How to start a DIY charity Want to be a philanthropist? Setting up your own charitable trust may be a lot easier and cheaper than you think

You do not necessarily need to be rich and famous in order to set up a charitable trust of your own. Paul "Gazza" Gascoigne, Barbara Cartland and Cliff Richard have charitable foundations that bear their name, but so, too, do thousands of other pe ople whose names attract no headlines but who have chosen to personalise their philanthropy.

Perhaps surprisingly, there is no minimum capital or income requirement to create a DIY charity. "Anybody could do it - there's no financial barrier to entry," says Clare Maurice, a partner with City solicitors Allen and Overy and the author of a bookleton charity trusteeship. "Realistically, you probably wouldn't go to the trouble of setting up a charity for a modest amount of money," she adds.

Nevertheless, two-thirds of registered charities have annual incomes below £10,000. So could a few thousand pounds be enough to get started?

"If you are just interested in giving money to charity, there are over 170,000 registered charities to choose from. But it doesn't necessarily cost very much to set one up," says Pesh Framjee, head of the charity unit at BDO Binder Hamlyn. "I've set up charities that initially had no money at all."

Charities can be established as registered companies, unincorporated associations or - the most likely option for individuals - as trusts under the control of the appointed trustees. The Charity Commission likes to see at least three trustees, but there is nothing to stop the person creating the trust from being one.

Members of the family or friends can be roped in as well. However, once appointed, a trustee's legal duty is to ensure that the trust meets its charitable objectives. This clearly precludes doing favours back to other family members. "It can be quite an onerous task to be a trustee, more than many people contemplate. Trustees have personal liability for their actions," Ms Maurice says.

Trustees are bound by the aims as set out in the trust deed, which must meet one or more of the four basic charitable objectives: the relief of poverty, the advancement of education, the advancement of religion, or the benefit of the community. Some apparent good causes - ranging from Amnesty International to funds helping individual victims of accidents - may not qualify.

The Charity Commission acts as gate-keeper to the sector, and would-be new charities have to complete a rigorous 15-page questionnaire at an early stage of the application process. (In Scotland, monitoring of new charities is undertaken by the Inland Revenue).

However, the Commission has helped by producing a free model trust deed that charities can adapt to their own use. This means that high solicitors' fees are not essential.

"I helped a small charity in my area that had been charged £800 by a solicitor for its deed, but when I looked at it, it was the Charity Commission model word-for-word," said one charity specialist.

`Once established, there is also the on-going work of administering the charity. This could involve sorting out tax refunds from the Revenue for covenants or Gift Aid donations. It could also mean dealing with the begging letters. "The moment the name ofthe charity goes on the register you can start to receive letters," Ms Maurice says.

The Charity Commission's annual requirements are due to change next year, but smaller charities will be subject only to a "light touch" regime and will not have to submit accounts.

But if running your own charity does not have to result in large bills from professional advisers, settling money in a new charitable trust needs care. Mr Framjee points out that with full tax relief normally available through Gift Aid on donations over £250, it is usually better to give money rather than company shares or property. "Lots of people believe it's better to gift assets when they're setting up a trust, but they're ill-advised."

Even if capital gains tax has to be paid when assets are liquidated, the Gift Aid rebate normally more than covers the tax deducted, he says.

Given the existence of tax relief on Gift Aid donations and charitable covenants, the question, perhaps, is why anyone would want to go to the trouble of the DIY charity approach. "It depends on how egotistic you are," one solicitor says. "People want toplay at being mini-gods," says another. The prospect of philanthropic immortality - assuming the trust has enough money to survive indefinitely - may be an additional factor.

But there is clearly another reason. "People do get enormous pleasure and a great sense of achievement from being trustees. If you get the right people together as trustees, it can be very exciting," Ms Maurice says.

The outline `Guide to Charitable Giving and to Establishing Charitable Gift Trusts' comes with specimen trust deeds and costs £40. From Investment and Tax Publishing Services, 31 Aylesbury Road, Bedford MK41 9RJ.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
Sport
Frank Lampard will pass Billy Wright and equal Bobby Charton’s caps tally of 106 caps against
sportFormer Chelsea midfielder in Etihad stopgap before New York contract
Arts and Entertainment
A scene from Aladdin is performed at the Tony Awards in New York in June
theatreBrit producer Lythgoe makes kids' musical comedy a Los Angeles hit
Sport
Usain Bolt of Jamaica smiles and shakes hands with a competitor after Jamaica won their first heat in the men's 4x100m relay
sport
PROMOTED VIDEO
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
News
i100
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
Kenny Ireland, pictured in 2010.
peopleBenidorm actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Financial Analyst - Forecasting - Yorkshire

    £300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

    Business Architect - Bristol - £500 per day

    £500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

    Regulatory Reporting-MI-Bank-Cardiff-£300/day

    £200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Day In a Page

    Dress the Gaza situation up all you like, but the truth hurts

    Robert Fisk on Gaza conflict

    Dress the situation up all you like, but the truth hurts
    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

    In grandfather's footsteps

    5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
    Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

    Martha Stewart has flying robot

    The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
    Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

    Do women cyclists need 'pootling lanes'?

    Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

    The dining car makes a comeback

    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
    Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

    Gallery rage

    How are institutions tackling the discomfort of overcrowding this summer?
    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

    Eye on the prize

    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
    Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

    Women's rugby

    Tamara Taylor adds fuel to the ire in quest to land World Cup
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices