A step-by-step guide on how to register and set up a UK charity CIO. Registering a charity may seem complex but this practical guide to registration and setting up a charity, makes it easy, with links to everything you'll need to become a registered charity with the Charity Commission.
If you want help on any aspect of registering or setting up a charity, click the AI Bunny icon in the bottom right of your screen and ask it short questions, including key words. It can help with anything to do with setting up a charity, including finding funding and how to download the policies you will need to register with the Charity Commission.
Is setting up a charity the best choice? Most people seem to want to register a charity, with the Charity Commission, but it can be a very time consuming process, there are a number of options and, often, registering a charity isn't the best. This toolkit will help you to decide which type of non profit or charity to set up.
The different types of charity. If you do choose to set up a charity, it can either be unregistered (unincorporated association) or registered with the relevant UK charity regulator - Charity Commission, OSCR (Scotland) or CCNI (Northern Ireland). In the past, there were 2 choices, but the Charities Act 2006 introduced Charitable Incorporated Organisations (CIOs), of which there are 2 types. In Scotland, these are known as SCIOs and are a bit different.
Which is the best choice? It's only my opinion and I'm not a lawyer, but this is what I think:
In the UK a charitable foundation isn't a legal structure, but tends to be a charity 'founded' by a company or individual, although it's basically just a name, so you can call your charity a foundation, if you wish to.
How do I decide? If you're happy that a registered charity is the right choice for you, whilst the vast majority of people opt for a CIO, it's not always the best option. To help you decide, watch my video (3 mins) on choosing the right charity structure, which explains the most common options and the advantages and disadvantages of each. Alternatively, I've summarised these in this infographic.
Finally, almost no-one will recommend an unregistered charity to you, because they can't make any money out of you. However, I like them, because they're really quick and easy to set up, and there are an estimated 100,000 in the UK. If you're just starting out and not sure where it'll go, or you want to get started, not spend time and money keeping the Charity Commission happy or you don't expect to secure more than £5000 pa, it can be the best choice. Here's my toolkit.
Listed below is just some of our free support, but you also have our AI bunnies with you every step of the way in setting up your charity. Just click the icon in the bottom right of any screen and tell it what you need - help with charity registration, finding funding, advice, expert free support, resources, guides, data, raffle prizes, whatever. Available 24/7, they'll go and get you what you need.
The non profit set up toolbox gives you everything you need to set up and register your charity and make it a success. Plus funding is almost always the biggest challenge. Use Funding Finder, to find a huge range of grants and Help Finder to find lots of free fundraising support and also companies that make product/financial donations. There's also a fundraising online health check, with 60+downloadable funder lists, and free policies, which you'll need.
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The Commission requires a large amount of registration information, but it focusses very closely on some issues, which you'll want to get right to successfully register your charity.
They want to see that you have all necessary processes and controls in place and evidence. Give them the detail needed. If you write one sentence in a box, it probably isn't enough. If someone is an expert in an area, you work with statutory authorities/expert charities, have adopted standards or work to some quality framework, or similar mention that, as it evidences your work. Uploading policies, such as safeguarding and grant making (if applicable) can be helpful.
What the trustees choose to do within their objects is largely up to them, as long as they don't unreasonably exclude people, but you can't do anything outside your objects. Make sure you take into account what you might be doing in a year or 2, when your charity has become a real success. If you don't, you might need Commission approval to amend your objects. Here are some ideas:
You can convert a CIC Limited By Guarantee to a Foundation CIO. You will need a resolution to convert you CIC to a CIO, to adopt the proposed constitution of the CIO and a resolution adopting the proposed constitution of the CIO.
The Commission requires a very large amount of detailed information, so it's a good idea to get everything together before you start.
The system times-out after a period, but doesn't tell you and allows you to keep entering data, which you then lose when you try to save. Done that. If you go for a cup of tea, always save before you do.
Download and complete the relevant governing document (constitution). These are long legal documents, but almost everything is standard text. You’ll need to make decisions on a range of issues, such as your charity's name, objects (purposes), trustee types and numbers, the names of the 1st trustees and liability. The options include ex officio and appointed trustees. This is when you give another organisation the right to appoint one or more trustees - very rarely applies, so usually people just delete these sections.
However, the key issue is your objects(s). This is what your charity aims to do and the Commission takes these extremely seriously, so spend time and effort on this. You can have one or more, but these must be exclusively charitable. Fundraising is not a charitable object, so don't include it. The more objects you have, the more complex the information required will be and the greater the opportunity for the Commission to find fault. Don't include activities, such as research, education or health, unless you deliver these in a professional capacity. If you bring in speakers for workshops, signpost people, or similar, using 'Promoting' or 'Raising public awareness' can work better.
Your object(s) should describe the outcomes you are seeking, how you will do this, where and who will benefit. My short video (4 mins) will give you everything you need to do this well and here's the Commission's guidance and some examples.
Check that your charity’s name hasn’t been used by another and is allowable, and you now also have to check this with Companies House. For CIOs, you also need to check with Companies House for sensitive names, including fund, federation, friendly society, and co-operative and anything vaguely Government(ish), regulatory or Royal. If you use a sensitive name, the Commission may require a letter of non-objection; best avoided, unless it's important to you.
There's a check function in the online application form for your name, but it doesn't really work, so best to do it yourself to be sure.
If your name is something that might be trademarked, you may wish to check this here. For example, Golf Charity Cup is trademarked and there are 86 pages of others with 'Charity' in the title.
If your charity name includes the name of another organisation, or individual, you'll need to attach their permission to use it when you register. For example, the University of Aston Clinton Alumni Association.
