In my last blog post I talked about earned income/primary purpose trading and the fact that charities can charge for services if this work is in line with your charitable purpose or objects (you may see them called a charity's objects, purpose or objectives - they all refer to the same thing!).
We all engage with charities, and, whether we work in the sector or not, we can most likely talk about a charity whose cause is close to our heart. We may even be able to remember a charity's tag line or vision and mission – but we are much less likely to know its legal objects or purposes.
In this post I am talking about these purposes, how each charity needs to be thinking about them, whether you are in the first stages of setting up or are long established and why, this year, its more important than ever.
What are charity purposes?
A charity’s purpose is the most important part of the governing document – they define what the charity is set up to do. As a charity you must have one or more charitable purposes, as defined by law. These include things like advancing health and saving lives, the prevention and relief poverty, education, religion, protecting the environment, arts and culture, animal welfare, human rights, and community development. They are all described in detail on the Charity Commission website.
Defining your purpose when setting up a new charity
Each piece of work your charity undertakes must be in line with its charitable objects so it is essential that if you are setting up a charity you get them right. It’s not just about ticking boxes – creating a charity’s purpose is a chance to really understand the work your charity will do. The Small Charities Coalition has some useful tips about the process (here). They define the areas you need to think about as:
· What your charity is going to do
· Where you are going to do it
· Who will benefit
· And how
This is a really simple way of approaching it, stepping away from all of the definitions and really getting across why you want to set up a charity, the need you are addressing and how your work will benefit the public (which is also an integral part of the registration process and a defining feature of being a not-for-profit!).
It is also essential to future proof your purpose – you shouldn’t be too vague – you need to be clear on why you want to exist and what you are aiming to achieve but you also need to think ahead and have an outline strategy for where you see the charity in the future. If you plan to start on one geographical area but think that you may work elsewhere in the longer-term, you need to make sure your purpose reflects this!
Getting to know your charitable purpose and the impact of covid-19
It essential that if you play a part in deciding what projects your charity can undertake that you know and understand your purpose – every peace of work has to fit with what you are legally set up to do. I have seen this been a key part of discussions this year more than ever before because of covid-19.
The Charity Commission produced guidance earlier this year on whether or not charities should consider changing their objects due to the pandemic. It is first important to consider whether or not you are able to adapt and respond to coronavirus either directly or indirectly. Providing services digitally has been a big part of this. It is likely your beneficiaries will need the same support (if not increased support) this year and charities have been finding new and innovative ways of doing this. Civil Society lists some examples here to give you a flavour. The charities I have the pleasure of working with have also been testament to this and I have seen funders being supportive of restricted funds being used in a different way so that charities can adapt their response.
If you feel you need to make changes to your governing document it is likely you will need permission from the Charity Commission. For example, if your organisation is a company or a CIO, a change to the objects is a ‘regulated amendment’ which would require consent (and only if your governing document allows it). In doing this it is important that your existing beneficiaries are not left behind. As the guidance states “Your existing beneficiaries - whose needs may be less pressing but no less deserving - may also lose out.” Again we need to all be thinking long term – we can’t ignore the impact of covid-19. We all need to be aware that it will change the way we work as a sector, but our beneficiaries still need us and every charity’s support will play an essential role in society long after covid-19.
