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Wednesday, 30-May-2012 11:03 Email | Share | | Bookmark
Princess Arwa Al Qassimi

How to Form a Charity

There are hundreds of thousands of charities currently operating throughout the world, providing services to the public, both home and abroad. These organizations are run on a nonprofit basis and provide invaluable benefits to the disadvantaged individuals where private and state organizations aren't able to cater for their needs. It is essential to be familiar with what constitutes a charity and how to achieve charitable status if one is planning to set up a charity.
The first thing you need to consider before you begin to establish your charity is whether the organization you wish to set up is suitable or would benefit from actually being a charity at all. Charities are distinct legal organizations that must operate within the confines of charity law and serve a purpose for the public. In lieu they benefit from a number of tax advantages such as exemptions and relief’s on income and capital gains tax.
The idea and definition of a charity is largely centered on the concept of public benefit. Organizations can only be recognized as charities if their aims and consequent benefits are considered as being completely in the public benefit. In this way, charities cannot be created to either fully or partially benefit private individuals or groups of individuals. For example, the aims and benefits of a charitable organization cannot be politically oriented.
Moreover, it may be more appropriate to combine your organization with an existing charity to benefit from their knowledge, status and economies of scale on running costs. If you are looking to offer your services or help with a specific cause it is likely that there is already a charitable organization which addresses the issue and you may more effectively achieve you aims by working with them.
For example, if you are looking to carry out fundraising for a particular cause there is no need to set up a new charity for the exercise and instead you should look to work with an existing charity that already addresses that cause.
Once you have settled on the idea that the most appropriate status for your organization is that of a charity, you then need to consider whether you need, would benefit from and/or would qualify from gaining charitable status from the Charity Commission.
Becoming a registered charity with a registered number is proof of a charitable status but is not the only defining feature. It does potentially enhance your organizations ability. For example in the UK, a charity should only be registered with the Charity Commission to attain charitable status if its annual income exceeds £5,000.
Your charitable organization will also need to have a board of trustees in place.


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