Choosing the organisational Structure

We have found that being established as a Charity has made life much easier for us in several ways. There are several types of organisation which may be appropriate for your situation, including Community Interest Companies and a variety of charity types. The choice of type will depend on the structure and membership needs of your organisation.

The principle benefits of being a charity that we anticipate are:

• Exemption from Income Tax provided income is used for charitable purposes.
• Gift Aid. Charities can claim an addition percentage, currently 25% in the UK, on donations from taxpayers, increasing the value of donations.
• VAT and Business Rate Reliefs. Charities may benefit from exemptions or reduced rates on certain taxes like VAT and property business rates.
• Being registered as a charity provides legitimacy and demonstrates accountability, encourages donors, volunteers and grant-making organisations to support the cause.
• Registration means meeting legal and operational standards which enhances public confidence.
• Many public and private grant-making bodies only fund registered charities.
• Government funding and contracts may be more accessible for registered charities.
• Registered charities may have special permissions for fundraising, such as holding lotteries or street collections.
• Charitable status can attract more individual and corporate donors who want their contributions to qualify for tax relief.
• Charities benefit from legal protections, such as limits on trustees’ personal liability.
• Charitable status may make it easier to recruit volunteers and engage the local community, as the organisation is recognised as working for the public benefit.
• Being a registered charity often comes with access to resources, training and guidance from regulatory bodies, such as The Charities Commission in England and Wales.
• Registered charities can receive legacy donations (gifts in wills), which often include tax advantages for the donor’s estate.
• Charities may receive discounts on goods and services, including advertising, venue hire, and software licenses.
• Registration as a charity can open doors to collaboration with other charities, businesses, and public organisations that prefer to work with officially recognised charitable entities.

It is worth recognising that whilst there are many advantages to operating as a registered charity there are also responsibilities such as compliance with regulations, reporting requirements and restrictions on certain activities (such as political campaigning). These obligations should be taken into account when considering your organisational structure.

Choosing a Bank Account

You will need a bank account regardless of how you establish your organisation to manage the STH gardens’ funds. The comments below lean in favour of charities.

• Look for Charity-specific options, which may have low cost or free banking.
• Check for monthly account fees, transaction charges and overdraft fees.
• Ensure the bank offers secure, user-friendly online (and mobile banking, if required) to manage transactions, view statements and track spending.
• The account should allow multiple authorised signatories with varying levels of access (e.g. viewing only, payment approval)
• Some banks offer tools for managing donations, including integration with donation platforms and Gift Aid tracking.
• Choose a trusted bank with a strong reputation for reliability and ethical practices.
• Some charity accounts offer interest on credit balances.
• Ensure the bank has robust fraud protection measures such as secure log in systems and alerts for suspicious activity.
• FSCS protection-ensure deposits are protected under financial safety schemes like the FSCS (in the UK).
• Some charities prefer working with banks that align with their values, such as those avoiding investments in fossil fuels.
• Choose a bank that can accommodate your charity’s future needs, such as higher transaction volumes or additional accounts for restricted funds.

Choosing Insurance Cover

The following are key insurance policies that you should consider, depending on your activities, size, location and legal obligations.

• Employer’s Liability Insurance. This covers compensation claims from employees who are injured or fall ill due to their work for the charity.
• Public Liability Insurance. This protects the charity against claims for injury or property damage caused to members of the public during its activities.
• Professional Indemnity Insurance. This covers claims arising from professional advice or services provided by the charity, such as counselling, therapy, or training by employees, those volunteering for the charity and by those contracted to provide services but who may be self-employed.
• Trustee Indemnity Insurance. Protects trustees and directors from personal liability if they are sued for actions taken in their roles. Note that trustees are generally protected under charity law.
• Volunteer Insurance. Provides coverage for volunteers who may be injured while working for the charity.
• Event Insurance. Covers risks associated with specific events and can be useful for one-off fundraising events.
• Property Insurance. Covers damage or loss to the charity’s physical assets, including buildings, equipment and supplies.
• Cyber Liability Insurance. Protects against financial losses from cyber-attacks, data breaches or online fraud.
• Product Liability Insurance. Covers claims related to injury or damage caused by products the charity sells or distributes.
• Motor Insurance. Key if vehicles are owned that covers them for business use.
• You may also wish to consider more specialised insurances such as Business Interruption Insurance, Legal Expenses insurance, Travel insurance, Medical Malpractice Insurance or Abuse Cover.

Consult an expert broker or insurer specialising in charities to ensure adequate and appropriate cover.

Raising Funds

Raising funds is likely to be an ongoing concern of your organisation and there are several key factors to ensure success and compliance. Different organisation types are bound by different fundraising regulations.

This section is written with the assumption that your organisation is a registered charity. It is extremely difficult to raise funds without being a formal organisation. 

Compliance with your country’s charity laws (in the UK, The Charity Commission) and fundraising regulations is essential. You will also need to follow data protection laws when handling donor information, in the UK this is GDPR.

You will need to set out clear financial targets and set out the funds will be used together with a timeline and budget for fundraising activities. Each organisation will need to identify the most suitable fundraising methods. These could be events, grant applications, crowdfunding, corporate or individual sponsorships, legacy giving and a myriad of other smaller schemes, such as raffles and product sales.

Whichever ways you choose to fundraise you will have to identify potential donors, both individuals and businesses, and grant-making organisations and build relationships with them through effective communication.

You will also need to be transparent in your actions and fully accountable for how funds are spent.

Organisations find that leveraging social media, using newsletters and traditional media all help to spread awareness and enhance fundraising. Creating compelling stories significantly helps inspire donors.

You will be aiming to create long-term financial stability and will want to explore a variety of different income sources and avoid over-reliance on a single source of funding.

Consider the ethics of your fundraising, ensuring that you don’t make any misleading claims and treat your donors fairly. Avoid partnerships that may conflict with your own mission.

A brief look at sources of funds.

There are essentially 3 sources of funds that can be summarised as follows:

1. Applying for grants or funds through a process of bid writing. This tends to feel quite remote and involves a lot of careful form filling and usually reporting back of monitoring data and progress. This is often a good way to apply for seed funding. The national Lottery and Postcode Lottery fall into this category. In Kent we have found local and county councils have been particularly helpful with information about sources of funding and would recommend approaching Town, Borough and County councils local to you. We have also made use of free fundraising seminars to help us understand the process better.
2. Sourcing funds through those you know. This approach is about building, developing and nurturing relationships. Those relationships may be with local businesses, wealthy individuals or organisations such as Churches. Fund raising through relationships takes time and may not be appropriate for the early days of an organisation.
3. Events based fundraising. This is often a great way to raise awareness and funds together, but amounts raised may be lower. Examples would include raffles, quiz nights, selling merchandise and sponsored walks.