A charitable organization is set up for benevolent, communal philanthropic or for any other purposes (Institute of Fundraising, 2009). These organizations are not for profit organizations. They have to use their surplus or any profit for the purpose of the organization. Such charitable organizations do not belong to or do not form a part of any government department, local agency or another legal body (NCVO Voluntary organization, 2005). Actually all the charities in the UK are voluntary organizations, but the same thing cannot be said of all voluntary organizations as being charities.Charities can be formed in different ways. They are:
- An unincorporated association,
- A trust
- A company limited by guarantee.
A charity formed in different ways will have different structures of management. For instance when a charity is formed as a company that is registered then it will have a board of directors to look after the functions of the charity. If a charity is set up as a trustee then it will be managed by a board of trustees. Whatever be the form of a charity it is a must that they must have a document that lays down the objects of the charity and how it will be administered.Purpose of a charity
If a voluntary organization wants to function as a charity then it must have objectives that must be charitable. Each and every purpose or objective of the charity has to be charitable because a charity cannot have some of its goals as charitable while some which are not (Charity Commission for England and Wales, retrieved December 12, 2009).According to the Charities Act 2006, the following are the list of charitable purposes:
- “the prevention or relief of poverty
- the advancement of education
- the advancement of religion
- the advancement of health or the saving of lives
- the advancement of citizenship or community development
- the advancement of the arts, culture, heritage or science
- the advancement of amateur sport, etc.