Starting A Charity or Non-Profit Group
Starting a voluntary or community organisation, a charity or a social enterprise can be more difficult than you might think. Luckily, there are services, resources & advice that can help!Starting Up & Changing Community Groups, Charities, CASCs & Social Enterprises
At Involve, we have easy-read guidance that can help you set up “a group for good”, whether a community or voluntary group, a registered charity or community business. We can also guide you to change your existing group’s structure, if needed.
We have published this guidance here, but highly recommend you discuss your group’s formation or needs with a member of our team as you read these guides. If your group is in Bracknell Forest or Wokingham Borough, we can discuss these with you online, or in some instances, can arrange to meet you face-to-face. Contact Mike Allen, our Trustee Recruitment & Governance lead, for governance support, advice and training, as well as for guidance with these documents:
- Guide #1: Setting up & running a group for good such as a community group or a steering group
- Guide #2: Setting up & running a registered charity , or converting your community or steering group into one
- Guide #3: Changing your unincorporated charity to a Charitable Incorporated Organisation
- Guide #4: Setting up a social enterprise: a Community Interest Company
Things To Consider When Getting Started
Have you been thinking about starting a charity or community group, or a social enterprise, some sort of “group for good”? The voluntary, community, faith and social enterprise sector is a diverse one, constantly growing and changing; we’d love to have more people on board! However, starting a not-for-private-profit organisation from scratch is a major project to undertake, which will need long-term commitment with ongoing responsibilities covered by regulations, and expectations from your community and the public.
Voluntary organisations, community groups, Community Amateur Sports Clubs, charities and social enterprises are set up every day for good and different reasons. Your enthusiasm needs to be balanced with the amount of time and effort required to set up and operate any type of group for good. It is important that you build sufficient time into your ideas and development plan, that you realise that the number of people and resources required to set up, establish and run a new not-for-private-profit organisation should never be underestimated: you can’t do it on your own!
Even if your idea seems unique, there may be other organisations that will compete with you; similarly, there could be several similar groups already established in your local area doing similar work to that you are interested in, but of whom you are unaware. Rather than trying to be a competitor to these existing groups, your first move should be to try joining them instead. By helping another organisation to develop and expand their work to cover your idea and the needs you see, you will be directly benefiting the cause you care about, as well as assisting with the growth of the whole voluntary, community, faith and social enterprise sector, and sharing the work of running the group with others.
1) Identify the Need – Do some research: What is already being offered locally? Will I be duplicating work or services that others are doing? What will others think of my plan for this group? Is my idea going to be a desirable service to the public? Who is my ‘public’? Will my idea be appropriate and popular enough to get suitable and sustainable funding? Should I do a local survey asking what others think of my proposal? And how will people find out about my idea?
2) Find & Build a Team – Working alone can be hard work. Who can help me? How long can I commit myself to be doing this? Who are my target audience? Can I find people who will support my cause? Could these supporters help me with the setting up and running this organisation, now and in years to come? How will I find and recruit trustees, members and volunteers? It is a good idea to have written descriptions of what you want from your people; Involve can supply free template Role Descriptions for most voluntary members of your team.
3) Make a Plan – Starting your idea. What are the purposes and aims of my organisation? How will we meet these objectives? What is the best legal structure for our group? How and when do we get officially constituted? Can we find enough supporters to run day-to-day, as well as have an organised and functional Committee or Board of Trustees or Directors? What policies and procedures must we have in place? Do we need to find and hire a base location? How will we measure the success of our organisation’s work? How will we grow?
At Involve, we provide advice, guidance and support on all these steps in starting and then running your ‘group for good’. If you would like help in following those steps outlined above and assistance with answering these questions, please contact us to arrange a meeting to further discuss your ideas.
Ensuring Good Practices
Running an organisation, whether a voluntary or community group, a charity or social enterprise, takes time, effort and dedication. You should understand the benefits of having good practices within your organisation right from the start. Having and keeping to good policies and procedures are an important safeguard for your organisation, its beneficiaries, volunteers, employees, funders, stakeholders, the public and for you!
You will need to consider these things for your new organisation:
- Governing Document (Constitution or Articles of Association)
- Planning for the future
- Properly and safely managing your finances
- Holding effective and inclusive meetings
- Making sure you have the right and enough Insurances
- Running safe and effective day-to-day operations
- Recruiting and retaining volunteers
- Having correct legal employment practices (for when you have employees)
- Making reports about your work to the Charity Commission or Companies House
Financial Management
No matter the size of your group, you must produce and keep accurate financial records, to know how you will operate now and for the future, and to record where your money comes from and goes to. For formal groups you may be required to give copies of your finances to anyone who asks; for formal Registered, as well as incorporated, groups, you are required to keep your financial records in a particular format and send copies annually to the Charity Commission or Companies House.
