Top 10 Charity Law FAQs

1 - Do we need to register with the Charity Commission?

Yes, if you are a charity with an annual income that exceeds £5,000, provided you are not exempt or excepted.

2 - What is the best legal structure for a charity or not-for-profit organisation in England?

Being a charity is a status that can attach to a number of different legal structures. For advice on which is the best legal structure for your activities, please contact our Charities Team.

3 - What are the key legal duties and responsibilities of charity trustees?

Charity trustees are those individuals responsible for the general control and management of a charity. They don't have to be called trustees; for example, they might be called governors, directors, or board members.

Trustees are required to comply with legal duties and responsibilities. The six main legal duties are:

1. ensure your charity is carrying out its purposes for the public benefit

2. comply with your charity’s governing document and the law

3. act in your charity’s best interests

4. manage your charity’s resources responsibly

5. act with reasonable care and skill

6. ensure your charity is accountable.

4 - What is a governing document, and why is it important?

A charity’s governing document sets out what the charity can and cannot do, how decisions should be made and who makes what decision.

The governing document is legally binding, and all trustees must have a copy and understand what it says.

5 - Can our charity engage in political activity or campaigning?

Yes, but only if it supports your charitable purposes and is in your charity’s best interests. Charities cannot exist just to engage in political activity or campaigning, and charities must remain independent of any political party.

6 - What are the rules around fundraising and accepting donations?

Charity fundraising can be a complex area of law. Trustees should read the Charity Commission’s guidance on this (Charity Fundraising: A Guide to Trustee Duties (CC20)) and the Fundraising Regulator’s Code of Fundraising Practice.

In relation to accepting donations, charities should ensure that appropriate due diligence is carried out on the donor and source of funds, in line with the charity’s donation’s policy. The charity should consider whether accepting a particular gift is in the best interests of the charity.

7 - Can we pay trustees or staff who are also trustees?

Unpaid trusteeship is a cornerstone of the charity sector and is considered by many to be the foundation for public trust and confidence in charities. Trusteeships are, therefore, generally unpaid. If you want to pay a trustee, you will need to rely on a specific power in your charity’s governing document, a statutory power or consent from the Charity Commission.

Staff can become trustees provided there is nothing in the charity’s governing document to prevent this e.g. a provision preventing trustees from receiving a financial benefit from the charity.

8 - What is a charity and not-for-profit?

An English charity is an organisation established for exclusively charitable purposes and subject to the control of the High Court in the exercise of its jurisdiction with respect to charities. A charitable purpose is on falling within the definition of charitable purposes in the Charities Act 2011 that is carried out for the public benefit.

A not-for-profit is an organisation that reinvests any profits back into the business, rather than paying it out to the owners of the business.

9 - What legal services do charity solicitors provide to charities and not-for-profit organisations?

Birketts LLP is a full-service law firm with a dedicated charities team. We can therefore provide a full range of legal services to our charity clients. Please see our charities team page for more details.