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The Question: Is it worth being a registered charity?
by Jay Kennedy, Policy Officer, Directory of Social Change
There are a number of legal forms that people can use to organise themselves in order to achieve social change or social outcomes. For example: social enterprise, trade union, political party, or registered charity.
There are also more informal ways to organise, where a legal structure that defines the organisation and its activities may not be necessary or desirable. Being a registered charity brings a number of benefits, but it also brings restrictions and regulation.
With so many other options available, what we want to know is: Is it worth being a registered charity?
Yes 82%
No 18%
Thanks to the 192 people who responded, including the 63 people who left written comments.
You can find out what DSC says about being a registered charity and what our respondents said below.
Respondents say…
In contrast to the February and March surveys, this month saw an unequivocal response – a resounding 82% of you answered yes to the question and only 18% said no.
There were a number of interesting themes that emerged in the comments people left.
Many people mentioned the rather practical benefits that charitable status brings in terms of fundraising:
In my experience it is worth being a registered charity as it helps you greatly in funding applications and sponsorship requests. Generally, people seem to be more open to ideas around social change when working with charities.
Being a registered charity gives a legitimacy to an organisation and encourages wider and more generous giving. Some trusts and organisations will give only to a charity.
Personally I always check when asked to donate money whether it is to a bona fide registered charity, and presumably many other people do so too. Our charity registration is important to our organisation, and definitely worth it.
Others mentioned the benefits in more general terms of public trust and confidence – that charitable status acted as a sort of ‘kitemark’ that indicates a certain amount of quality or reliability.
It still gives confidence to the public, even if the more obvious benefits are limited.
'The public' feel more comfortable with registered charities because it means someone has done some checks.
Charitable status has a generally positive image in the public's mind and it enables access to funds where charitable registration is a requirement.
Some people focussed on the regulatory aspect of being a registered charity. The message was somewhat mixed; some felt that the regulations provided no benefits or limited benefits in return, whereas others viewed them as a necessary burden in order to obtain other advantages:
After three years of being a charity apart from providing reports to the charity commission, I can see no benefit to becoming a charity. Nothing has changed apart form having to do more work, with no benefits.
Becoming a Registered Charity is extremely difficult. I'm glad I inherited one - I certainly couldn't have created it!
Being a registered charity is both very satisfying and extremely stressful. But knowing that you are complying with all the numerous rules and regulations and restrictions in some ways gives the charity a kind of safety net.
Paperwork may be boring, but regulations can actually help an organisation 'do the right thing'.
Other people discussed the various legal forms that can be used to achieve charitable or social objectives, and the relative advantages and disadvantages of various forms:
The objects recognised as charitable can often be a constraint requiring a charity to form a Trading Company as well - doubling the admin overhead.
A charity can own a for-profit trading company. However, a for-profit trading company cannot own a charity. So the charity has full freedom to develop (or not) trading and community interest activity, to support its charitable objectives.
It is good for large charities but not small. A 20th Century concept that should be abolished for other social enterprise models, like Community Interest Companies.
These days you need to have more of a business model with a business outlook to sustainability. The trustee/employee split is unhelpful. CIC's are the way forward.
Find out what DSC says about being a registered charity.