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There are alternatives to setting up a UK charity, such as an FCA Registered Mutual Society (Community Benefit Society, Cooperative or Credit Union), an HMRC registered Community Amateur Sports Club (CASC), and a B Corp. This guide explains these alternatives, plus others, with links to more guidance on each.
Setting up and running a charity, can involve a lot of time, workload and cost, so here are some alternatives.
To access help and resources on anything to do with setting up a charity, CIC or any other type of non profit, visit our free online Start-Up Toolbox. We also have 3 online directories Funding Finder, Help Finder and Data Finder, Quality Mark and 60+ downloadable policies. Everything is free.
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The line between charities and private business is becoming more blurred and being an ethical company can have real commercial benefits, including improved customer perception and greater staff engagement. A B Corp is a business certified by the non‑profit B Lab for meeting high standards of social and environmental performance, transparency, and accountability. It’s well‑established in the US and growing in the UK, aiming to balance purpose and profit in how companies operate.
Our friends at Zeffy, who run the only free fundraising platform, are a B corp.
A registered charity ourselves, we provide 8 online health checks, the huge information hub, Quality Mark and 3 online directories. It works for any non profit, not just charities.
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This guide to charity and CICs is for general interest. I am not an accountant, nor a lawyer and no advice can be applicable to all organisations, in all circumstances, so this resource is no more than a guide to understanding. I've summarised the regulatory guidance and augmented this with my own experience and Internet research, but I am not competent to provide professional advice. I have included links to the source guidance to enable you to check this yourself and, if you think you might need professional advice, use Help Finder to find pro bono support.
There are numerous alternatives to setting up a charity. By far the most common is a CIC. A less common option is an FCA registered society, such as a Community Benefit Society, Co-operative or a Credit Union.
A CASC is not a legal structure as such, but allows local amateur sports clubs to register with HMRC and benefit from a range of tax reliefs, including Gift Aid.
The difference between a CASC and a charity, is that a charity has charitable status and registers with the Charity Commission and can register with HMRC, but a CASC is only registered with HMRC.
A sports club could be a CASC or a charity but not both. CASCs are not regulated by the Charity Commission and organisations registered with HMRC as a CASC, cannot register as a charity. They would need to close down and transfer the assets to a new charity.
A mutual society is an organisation owned by its members. Profits are usually reinvested to help improve the service, rather than paid out to external shareholders as they would be in a public limited company (PLC).
Mutual societies are usually regulated by the Financial Conduct Authority (FCA) but may be dual regulated with the Prudential Regulation Authority (PRA).
A Cooperative Society is a business run for the economic, social and cultural benefit of its members.
A Cooperative Society cannot be a charity because its beneficiaries are its own members, rather than the public.
A community benefit society is a business that is run for the benefit of the wider community, re-investing profits in the community.
A Community benefit society can be established as a charity as long as it has an asset lock.
A credit union is a financial co-operative owned by its members. The services credit unions can offer include deposit-taking and lending.
A B Corp is a business certified by the non‑profit B Lab for meeting high standards of social and environmental performance, transparency, and accountability. It’s well‑established in the US and growing in the UK, aiming to balance purpose and profit in how companies operate.
