About

We know there are around 1,500 people every year that decide they want to register a charity. Some just have an idea and others have been running their organisation for years, unregistered. The Small Charities Coalition (registered charity number: 1122297) launched in 2009 and we have made it our mission to provide our members with relevant support and make their voices heard.

In our communities, on our streets, up and down the country – small charities are doing incredible work, often with little recognition. We won’t let their work go unseen.

We’re a small charity ourselves so we know that setting up a charity takes a lot of work, care and time but it’s not so difficult when you know how.


What is a small charity?

  • There are 168,000 registered charities in the UK and countless micro charities that don’t qualify to register because their income is so small.
  • 97% of charities in the UK are small charities, sharing less than 20% of the money that goes to the charity sector.
  • We define a small charity as any UK charitable organisation with an annual income of less than £1 million.
  • Did you know that over 73% of charities in the UK have an annual income of less than £100,000? And that number doesn’t include very small charities with an annual income of less than £5,000.

You get the picture. The vast majority of charities in the UK are small and are set up by people passionate about a cause, a person, a community. This guide is for anyone who is looking to set up a charity where turnover is initially expected to be below £150,000 per year.


Our guide

This guide will steer you through the logistics of setting up a charity in simple steps. We will be with you on your journey – from that initial idea, calling or passion, to when you reach an income of £1 million (if you want to) and use your experience to support other small charities in the coalition.

We should start by saying that this is not a full and comprehensive guide to charity law. In order to keep it as simple as possible we have included just enough to guide you through the basics. The website of the Charity Commission of England and Wales is where you should go for the full breakdown on absolutely everything you need to know about registering, and running a charity. You’ll want to refer to it frequently during your application.

What we try to do here, is lead you through the steps needed to achieve a successful charity registration with the Charity Commission for England and Wales.  Separate rules apply for Scotland and Northern Ireland.


Before you get started:

  1. All charities with an annual income of £5,000 or more, must register with the Charity Commission.  If you want to register your charity as a Charitable Incorporated Organisation (CIO) – which we recommend here – you should register with the Charity Commission whatever your charity’s income, even if it has no income
  2. You need to make sure that setting up a charity is the right step for you to take. The Charity Commission offers some helpful guidance on this. Here are a few things you should think about:
  • You can’t set up a charity which benefits only one person
  • You must have clear aims (charitable purposes) to set up a charity
  • You can’t receive any personal benefit from being a trustee
  • There might already be another charity doing exactly what you plan to do
  • There are laws and rules that you will have to follow when you register as a charity
  • Political purposes are not charitable
  • You can’t do anything that is unlawful (this one goes without saying!)
  1. The advantages of being a registered charity include:
  • You will not be expected to pay tax on income from most donors – which will be important if you raise funds from the public – or on most other income
  • You will get a large discount on the business rates on any property your charity operates from – at least 80% and often as much as 100%
  • Many funders will only give grants to registered charities
  • Charitable status gives you legitimacy in the eyes of the public

QUICK TIP

All charities can reclaim the tax on donations by registering with HMRC for Gift Aid. This is done by completing an online application form. Gift Aid can only be claimed on donations made by people who live in the UK and pay income tax or capital gains tax.

It’s not the easiest of processes; see Joe Saxton’s blog at https://nfpsynergy.net/blog/gift-aid-claim-small-charity-information

There is plenty of information online, including at https://www.gov.uk/claim-gift-aid

If, after reading this, you are ready to go, then click on the link to our checklist. It isn’t presented in any special order, but it all needs to be done. Don’t be put off! It looks scary at first sight but follow through the steps and you will find yourself registering your charity in no time!


Who are the Charity Commission?

The Charity Commission for England and Wales is the regulator of charities. It maintains the register of charities and keeps an eye on charities accounts and behaviour.

The organisation is attached to the Department for Digital, Culture Media and Sport but it’s actually a non-departmental public body so they answer to Parliament, not Government ministers.