Your Committee, Trustees or Directors should discuss and agree your finances at every meeting, ask probing questions, ensuring the financial records are true and correct. For formal groups you will have to have your Accounts independently “Examined” or “Audited” each year before you send them to the Charity Commission or Companies House.
Although all of your Committee, Trustees or Directors are equally responsible for knowing about and managing your money, it is a good idea to have one person as Treasurer who coordinates your finances, keeps the financial records, produces understandable reports, encourages all other people to understand each of those, and who leads liaison with your Independent Examiner or Auditor.
Involve’s Guides to setting up and running your group cover some of the financial requirements of groups for good, and our regular Trustees’ Training goes into much more depth without straying into jargon, about each of your responsibilities for your finances.
Legal Structures
A legal structure establishes your organisation as credible, with a recognisable identity; some structures even reduce individual liabilities.
It is possible for a voluntary or community group to operate without being formally constituted, especially if it is a small-scale operation, e.g. a small self-help group, or something set up for a short time.
For longer-lasting or more formal groups, we advise setting-up a legal structure, using a Constitution that clearly defines your purpose and rules.
For even better protection for long-lasting constituted groups, we strongly recommend “incorporation” (creating a legally-recognised group) that can protect all individuals involved from most personal liability.
The most common not-for-private-profit structures are:
- Unincorporated community group, or voluntary group, or a Community Amateur Sports Club (not necessarily charities, and where some liability to individuals exists)
- Unincorporated charities (where liability to trustees still exists)
- Charitable Incorporated Organisations (where such liability is limited)
- Charitable Companies Limited by Guarantee (limited liability)
- Community Interest Companies (social enterprises, community businesses, NOT a charity; limited liability)
It’s your responsibility to decide which legal structure is right for your organisation, and Involve can help you with that that decision, although not make it for you. Our Guides suggest some of those legal structures that can fit the needs of your group, and explain some of the responsibilities for your Committee, Trustees or Directors in those structures.
The Charity Commission provides advice and guidance about the types of charitable legal structures. Social enterprises and community businesses can find more information at Companies House.
Changing Your Group’s Structure
If your group was set up as an unincorporated community or voluntary group, or a Charitable Trust, or it’s a Community Amateur Sports Club, or a similar “Unincorporated Association”, you may want to consider the potential liability on your Committee or Trustees in the case of anything going wrong.
Obviously, we all hope that things don’t go awry, but for unincorporated groups that are not a separate legally-recognised organisation, every member of your Committee can be individually held liable for actions taken by the group, for the groups’ debts if your organisation runs out of money.
However, if your group “incorporates”, your Trustees or Directors are protected from most such liabilities, including financial ones.
Types of incorporated charity:
- Charitable Incorporated Organisation
- Charitable Company Limited by Guarantee
Incorporated social enterprise or community business:
- Community Interest Company
All types of incorporated organisation are more regulated (by the Charity Commission or Companies House), but those regulations are easy-enough to manage – ask Involve for advice or read our Guides.
How to incorporate? Read our Guide #3, and contact Involve for advice. For most unincorporated organisations, you can do it yourselves!
Future Planning
For any type or size of group for good, it is important that your whole Committee plan for the group’s future, even if those plans are for your group to stay the same. If you want to apply for funding from any Foundation, Trust, National Lottery or other similar sources of charitable or not-for-private-profit funding, you will need a formal plan, even a “Business Plan”.
Such a plan does not have to be complicated or long; it should set out your trustees’ ideas for the next 12 to 36 months or so. It should describe your aims and objectives, your services and operations, your governance (Committee, Trustees, Directors and how they function), and especially your financial forecasts. It will clearly describe how you will promote your group’s activities. And it should show how you will know your services are achieving what you hoped for, and what to do if they’re not.
For any type or size of group for good, it is important that your whole Committee plan for the group’s future, even if those plans are for your group to stay the same. If you want to apply for funding from any Foundation, Trust, National Lottery or other similar sources of charitable or not-for-private-profit funding, you will need a formal plan, even a “Business Plan”.
Such a plan does not have to be complicated or long; it should set out your trustees’ ideas for the next 12 to 36 months or so. It should describe your aims and objectives, your services and operations, your governance (Committee, Trustees, Directors and how they function), and especially your financial forecasts. It will clearly describe how you will promote your group’s activities. And it should show how you will know your services are achieving what you hoped for, and what to do if they’re not.
Involve can support your “group for good” in developing an outline or detailed strategic Business Plan. You can also get advice and download free Business Plan and Cashflow templates from the GOV.UK website. If your or your organisation needs help with this or any other advice about starting you group for good, contact us for more information.