The Ultimate Guide to Starting a Charity in Scotland and Ireland

Starting a charity in Scotland

In Scotland, establishing a charity can be roughly split into three stages:

1. You need to pass the charity test.

The charity test is the legal set of requirements that an organisation must pass to become a charity and thus be registered in the Scottish Charity register. In order to pass the Charity Test you must show that your organisation:

a) only has charitable purposes

b) that it provides public benefit in achieving those purposes.

Public benefit is what your organisation has to provide in order to satisfy the Charity Test. The OSCR has to be sure that your organisation will make a positive difference to the public.

The Charity Test also states that an organisation can’t become a charity, or keep being one, if:

a) it is set up to be or promote a political party

b) its governing document allows it to use its assest for non-charitable purposes

c) its governing document allows Scottish Ministers to control or direct its activities.

If you’d like to find out more about the Charity Test, check out the OSCR’s full guide here. Their ‘Being a Charity in Scotland’ guidance also provides further information on what is required to pass the test.

2. You need to become a Scottish Charitable Incorporated Organisation, or SCIO.

The Scottish Charitable Incorporated Organisation is a legal form only found in Scotland, a status which allows Scottish charities to enter into contracts, employ staff, incur debts, own property, sue and be sued.

Becoming a SCIO provides a high degree of protection against liability, but there are important differences between a SCIO and any other type of body with a charitable status in Scotland. For example, a SCIO grants an organisation a legal personality, whilst the status of unincorporated association or trust would not. This allows SCIOs to undertake actions in their own rights and means that members are not liable to contribute to the assets if the organisation is wound up.

Before applying to become a SCIO, you should make sure you are fully aware of the requirements for this form of charitable status and double check that it is the right status for you. To find out more about SCIOs, we’d reccomend the OSCR’s SCIO page or their SCIO guide.

If you’ve chosen to become a SCIO you should fill out your application form to the OSCR as such.

3. Apply to the OSCR.

In order to become a charity, you need to log in to the OSCR (after setting up an account) and complete the application form to become a charity.

You’ll need to upload signed and completed trustee declaration forms for each of the propsed charity trustees. If you’re applying to become a SCIO, you’ll need a minumum of three propsed charity trustees to fill out your application. You will also need a draft governing document to upload to the application form. A governing document is the written statement that describes how a charity swill operate alongside its purposes and stucture. The charity trustees must also make sure that the charity follows its governing document if your application to start a charity is successful.

The Scottish Council for Voluntary Organisations (SCVO) has model governing documents for different lgal forms which will usually be acceptable to the OSCR. If you’d like to find out more about the legal forms your charity will need, check out the OSCR’s fact sheet.

If you want to learn more about how to complete the application form, we’d reccomend the OSCR’s guidance in full, which can be found here.

Starting a charity in Ireland

If your organisation wishes to operate in the Republic of Ireland, has exclusively charitable pruposes and provides a clear benefit either in Ireland or in another country, you’re eligible to register as a charity with the Charities Regulator.

To register as a charity in Ireland, her’s what you’ll have to do:

1. Double check that your organisation has an exclusively charitable purpose.

In Ireland, charitable purposes count as: a) the prevention or relief of poverty and economic hardship

b) the advancement of education

c) the advancement of religion

d) any other purpose that is beneficial to the community, which includes but isn’t limited to: the advancement of the arts, sciences or sciences; the protection or the natural environemnt; and the advancement of community welfare.

Your organisation has to have a clear charitable purpose in order to apply, so make sure you take the time to establish and verbalise one for your organisation.

2. Check out the Charities Act 2009.

Before applying for charitable status in Ireland, you should make sure you understand the Charities Act of 2009. As the most recent piece of charity legislation in Ireland, one of its key objectives is to provide better regulation and protection for charitable organisations. The core powers include establishing a public Register of Charities and allowing inesitgations into allegations of wrongdoing.

It also has a list of core duties and responsibilities for charity trustees, relating to financial reporting and governance as legal obligations. As such, the role of trustee should not be entered into lightly.

The full text of the Charities Act 2009 can be found here.

3. Decide if you will be an Incorporated Entity (CLG) or an Unincorporated Entity and prepare your governing document.

As part of your application, you’ll need a governing document which reflects whether you are an Incorporated or Unincorporated Entity.

For the former, the Charities Regulator has cretaed a Model Constitution for Companies Limited by Guarantee to encourage improved drafting of constitutions. You will need to:

– Complete your comapny’s details (in the spaces provided) and provide your objectsm, subsidiary objects and other relevant information.

You can find the ‘Model Consitution – CLG’ here.

For the latter, the Charities Regulator has also developed a Model Constituion for an Unicorporated Entity or Association. You will need to:

– Complete your comapny’s details (in the spaces provided) and provide your objects, subsidiary objects and other relevant information.

You can find the ‘Model Constitution – Unincorporated Entities’ here.

If you decide not to use either of the model constitutions you must make sure that you have, at minimum, ammended your governing document to include the Charities Regulator’s standard clasuses for incorporated or unincorporated entities in order for your application to be processed.

You can find the Standard clauses for Incorporated Entities here and Unincorporated Entities here.

4. Apply for charitable status.

If you’ve complete steps 1 through 3, it’s time to apply by either logging in to an existing account or setting up a new account with the Charities Regulator. Apply to become a charity here.

How can Twenti help?

Setting up a new charity can be a daunting task, especially when it comes to establishing yourself online. Twenti can help with this in a variety of ways – our experts combine digital marketing, SEO techniques and content creation in an effort to improve your online presence continually. We also specialise in nonprofits and start-ups, so if you’d like advice on setting up your charity and its online presence, you can book a free consultation today!

We also offer a free website audit to find out whether you would qualify for a Google for Nonprofits account, so get in touch if that sounds like something you’d like to try!