What is a charity?
Charities are not-for-profit organisations that undertake activities that contribute
to society. In England and Wales charities with annual incomes over £5,000 are required
to register with the Charity Commission. Since April 2008 charities have had to
prove 'public benefit' to the Charity Commission. 'Public benefit' is the legal requirement
that every organisation set up for one or more charitable aims must be able to demonstrate
that its aims are for the public benefit if it is to be recognised and registered
as a charity in England and Wales.
Small charities and some religious organisations do not have to register and are
called "excepted charities". Some specific types of larger charities are also not
required to register because they are regulated by agencies other than the Charity
Commission. These charities include universities and are called "exempt charities".
Charities that were 'excepted', and some that were 'exempt' from registration before
the Charities Act 2006 - opens
new browser window was passed, will have to register if their gross annual
income exceeds £100,000 starting in January 2009.
Other types of organisations also undertake activities that contribute to society.
These include voluntary and community organisations and social and community enterprises.
What do charities do?
The origin of formally constituted charities in England and Wales can be traced
back to Elizabethan times. In 1601 three specific categories of charitable activities
were identified: the relief of poverty, the advancement of education and the advancement
of religion. Over the past 400 years the scope of activities recognised as charitable
has expanded and has been recently defined in the Charities Act 2006 to include:
- the prevention or relief of poverty;
- the advancement of education;
- the advancement of religion;
- the advancement of health or the saving of lives;
- the advancement of citizenship or community development;
- the advancement of the arts, culture, heritage or science;
- the advancement of amateur sport;
- the advancement of human rights, conflict resolution or reconciliation or the promotion
of religious or racial harmony or equality and diversity;
- the advancement of environmental protection or improvement;
- the relief of those in need, by reason of youth, age, ill-health, disability, financial
hardship or other disadvantage;
- the advancement of animal welfare;
- the promotion of the efficiency of the armed forces of the Crown or of the police,
fire and rescue services or ambulance services;
- other purposes currently recognised as charitable and any new charitable purposes
which are similar to another charitable purpose.
In addition to these charity categories it is important to recognise the services
that charities provide, who their beneficiaries are and where they operate. In broad
terms charities perform three services:
- they provide help
- they represent or campaign
- they provide resources such as grants or volunteer help
Charities have three main types of beneficiary group:
- individuals - including the elderly, children etc
- institutions - including hospitals, schools etc
- the environment - including the conservation of land, animals etc
The area of benefit of charities extends from individual local communities to
regions, countries, continents and, in some cases, worldwide.
How many charities are there?
GuideStar UK holds information on the 169,000 registered main charities in England
and Wales. All these charities are required to make annual returns to the Charity
Commission. All those with annual incomes over £10,000 are required to file annual
reports and financial statements. Approximately 60,000 registered main charities
file such documents. From April 2009 the threshold for submission of annual reports
and financial statements increased to £25,000.
We do not hold information on the 22,000 subsidiary charities that are recorded
on the Charity Commission's Public Register of Charities but are not required to
complete annual returns nor file annual reports and financial statements.
Who works for charities?
The work of charities is undertaken by both volunteer and paid staff. Many of
the larger charities use a combination of volunteer and paid workers. However,
the vast majority of charities are run solely by volunteers.
Trustees are a special form of volunteer - it is these people who are legally
responsible for the work of the charity. Other volunteers contribute to the
work of charities by directly helping people and by fundraising, campaigning,
and undertaking administration.
Find
out about volunteering for a charity.
How much money do charities spend each year?
It is estimated that registered charities in England and Wales spend £36
billion each year. Most of this money is spent on charitable activities,
including on grants to individuals or other charities. However, charities also
have to spend money in order to generate the funds they need. These income
generating activities include fundraising initiatives, running trading
subsidiaries and charity shops, and the management of investment assets.
Where do they get this money from?
Charities receive funding from five main sources:
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Donations and gifts from individuals - including legacies / charitable bequests
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Grants from charitable trusts and companies
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Fees for delivering services - including Government contracts
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Income from the investment assets such as shares that charities hold
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Profits from trading subsidiaries and charity shops
Find out about
giving to a charity.
Find out more
Office of the Third Sector - opens new browser window.
The Office of the Third Sector was created in May 2006, incorporating the responsibilities
of the Active Communities Directorate in the Home Office, and the Social Enterprise
Unit in the Department for Trade and Industry. The decision to place the Office
of the Third Sector at the centre of government in the Cabinet Office was taken
in recognition of the increasingly important role the third sector plays in both
society and the economy.
National Association for Voluntary and Community Action - opens new
browser window.
The source for information on the local voluntary and community sector. NAVCA act
as a voice for charities, and voluntary and community organisations working at a
local level.
National Council for Voluntary Organisations(NCVO) - opens new browser
window.
The source of information on the voluntary and community sector as a whole. NCVO
represent charities and the voluntary and community sector in England.