Many people start charities because of experience, maybe you would have needed help at a certain point in your life but it wasn’t available, so now you’re making a difference to others. Or simply, you might just be one of those angels sent from above.
Either way, when you’re trying to tap into the public sector’s wallet all you seem to get is a bunch of moths. Unfortunately, it’s the way of the world now and because of this, not-for-profit organisations make a hugely positive impact on so many lives.
You probably know by now, I hate being the bearer of bad news, and I certainly do not want to put a spanner in the works, BUT there are some crucial points you must consider before diving-in head first.
When it comes to Trustees, we are opening the flood gates in terms of rules and regulations that must be adhered to.
For now, all you need you need to know is that they have the overall legal responsibility for a charity. The law describes charity trustees as ‘the persons having the general control and management of the administration of a charity’.
So before you even start trying to meet the requirements of being a charity registered with The Charity Commission – we’ll come to them in a sec – there is a mound of paperwork first.
For the trustee section, you’ll need to explain (in detail) the trustees roles, who is involved and the charity structure.
The Charity Commission
These aren’t the bad guys, but because of so many mismanaged charities over the years, the due diligence is now tighter than ever.
The Charity Commission is the regulatory body for all UK charities, you can find any registered charity on their website, and similarly people will be able to find yours.
If anything falls foul with formalities these will be noted on this website which could potentially ruin any chances of future funding, so beware!
This leads me onto the next point. There is an extremely high requirement level for transparent financial management.
I’ve said it once, I’ll say it a million times. CLOUD ACCOUNTING. It is the way forward and you are best to get started on the right foot.
Up to date financial information in a few clicks means you can produce reports for tenders, funding / grant applications and trustee meetings – not to mention potentially keeping that accountancy bill down!
It’s the elephant in the room with every organisation, not just charities. Majority of the income earnt through a registered charity isn’t taxed which is great (That’s right folks, you read it here, HMRC does have a heart)
Too good to be true?! Kind of! You do still have to have some dealings with HMRC for Gift Aid purposes.
This is that tick box you always tick but never read when making a contribution. It’s to claim back the basic rate tax from your donors. It can be very complex so it’s handy to have a professional on board till you get into the swing of it.
Finally, professional guidance is a must. There is only so much Google can advise you on, let’s face it, half the stuff you research contradicts itself ten minutes later.
Richard Lacey is a charity specialist – I don’t want his head inflating too much – but there’s very little he doesn’t know when it comes to charities. From formation to funding and good financial management, he has been the trustee of several charities too so his knowledge and experience means he can see charities from both sides of the fence.
So, if you’ve decided you’re ready for it, the ideas, the dedication and the willingness to comply is all still there after this blog, then give us a call – we can’t wait to be involved.
Talk to us today, about accounting for tomorrow.