How to Set up a Charity

If you have a passion for a social issue, and decide to set up a charity, there are a number of considerations to take into account. If you plan well, you’ll be more likely to achieve your goals, so it’s worth taking your time with the preparation phase. Think of matters like not for profit insurance, rules and regulations related to children, and how to raise funds.

We’re going to discuss many of the steps you need to take in your planning in order to make the charity a success.

Do You Need to Set up a Charity?

There are myriads of charities in Australia, all clamouring for attention. In fact, there are 54 000 registered charities in the country. So, if you’d like to set up a charity, perhaps do your research and see if there isn’t something similar already in existence for your chosen area.

Perhaps you can support one of them instead.

What is the Aim and Purpose of Your Charity?

Once you’ve proved that your charity will be unique, figure out why you want to start a charity. Ask yourself some questions:

  • What purpose and aim will it have?
  • Which community or need will it serve?
  • List the main activities
  • What services will it provide?
  • Is it a seasonal project or long-term?

You will need to do your research. If you go into a particular community, your charity cannot decide what their greatest needs are. Ask them respectfully what they would require instead, and set your goals accordingly.

What Resources do You Require?

Firstly, you’re going to need some advice on how to run a business or charity and you must have premises and a bank account. Legal advice is essential and naturally, in order to do all this, you have to have funds.

Furthermore, you ought to consider staff or volunteers, and assets such as computers and furniture.

In addition, consider the ongoing costs such as not for profit public liability insurance, water and lights, and stationery.

What Fundraising Requirements are There in Your State?

There are a variety of fundraising requirements for each state or territory. Research your area in order to ascertain how, when, where and when you can fundraise. You may have to register with a particular state body in order to obtain money. In addition, know how to send and receive money overseas, and the risks and pitfalls involved.

How will you raise funds? Consider the following options:

  • By charging membership fees
  • Going door to door
  • Advertising
  • Events such as dinners, balls or auctions
  • Selling goods or services

What Legal Structure is Best?

There are different legal structures for charities: incorporated or unincorporated. The advantage of having a formal legal structure is that you can rent offices, borrow money, take out insurance or get government grants.

Furthermore, a structure will affect whether it can be sued or not, what its governance method is, who pays the debt, and how it relates to government agencies.

You must think about:

  • How big your charity will be, and how complex it is
  • What accountability structure it will have
  • Personal liability of office holders
  • Whether you’ll apply for government grants
  • Whether you work in more than one territory
  • Tax concessions

Who will Manage Your Charity?

It’s very important to think about who will manage your charity. Some of the considerations are:

  • Does the charity need a governing body?
  • What kind of governance or rules will you have?
  • Will you have formal processes like meetings, rule-making bodies and other decisions-making guidelines to prevent misunderstandings?

If you have more people on the team, the responsibilities are shared, which will help it be sustainable in the long run.

Who can You Ask for Help?

It’s important to have a team of people around you who can help in terms of advice and legal work. The ACNC is a good support and wants to help you run and maintain a healthy charity. You should also get advice from a tax and charity lawyer, and from small business mentoring organisations. Find someone who knows about working with personnel and how to approach the culture you wish to work with, if your charity focuses on people.

Look at specialist advisors, such as working with children and the precautions you need to have in place. Or perhaps you want to operate as an Emergency Aid charity—find out what equipment you will need, and how to go about your operations so you can take swift action. Whatever your special focus, make sure you have an experienced individual from that arena to advise.

Conclusion

Setting up a charity is rewarding in the long term. However, to make sure of its success, follow our steps above. Most importantly, make sure you have a business or charity mentor or advisor. It’s worth it in the long run to help the cause you’re so passionate about.

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