In being a bit thick and not understanding registered charities?

[porcine]

I mean who pays the employees? Where do they get their income? Why are certain businesses "charities"?
Its all very confusing to me.

Am I right in thinking its all a big tax lark?

Yes it's mostly (but not entirely) a tax lark.

Do people who run these charities charge for services? I went past one the other day that wasa youth training faciloity and wondered where they get their income from?

Basically, registered charities are legit. It means they can be regulated by the Charity Commission. It also means they receive certain tax benefits.

The people who run charities cannot take profit out of the charity. Of course they are run by paid employees - if all charities were run by volunteers, not paid employees, not very much would get done.

Charities receive their income from all sorts of sources (govt, fundraising, trusts etc) and in some cases acting as a business by charging people for their services.

...they also have to declare their books...so the whole process is open....

Guiding is run by all volunteers....

Its not a tax lark at all its a way to try and ensure that any money you donate is properly used.

There are strict reporting and auditing rules as well.

It doesn't mean that there will never be a rotten charity but registration is there for your protection.

As squeaver says different charities will have different sources of income and obviously need to spend some of it on staff

Yes of course, Punk, but the Girl Guides Association, for example, is run by paid employees.

So YANBU in not understanding the registration but YABU to think its some kind of con.

Hope that helps

It regulates how these organisations operate and how they declare their finances. It also means that nobody can take profit from the business. They have to be open to scrutiny, and operate in a certain way. Charities can be 'staffed' or run by paid staff or by volunteers, or like most, a mixture of both.

Your example of a youth training facility, probably gets some government grants, some grants from the local council/community/business community etc. and some might be fundraised. Some charities are run on almost all donations, whilst others rely very heavily on grants. A big high profile charity like for example Cancer Research will receive most of its money from a combination of individual donations, money left to them in wills etc. and probably pharmaceutical company donations. A small local non-high profile charity like the one you mentioned will probably exist almost solely on council grants or similar.

D

I work for a small, local, non-high profile registered charity. We have 2 PT employees and a board of volunteer trustees.

We have a 'rule' that wages, expenses (post, running Tshirts, letterheaded paper etc) should not exceed 15% of monies donated.

All our accounts are audited, and we are open to scrutiny from The Charities' Commission.

We are far from a tax fraud, make a big difference to the people we aim to help, and receive donations precisely because we are registered, above board, small, and because people can see that the vast majority of our money (bar wages etc as above) is used to great effect.

We also have a few lovely highish profile patrons who believe in what we do.

And we get grants from charitable trusts, businesses, individuals and from organised sponsored events, such as the 5K run in Hyde Park in September.

You local school, playgroup and maybe PTA are probably all charities. It really is an issue of where any excess income will go, and is regulated by the charities commission.

Maybe the US phrase "non-profit" is a better and clearer description. Charities are not allowed to make a profit, and are strictly regulated by the Charity Commission.

a lot of "employees" are volunteers!

ah thanks for this....i didnt realise these organisations could charge for services and was lost as to where the income came from.

Charities are "not for profit" so any surplus of income over expenditure is retained within the charity for use in future according to the purpose of the charity.

There are no shareholders (owners) of a charity so there are no dividends- in a company, the surplus would be paid out to the shareholders as dividends.

Charities largely get funds from grant making trusts, government grants, legacies, donations and their own fund raising events.

Many charities do have paid employees- some have staff purely as an admin function- others have staff who carry out the objectives of the charity (e.g. Advocacy charities).

Charities should file annual accounts and an annual return with the Charities Commission but tbh, adherence is very poor- only about 20% of charities meet best practice deadlines of filing within 10 mths of year end.

If a charity is registered then its a legitimate charity complying to certain rules and regulations.
The Charity Commission is the Body in England and Wales
In Scotland its a seperate body, the office of Scottish Charity Regulators which was set up around 2005
We'd had fairly lax regulation up til then, a couple of charities collapsed in scandal, in one case it was alledged that one fundraiser was paid over half the charity's income