How to start a charity – thinking beyond the application
As well as working with new and established charities I also have the pleasure of working with organisations at the very start of their journey.
There are over 169,000 charities in England and Wales, as of January 2021. While a number of charities merge each year, or close down, around 5,000 new charities are formed every year. So, if you are thinking of starting a charity it is really important to consider why you want to start a charity. Is there a need that is not currently being met or could you get involved with a charity or organisation that already exists?
If you are sure that starting a new venture is right for you there’s lots of information out there to help you on your way. Your first port of call should be the Charity Commission, where you will need to apply to become a registered charity. Before you begin make sure you’ve read the commission’s guidance on how to set up a charity and on how to write your charity’s purposes. The Small Charities Coalition also has a really useful site/online guide (www.chariysetup.org.uk), which will steer you through the logistics of setting up a charity in simple steps.
As there is so much information publicly available and many organisations and consultants like myself that and support with the process, I won’t get into the practicalities here. Instead, I want to get you thinking about some of the ‘behind the scenes’ work, which is incredibly important when forming a charity or a CIO, because completing the registration is only the start of the journey!
Getting on Board
Its true that there is no guarantee that your application will be accepted by the Charity Commission, you have to fulfil certain criteria and demonstrate that your charity will operate in the public benefit. Because of this many new trustees wait until their registration has been approved until they begin to understand their role and responsibilities, as well as the practicalities of running a charity. My advice would always be to really get to understand the role you are undertaking as a trustee of a new charity before it is registered (and ideally before you submit the application!). With the new charities I work with I have recently held sessions for trustees so that get to understand the role and are ready to embrace it when the time comes. If you are forming a charity and being a trustee is new to you I would suggest you talk to other charity trustees and make sure you read the Charity Commission’s The Essential Trustee: What you need to know, What you need to do. You might want to go a step beyond this and familiarise yourself with the Charity Governance Code, which is a practical tool to help charities and their trustees develop high standards of governance, so you know what you should be working towards.
It is likely you will be starting with a small number of trustees, but you may also want to think about how you want to grow the board and the skills you will need – carrying out skills mix exercise is something I always recommend and go through with the boards I am working closely with. It’s never too early to think about this and how you will recruit to the board in the future. I’ll be writing a future blog post on recruiting trustees so do look out for that!
Like any organisation your charity will need certain tools in order to get started - make sure you do your homework and make a list! Have you identified an accountant who can advise you on your first Report and Accounts? Reporting requirements vary depending on your income and charity accounts have their own set of rules. I would recommend engaging an accountant who knows the sector and can advise you.
As soon as you are registered you will need a bank account. It is worth starting your research now. Many funders will only accept an application when you have a proof of a bank account – so get things ready to go!
Have you thought about policies and procedures you will need? As well as giving you the guidelines and framework to work towards some funders will also ask for certain policies. They shouldn’t just be reactive, however, take the time to really put everything you need in place.
You will also need people to know you exist, so branding is important, what do you want to communicate about your charity to the public.
These things are just the tip of the metaphorical iceberg, so spend time going through everything you will need to get you and running.
Make a plan!
What do you want your charity to achieve in its first year and in the longer term? And mostly importantly, how will you achieve it?
It is also essential to consider how you will fund your work! You will have had to address funding streams at part of your application, but it is essential you carry out your own fundraising plan and think about how you will develop and diversify your income streams over time to reduce risk. You’ll need to focus your energy and play to your strengths initially, both in terms of your work and accessing funding – there is nothing wrong with taking a simple step-by -step approach in the beginning.
There so much to delve into and explore that I will aim to get into more detail for each section in some upcoming posts. But I hope this has given you a sense of just a few of things you need to think about and, most importantly, that its essential to be several steps ahead and embracing the responsibilities that come with starting up a new charity. I like to liken the process to getting married, or having a child, or a pet! You need to think beyond the wedding, or birth, or day your new four-legged friend comes to live with you. That is only the starting point, the real work begins after that. It’s when the fun starts too, and it’s the most rewarding part. As long as you get organised and embrace it, despite the challenges you will face, it will be worth it!