Common Mistakes

5 Common Mistakes When Setting Up a Charity and How to Avoid Them

5 Common Mistakes When Setting Up a Charity and How to Avoid Them

Practical tips to ensure your application succeeds!

  1. Not Defining Your Charitable Purpose Clearly

Your charitable purpose is the foundation of your organisation. Without a clear and concise purpose, your application could face delays or even rejection from the Charity Commission.
What to Do Instead:

  • Research and articulate your charity’s specific aims and objectives.

  • Ensure your purpose aligns with one or more of the Commission’s recognized charitable purposes, such as advancing education, relieving poverty, or promoting health.

  • Avoid vague statements; be precise about the impact you intend to make.

  1. Overlooking the Importance of a Governing Document

Your governing document is essentially your charity’s rulebook. It sets out how your organisation will operate and ensures compliance with charity law. Skipping this step—or using a poorly drafted one—can lead to confusion and regulatory issues down the line.
What to Do Instead:

  • Draft a governing document tailored to your charity’s needs.

  • Include key details such as your charity’s objectives, trustee roles, and decision-making processes.

  • Regularly review and update the document as your charity evolves.

  1. Failing to Demonstrate Public Benefit

The Charity Commission requires all charities to provide a clear public benefit. If you can’t show how your work benefits the public, your application may be denied.
What to Do Instead:

  • Clearly explain who will benefit from your charity’s work and how.

  • Provide evidence, such as examples of services, programs, or projects you plan to deliver.

  • Show that your activities are accessible and inclusive for those in need.

  1. Choosing the Wrong Legal Structure

Your charity’s legal structure determines how it operates, how decisions are made, and its level of liability. Picking the wrong one can create unnecessary challenges.
What to Do Instead:

  • Research common legal structures like CIOs (Charitable Incorporated Organisations) and charitable trusts.

  • Consider factors such as the size of your charity, level of liability, and operational needs before making a decision.

  • Seek professional advice if you’re unsure which structure is best for your goals.

  1. Skipping Financial Planning

Financial sustainability is key to running a successful charity. Without proper planning, you may struggle to secure funding or manage resources effectively.
What to Do Instead:

  • Create a realistic budget that reflects your charity’s income and expenditure.

  • Develop a fundraising strategy to secure grants, donations, or other income sources.

  • Ensure proper financial controls are in place to maintain transparency and accountability.

💡 How We Can Help

Setting up a charity doesn’t have to be overwhelming. We specialise in guiding charities through every step of the registration process.

Drafting governing documents tailored to your objectives
Ensuring compliance with Charity Commission requirements
Demonstrating public benefit clearly and effectively
Choosing the right legal structure for your needs
Financial planning support to secure long-term sustainability

Let us take the stress out of the process so you can focus on making a difference.

📞 Contact us today to get started on your charity journey!