How do you legally get paid to run a charity?

[Network Yorkshire]

For sometime now my wife has said that she would to set up a charity to help a cause close to her heart. The problem is she would liek to do it full time but isnt sure if the charity she sets up can legally pay her a wage to run the charity... if that makes sense? If so how would she go about it?

 

[Vending Siting Services]

Have a word with the Charities Commissioners - they are the legal body governing charties and they will be able to help you.

Kind regards.

Barbara Fellowes

 

[Network Yorkshire]

That's good advice that frankly i should of thought of...thanks!

 

[bwglaw]

A trustee of the charity cannot be an employee also.

We can advise and assist on the formation of a charity if you email us direct.

 

[Network Yorkshire]

would she have to be a trustee?

i.e. could the charity cover her time and expenses in order that she could give more time to raise money for the charity etc...

 

[bwglaw]

would she have to be a trustee?

No

...could the charity cover her time and expenses in order that she could give more time to raise money for the charity etc...

The charity can only meet reasonable costs incurred in meeting its charitable objectives. Payment for her time would not be allowed unless she is strictly an employee of the charity and not serving as a Trustee/Director of the same.

The site below is a useful resource:

http://www.charitycommission.gov.uk/index.asp

 

[Network Yorkshire]

so she could be an employee of the charity of the charity were a limited company?

 

[bwglaw]

so she could be an employee of the charity of the charity were a limited company?

She can be an employee of a charity, full stop. It does not have to be a limited company by guarantee although many charities that do employ staff tend to form a limited company by guarantee to limit the liabilities of the trustees/directors. She must not serve as Trustee/Director of the Board.

Another form of entity that she could consider is a Community Interest Company (CIC) which is a private limited company for the benefit of the coomunity. The key difference here is there is an 'asset lock' and strict rules regarding the distribution of profit.

I can advise and assist with forming the appropriate entity if you email us direct.

 

[Network Yorkshire]

what kind of expense are we looking at for the set up process?

She may have to do some fund raising before she's even started!

 

[craiga1971]

Have a look at this:

http://www.charity-commission.gov.uk/registration/faqpage.asp

In short, the charity must usually have £5K income per annum.

If she wants to "run" the charity then she will need to be employed by it and thus will have to find IIRC a minimum of 3 people to take on Trustee roles. These are important roles and will require people to play a hands-on role (not day to day) but oversee the charity's work.

(I founded a community group in 2002 and oversaw its transition from an unincorporated association to a Limited Company Limited by guarantee and then on to charitable status, which was granted in 2008.) Drop me a PM if you want to chat about possible avenues open to you.

Craig

 

[Zak alvarez]

So if you run this charity, are you able to take money out to make sure that you have money(if you do it full time and dedicate your life to it.

 

[Newchodge]

No. Only if there is a board of trustees running the charity, who appoint you as an employee.

 

[Zak alvarez]

Okay. So in that case, how will the trustees live if they do not get any money from their full time job?

 

[Newchodge]

Okay. So in that case, how will the trustees live if they do not get any money from their full time job?

Trustees oversee the charity. The employee runs it full time. The trustees cannot take money from the charity. How they live is up to them.

 

[Zak alvarez]

So looking over the past conversation, you can’t be both, you can’t be a employee and a trustee at the same time, and if that is so, then do the trustees literally just make sure everything is going smoothly and check the employee doesn’t steal money? But they do not have anything to do with the actual charity?

 

[Newchodge]

Look at the Charities Commission website. Check duties of trustees.

 

[Mr D]

So looking over the past conversation, you can’t be both, you can’t be a employee and a trustee at the same time, and if that is so, then do the trustees literally just make sure everything is going smoothly and check the employee doesn’t steal money? But they do not have anything to do with the actual charity?

The trustees may well be volunteers at the charity as well as trustees. They will oversee the charity, set policy, vote on matters and receive reports as necessary.
Quite common in small charities for certain trustees to take on roles that could be done by paid staff if they had any.
One might manage the charity, one might fundraise for the charity, one might recruit volunteers etc.

The trustees have responsibilities.
It is rare but they can be paid, as many as a couple of dozen trustees a year are paid - permission has to be sought from the charity commission and tends to be for particular things.
And those trustees then usually cannot vote on anything to do with what they are being paid for.

 

[Zak alvarez]

Okay, one more question, if let’s say I am the employee, do I get to vote on anything like a trustee and also work like an employee, or do I just work and the trustees tell me what to do? (For a charity if that matters)

 

[Newchodge]

You just work, normally. You cannot be (or act as) a trustee or directo.

 

[Mr D]

Okay, one more question, if let’s say I am the employee, do I get to vote on anything like a trustee and also work like an employee, or do I just work and the trustees tell me what to do? (For a charity if that matters)

If the charity governance document allows you to then yes you can vote.
Most places I've come across that would be no but the trustees can make their own exceptions.

