This guide may be useful if you are planning to start a new charity in the Bailiwick.
Under the new Charity Law, a charity MUST:
- have one of the defined charitable purposes set out in Schedule 4 to the Ordinance which can be found HERE
- provide a benefit to the Public (this EXCLUDES providing benefit to people who are members of the charity)
Entities that DO NOT take donations from the public DO NOT have to register, and entities that are established purely for the non-financial benefit of members are NOT charities.
Charitable organisations are often set up to commemorate an event, and often to provide a service that is not otherwise provided. Where there is already a service available (whether provided by the States of Guernsey, the private sector, or a charitable organisation), a decision should be made as to whether an existing organisation would be able to widen its remit to incorporate some additional objectives.
So the first thing to consider, therefore, is whether a new charity is really necessary. A good place to start is the internet, where a search of this website may locate another local organisation with similar aims.
Invariably, it would seem preferable to enlarge the aims of an existing organisation, rather than start a new one, especially when considering areas such as fund-raising, and staffing the organisation. Most charities would also benefit from a larger membership (rather than many small organisations, each with a few members).
If you decide that there is a clear need for a new charity (for example, to provide a new service to the island), then there are several areas that require consideration.
Types of Charity
There are generally three types of charitable organisation:
1. A Charitable Trust
Normally applies to small groups, or groups that will not have a general membership. A Trust is run by Trustees and is governed by a Trust Deed. If you wish to establish your charity in a Trust you should consult a Trust firm.
2. A Charitable Company
A Company Limited by Guarantee (often referred to as an LBG) may be desirable for organisations wishing to protect its members and officers (the Directors), as liability is limited to a nominal amount (as stipulated in the company Memorandum and Articles of Association). If you wish to establish your charity in an LBG you should consult a Law firm
3. An Unincorporated Charitable Association
Most charities fall within this group (i.e. they are neither a Trust nor an LBG Company) since it is easier to set up and administer. Normally, an association has a membership who periodically elect members of a management committee to run the organisation and uphold the terms and conditions laid down in its governing document. As an association is unincorporated, there is no protection afforded to the officers should the association not be able to meet its debts.
A specimen pro-forma governing document for an unincorporated charitable association, which has been copied from the UK Charity Commission website and tailored to conform Bailiwick Charity Law 2022 can be found HERE. If you wish to check that this document conforms to the Schedule to Clause 4 of the Law, this Checklist will help.