically = our purpose + how we do that + who we do that for + where we do that.  Fundraising is very important, but is not in itself a charitable purpose.

You can have more than one object, but I try to limit the number and keep these short and clear.   The Charity Commission provides a range of example charitable objects that you could use or modify to suit your needs.  Alternatively, search for a similar charity to yours on the Charity Commission register and use or amend theirs. 

   

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This Resource Is Not Professional Opinion

I've been a volunteer for 40+ years, worked at senior management level (including various chair and CEO appointments) and led numerous non profit start-ups.  However, I am neither a lawyer, not an accountant, so not able to offer professional opinion and what you might need depends on your particular circumstances.  It is for you to decide if you need professional advice and, if you do, to seek it, because I cannot provide it.  You'll find links to pro bono providers on the Free Goods and Services page if you do.