The trustees have responsibility for the charity and they tell the employees what to do. Usually by some declared method - perhaps an executive board, perhaps simply the chair informing staff.

Have been to dozens of charity board meetings, only one charity allowed the manager a vote.

 

[Zak alvarez]

And who is the charity governance document?

 

[Mr D]

And who is the charity governance document?

Not a who, a what.
Its a document, often multiple pages long, setting out such things as elections to positions, quorum needed to make decisions, how often the trustees meet and so on.
Basically rules for the trustees and the charity. There are some standardised ones knocking about, local charity support bodies should be able to help put one together.

 

[LiveNetworks Ltd]

Why does this thread read like "Thanks for explaining the rules but I'm trying to work out a way around them"

 

[Mr D]

Why does this thread read like "Thanks for explaining the rules but I'm trying to work out a way around them"

All he has to do is get some compliant trustees and always avoid investigation. That last is harder than people think, lots of funders will do their own checks on the finances and trustees and compliant trustees are a big red warning sign for the charity commission.

 

[Zak alvarez]

As I asked before. If I’m an employee and the trustees pay me, where are they getting the money from?

 

[Newchodge]

Charitable donations and any government or other official funding. the same place all xharities get their money from.

 

[Zak alvarez]

So if I am the employee, the money I receive is from the charity itself, so the trustees take money out of the charity to give to me?

 

[Newchodge]

Your wages are one of the expenses of the charity.

 

[Zak alvarez]

Okay, I understand, thank you. But as an employee, do I get choices on what I can do, so can I go to meetings with trustees?

 

[Mr D]

Okay, I understand, thank you. But as an employee, do I get choices on what I can do, so can I go to meetings with trustees?

No.
You would be an employee. You only go to trustee meetings if invited and they can kick you out before any vote or discussion on an issue.
You would be a non trustee, with zero ability to vote.

 

[Mr D]

As I asked before. If I’m an employee and the trustees pay me, where are they getting the money from?

That's the trustees problem not yours.
There's a ton of books, sites and training courses they can access for themselves. And while undignified, the fact that Oxfam have just lost several thousand donors will have other charities scrabbling to take those donations on.

 

[ethical PR]

So if I am the employee, the money I receive is from the charity itself, so the trustees take money out of the charity to give to me?

From the questions you are asking, it sounds like you haven't looked at the Charity Commission website that has the answers you are looking for. Why not have a read through content on it?

If you want to set up a charity, you can do so as a trustee, you will then have overall control, you raise funds and then you can employee staff to carry out key functions.

 

[Mr D]

If you want to set up a charity, you can do so as a trustee, you will then have overall control, you raise funds and then you can employee staff to carry out key functions.

Control as part of a group and other people being involved in the decision making & confirming the spending of money or policy decisions.
For most new charities its the trustees and possibly over time other volunteers carrying out key functions because they cannot afford anyone else.
Even with no paid employees a charity costs money to run.

 

[ethical PR]

Control as part of a group and other people being involved in the decision making & confirming the spending of money or policy decisions.
For most new charities its the trustees and possibly over time other volunteers carrying out key functions because they cannot afford anyone else.
Even with no paid employees a charity costs money to run.

Yes I meant the trustees have overall control.

The role of trustees was already covered in an early post, hence me not mentioning it again.

I co-founded a charity on less than a £1000. And yes you are right, we do the majority of work but have just appointed our first paid member of staff.

 

[Mr D]

Yes I meant the trustees have overall control.

The role of trustees was already covered in an early post, hence me not mentioning it again.

I co-founded a charity on less than a £1000. And yes you are right, we do the majority of work but have just appointed our first paid member of staff.

Congratulations. In some circles that's seen as a major milestone, getting to the point a paid member of staff is appointed.

 

[ethical PR]

Thank you, yes getting core funding for staff costs is definitely a challenge, it has taken us two years to get to that position, but we do all hold down full time jobs in addition to running the charity and bringing up our families.

 

[O. Julian]

Many charities hold a gala event each year to help raise funds and end up bringing in some of the largest revenue of the year . Through a mix of wealthy donors, corporations that sponsored the event or individual tables, as well as numerous other individuals interested in the cause, Some of hhese Charities can bring in more than £1 million from a fundraising gala

 

[Mr D]

Many charities hold a gala event each year to help raise funds and end up bringing in some of the largest revenue of the year . Through a mix of wealthy donors, corporations that sponsored the event or individual tables, as well as numerous other individuals interested in the cause, Some of hhese Charities can bring in more than £1 million from a fundraising gala

Can bring that in from one night of cheese and wine. If the right approach is made to the right donors by the right people.
Its a particular subset of charity fundraising and the professionals tend to be very expensive.

 

[AccidentalEntrepreneur]

Bottom line is you have to recruit a committee of people to be your bosses and then they have to agree you're the best person for the job and appoint you.

A significant downsite is you probably won't have any union rights.