Before you start to fundraise, you need to ensure your group has the appropriate legal status. At the very least, you should have an agreed constitution – a written document which explains what your group is set up to do, and the rules which govern how it will operate.
If you do not want to formalise your group in this way, there are alternatives. You could approach an established organisation, such as your local community centre, and discuss whether you can fundraise and operate within their legal structure.
Most community groups are “unincorporated associations”. Typically, this will be a group of people who have come together around a common cause and have a written constitution. They may also have registered as a charity.
Unincorporated associations are supported by a wide range of funders but they actually have no legal identity so cannot, for example, sign a contract or own property. In these cases, individuals are sometimes appointed as “holding trustees” to do so on behalf of the association.
As it is not a legal entity, an unincorporated association can not be held liable for anything. This means that potentially unlimited liabilities fall upon the individual members of the management committee – something that many people are unaware of! For small groups with low risks this is not usually a problem. However, if your group is wanting to own property, sign contracts, employ staff, borrow money or undertake some serious trading, it is time to consider a different and more suitable legal structure, and this is usually a company.
This website only covers fundraising issues and there are many other things to take into account when deciding the legal structure and charitable status of your organisation. Does your community organisation work in Bradford district? Please take professional advice from the Voluntary Organisation Support Officer team.
A model constitution for a small charity is available from the Charity Commission. The document can be edited to suit your group but it is only suitable for groups that have an annual income of less than £5,000 and do not intend to employ staff or sign contracts.
Bfunded recommends making an appointment to see a Voluntary Organisation Support Officer to discuss your draft constitution and make sure that it will work well for your group and meet funders’ requirements.