Setting up a charity

This guidance note is designed to set out the main practical and legal issues to consider before setting up a new charity in England and Wales. It also sets out the requirements for registering a charity.

For further detail on any of the subjects included in this note, please visit the Charity Commission website .

New charities are established for a number of reasons. Grant-making charities can be useful vehicles for managing charitable donations effectively and tax-efficiently. In some cases, feeding donations through a grant-making charity is the only way to obtain UK tax relief on donations that will be used to carry out charitable activities. For example, this may be the case where the intention is to transfer funding to a body established outside the European Economic Area.

A new operating charity, on the other hand, may be established to pursue a charitable objective which is not carried out by any existing charity, or where the founder believes that there is another, more effective, way of carrying out that objective.

Charities usually cost money to set up and to run. Before a new charity is established, it is therefore important to ensure that such expense will not be wasted. For example, anyone considering establishing a grant-making charity should ensure that it would not be better to make direct donations to operating charities. Similarly, before establishing a new operating charity, research should be done into existing charities operating in the same field to ensure that the proposed new charity will not create inefficiencies or a duplication of effort.

Various kinds of entity can be established with charitable status. Charitable status does not generally derive from the form of the entity but