Charities

Introduction

Unlike other businesses the primary objective for a charity is something other than to make a profit. Charities are set up for a multitude of reasons, for example:

• To help the homeless e.g. Shelter
• To help famine stricken countries e.g. Oxfam
• To support the mentally ill e.g. Scope
• To help the elderly e.g. Help the Aged, Age Concern
• To protect children e.g. NSPCC, UNICEF
• To provide educational services or arts organisations e.g. Prince of Wales Charities
• To protect the environment e.g. Greenpeace, National Trust, Woodland Trust

• Charities and Business Plans
• Although a charity's main purpose is not about making a profit, it still needs to follow business principles, so that it can generate enough money to fund its activities.

As can be seen charities are set up to achieve a multitude of reasons. They will need to make money (profit) to pay for the activities needed to achieve their objectives but "profit" is not their primary objective

The image below has logos used by a selection of charities, each of the charities has different objectives.

Charities And Business Plans

Although a charity's main purpose is not about making a profit, it still needs to follow business principles, so that it can generate enough money to fund its activities.

Charity Registration In The United Kingdom

To protect people that donate to charities, charities need to register with an official body. Registration is designed to prevent fraudsters pretending that they are going to use donations for charitable purposes when they actually intend to use it for personal gain. Registration also protects those who set up and fund charities as it means that they are not liable for the charity's debts.

Who Do Charities Register With?

In the United Kingdom (UK) registration is with the:

• Charities Commission for England and Wales – for English and Welsh charities
• Office of the Scottish Charity Regulator - for Scottish charities
• Charity Commission for Northern Ireland – for charities in Northern Ireland

In order to register, the organisation must convince the registrar that they are a genuine charity and that they are being run satisfactorily. If the registration application is accepted then it will enjoy special privileges for example in the UK organisations will enjoy tax benefits and can claim "gift aid" on donations from tax payers.

What Happens After Registration

Once registered, the charity will be given a registration number and its activities will continue to be monitored by the Charity Commission. Charities with annual incomes in excess of £10000 must by law, send their accounts to the Charity Commission. The Charity Commission provides registered charities with guidance and will expect them to adhere to its rules and regulations some of which have the force of the law.