You will need to upload substantial information about your trustees. Aim for a minimum of 3 and maximum of 12. If you need to recruit trustees, here's how to do it and people who will help you for free. There must be at least 2 'unconflicted' trustees. For example, if you and your partner or a business associate will be trustees, you will need at least 2 others, bringing the number of trustees to 4.
Complete a trustee declaration, which has to be signed by each trustee. The Commission are incredibly pedantic about this. If you don't fully complete it, they will reject it. That includes not inserting your charity name (exactly as per the constitution) and number of trustees, or if you forget to tick the 'Working with vulnerable groups box'. My video (2 mins) on completing the form, will help you make sure you get it right.
There’s a lot of other specific information required, so read this Q&A before you begin. You will also be asked for information about the specific activities you will be undertaking, such as education, religion, research, sport and human rights.
The Commission publishes guidance on its website. However, the site is notoriously user unfriendly, so you'll need to put a bit of effort in to find what you're looking for. You can find links to most of the publications here.
You will have to upload your governing document (constitution) and trustee declaration. If you have a business plan, brochures or similar, that can help, but make sure these don't include material that conflicts with your application. All uploads have to be in pdf format and no larger than 25MB.
You can also upload policies. I would always include safeguarding, if you work with children or vulnerable adults and, if a grant maker, a grant making policy. Here's my index of online policies, which include both. You can download the full versions in Word format from the relevant questionnaires. For these 2 that's the People and Income health check questionnaires. Amend these to meet your needs. Register here. Everything is free.
Uploading relevant policies, can be a very good way to significantly strengthen your application. Take the questions asked, turn these into requirements and include them in the policy. You can further underpin this by including any relevant quality standards or frameworks. For example, my animal welfare policy, includes all of the requirements in the application questions, plus the Animal Welfare Act, and DEFRA and RSPCA welfare standards. That ticks all the Charity Commission's boxes for them. You can do this with most aspects of your application. When filling in your application, use what's in your policies to answer the questions.
Yuk, you're creating work and turning us into a bureaucracy! Nope. These are minimum standards, and any good charity will work to higher. It just translates what you do into evidence that will keep the Commission happy.
There are 24 screens to complete, but the system will generate additional specialist questions based on your activities. Here are the main sections.
You won't be able to change your application once you've submitted it, so check it over before you do. There's a spell checker (top right), but it's fairly awful. You can also download a copy of your application, using Print (again top right)
On Submission. You'll receive an e mail with a pdf copy of your application. A copy of this will also be emailed to the contact for the organisation and each trustee. Hang onto this, as it contains information you'll need to register with HMRC.
The Commission's Response. Usually within a few weeks, although I have had one application back in a day. However, it can also take much longer. If you receive an e mail advising that your application will need to be considered by a specialist that usually takes a couple of months.
More Questions. Once you get a response you will almost certainly be asked even more questions. The Commission is quick to say what it doesn't like, but not what it does want. If you don't understand it, go back to them saying that and asking them to advise you specifically what it is they want from you. If you submit something to them, it can be helpful to add that, if they don't feel it meets their requirements to register your charity, you'd be grateful for their expert advice on what changes they wish to be made that would.
Don't give up, because you're nearly there. Give them what they ask for and you should receive your registration number.
Say Thank You. Send them a thank you e mail. None of us say thank you nearly often enough.
If the Commission refuse your registration you have a number of options to challenge this and to obtain further information to help you. This CEF resource details what these are and how to do so, with links to all the guidance and help you may need.
In my experience, it's a bit of a lottery. I've had a charity registered in a day, but it can take many months. In general it take a few weeks, but can take longer, particularly if your case is complex, or includes issues the Commission tends to focus on. For example, a founder/trustee being paid, or a relationship with another organisation, such as an overseas NGO, or commercial company. My own charity took 23 months and was only registered once I took them to the 1st Tier (Charity) Tribunal.
Here's an extract from the Charity Commission Annual report 2021/22, under the Performance Analysis section. In my experience, if I get lucky it can be about a month, but its usually something like 3 months and can be a lot longer.
|We aim to assess and provide an initial response to applications for registration, permissions and requests for advice within 10 working days
|We assessed and responded to 96% of applications within 10 working days
|We assessed and responded to 99% of applications within 10 working days
|We aim to decide registration, permission and advice requests within 30 working days
|We decided 80% of all requests within 30 working days
|We decided 86% of all requests within 30 working days
If your application is refused and you submit a Decision Review, there doesn't appear to be a set number of days to complete this. However, its guidance to its staff on managing this does include (OG 736- 1, B1.7).
The timescales for conducting a decision review are very tight. If you are asked to participate in a decision review, it needs to be one of your top priorities.
Having done all that hard work, make sure you can claim those lovely tax reliefs by registering with HMRC. Last year, the sector failed to claim £600m in Gift Aid alone and that's only one of the many available.
When you're ready, read my Part 3 guide on how to register with HMRC. Here are the charitable tax reliefs you can potentially claim, with links to the resources you'll need and here's my guide to the various types of Gift Aid and how to claim these. To register, you'll need a bank account. if you don't have one, here's my guide to opening a free charity bank account.
For more lots more resources to help you make your charity a success, visit Start-up Toolbox in the Resource Hub. Better still, join the free Charity Excellence Framework, which works for even the smallest charity. A registered charity ourselves, we provide 8 online health checks, the huge information hub, Quality Mark and 3 online directories.
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To access help and resources on anything to do with running a charity, including funding, click the AI Bunny icon in the bottom right of your screen and ask it short questions, including key words. Register, then login and the in-system AI Bunny is able to write funding bids and download 40+ charity policy templates as well.
This article is for general interest only and does not constitute professional legal or financial advice. I'm neither a lawyer, nor an accountant, so not able to provide this. If you need professional advice, you must seek this from a professional. To do so, register, then login and use the Help Finder directory to find pro bono legal support. Everything is free.