Considerations Before Starting a Charity

Considerations Before Starting a Charity

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Published by TOP4 Team

Australian Charities and Not-for-profits Commission (ACNC) research shows that every day, nine people in Australia decide they’d like to start a charity. If you’re one of them, planning first will help you achieve your goals, as well as identify possible challenges or risks.


Before you start a charity, ACNC Commissioner Susan Pascoe AM has the following questions for you:


Do you really need to start a new charity?
There may be an existing charity or not-for-profit that already does what you’re planning to do or that may take on your idea as a project that it can support. There are already more than 54,000 charities operating across Australia (approximately one charity for every 425 people). You can search the ACNC Charity Register to find registered charities you can support or work with on a project.


What will be your charity’s purpose?
Write down in detail what you want to achieve with your charity – this will affect how you set it up and what you need to put in place to meet these goals. Who will benefit from the charity and how? To be registered as a charity with the ACNC, your organisation must be a not-for-profit with a charitable purpose that benefits the public.


What resources might you need?
You may need to cover start-up and ongoing costs. It may be worth getting financial and business advice. Some of the resources you may need to plan for include: getting volunteers or staff, assets (an office, IT and other equipment), ongoing costs (utilities, rent, licences, insurance and supplier costs) and promotion.


Will you need to look at fundraising requirements?
Charities raise money in many different ways, including charging membership fees, holding fundraising events and selling goods. Most fundraising activities are regulated by state and territory governments, so you may need a permit before you start. Find out more about your local state or territory regulator before you start fundraising.


Do you want to receive charity tax concessions?
A number of tax concessions are available to charities. Your charity must be registered with ACNC before it can receive Commonwealth charity tax concessions. Some charities may also be eligible to apply for deductible gift recipient (DGR) status with the Australian Taxation Office. You can apply for charity registration and tax concessions using the one online form on the ACNC website.


What legal structure would work best for your charity?
Your charity's legal structure (if it’s incorporated, or a trust, for instance) will affect many things, such as its legal identity (whether it can be sued), its governance structure (who makes decisions and how) and its responsibility for debts. Each structure has pros and cons and no one size fits all for charities. This is an important decision, so you should consider undertaking research and getting legal and other professional advice if needed.


Are there other legal and regulatory issues?
There are many legal implications in setting up a charity, and it may have to comply with a variety of laws. You may want to get professional (including financial and legal) advice to assist you with things such as workplace health and safety laws, insurance and employment laws.


Who will manage your charity?
While rewarding, running a not-for-profit organisation can be very time-consuming. If more people helps share the load, your charity will be more effective and sustainable. If you have good processes for decision-making and other good governance practices, that will protect your charity and help it achieve its goals. For instance, you may need to appoint a board. If you’re thinking about employing volunteers, remember to check what legal requirements you have to meet. Like any employer, you need to provide a safe work environment.


How will you promote your charity and its work?
What kind of involvement would you like from the public and potential investors/donors? How would you reach your target audience to promote your charity’s work and encourage people to get involved? ACNC registered charities have a free profile on the Charity Register. You might also want to develop your own website or other tools to get the word out.

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