How to start your own charity?

Starting your own charity in New South Wales, involves several steps to ensure compliance with legal requirements and to establish a foundation and purpose for your charitable activities. A general outline of the process involved is provided below:

1. Define Your Mission and Objectives

Mission Statement: Clearly define the purpose and goals of your charity. What issues or causes will your charity address?

Charitable Purpose: Ensure your objectives fall within the legal definition of a charitable purpose, which typically includes relief of poverty, advancement of education, advancement of religion, or other purposes beneficial to the community.

2. Choose a Structure

There are 2 main structures that are utilised for registered charities, being:

• An incorporated association: An entity that is established under the provisions of the Associations Incorporation Act (NSW) 2009, with specific requirements surrounding the number of members required and the establishment of a management committee. The benefit of this structure is that it creates a separate legal entity.
  
• A company limited by guarantee: Alternatively, you may consider incorporating your charity as a not-for-profit company limited by guarantee. This structure provides limited liability for members.
  

3. Develop Governing Documents

Constitution: Both incorporated associations and companies are required to have a Constitution, that outlines the charity's objectives, governance structure, membership rules, and operational procedures.

Compliance: Ensure your governing documents comply with relevant laws and regulations, including state and federal charity laws.

4. Register Your Charity

Australian Charities and Not-for-profits Commission ('ACNC'): Register your charity with the ACNC, the national regulator of charities in Australia. This registration is required for tax concessions and public trust.

Australian Business Number ('ABN'): Obtain an ABN for your charity to facilitate dealings with the government and tax office.

5. Tax and Deductible Gift Recipient ('DGR') Status

DGR Status: Apply for DGR status with the ATO if your charity intends to offer tax-deductible receipts for donations. This status requires meeting specific criteria and eligibility is based on an organisation's purpose.

6. Operational Considerations

Policies and Procedures: Develop policies for financial management, governance, fundraising, and compliance with legal obligations.

Insurance: Consider appropriate insurance coverage for your charity, including public liability insurance and directors' and officers' liability insurance.

7. Fundraising and Public Disclosure

Charitable Fundraising License: Obtain a fundraising license from the NSW Department of Fair Trading in order to have authority to appeal to the public for funds.

Annual Reporting: Comply with ACNC requirements for annual reporting, including financial statements and activities.

8. Seek Professional Advice

Legal and Accounting Advice: We highly recommend consulting with professionals specialising in charity law and relevant financial advisers and accountants to ensure compliance and effective governance for your organisation.

9. Launch and Promote Your Charity

Promotion: Once established, promote your charity's activities in the community to attract supporters, volunteers, and to help achieve your charity's purpose.

Whilst it can be incredibly rewarding, starting a charity involves careful planning, compliance with legal requirements, and dedication to fulfilling your charitable objectives. Seeking professional legal advice and guidance throughout the process can help ensure a smooth establishment and operation of your charity in NSW.

At Kells, we have assisted many charities, and we take the time to understand your charitable needs and deliver solutions and outcomes that will enhance and grow your charity.

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