A charity is an organisation set up to help society in some way – whether that’s helping certain groups in the UK or elsewhere in the world, promoting arts or sport, or helping the environment or animals.
- A charity’s aims have to fall into categories which the law says are charitable – such as the prevention or relief of poverty, or the advancement of the arts, culture, heritage or science.
- It has to be established exclusively for what is known as public benefit (see below). That means its only purpose must be charitable: it can’t also have the aim of making profit or doing something that isn’t defined as charitable.
- Charities can’t make profits – all the money they raise has to go back towards achieving their aims. A charity can’t have owners or shareholders who benefit from it.
Charities have to state what their charitable objectives are in order to be registered with the Charity Commission, and then explain how they are meeting them in their annual reports, which are publicly available. You can read more about how charities make themselves accountable in the accountability and transparency section.
The concept of ‘public benefit’ determines which organisations can become registered charities. To be a charity, an organisation has to:
- Be of benefit
It has to do positive things, and if there are negative side-effects or consequences, these must be outweighed by the positive work
- Benefit the public, or a sufficient section of them
This doesn’t have to mean all of the public – it could mean everyone in a geographic area, or it could mean everyone with a specific characteristic, such as people with cancer, for example, or everyone who works in teaching.
It’s up to the Charity Commission to decide whether an organisation passes the public benefit test. It does this on the basis of its guidance, and by looking at case law.
Please note that this section of the website refers to the law in England and Wales. There are slight differences in charity law elsewhere in the UK.