Did you know your governance structure can really affect what types of fundraising you can do? In this blog post, we summarise the key features of some of the most common governance types, and what they mean for your future funding.
- Unincorporated Organisations: These organisations are not registered with the Charity commission or Companies House. Since they lack registration, they are typically ineligible for grants. Instead, they rely on community fundraising and individual donations as their primary fundraising strategy.
- Trusts: Trusts involve a legal arrangement where assets are held by a trustee for the benefit of a charitable purpose. These organisations usually rely on grants as their main source of income.
- Charitable Incorporated Organisations (CIOs): CIOs are legal entities specifically designed for charities, reporting solely to the charity commission. Fundraising for CIOs often involves grants, events, corporate partnerships, and the development of trading income.
- Company Limited by Guarantee: This legal entity is commonly used by charities engaging in commercial activities. The main source of income for these organisations should come from their commercial endeavours. They may also be eligible for grants in some cases.
- Company Limited by Shares: These organisations have shareholders who are entitled to a return on profits generated. They rarely qualify for grants and typically rely on fundraising strategies centered around their commercial activities, crowdfunding, or corporate partnerships.
- Community Interest Companies (CICs): Many social enterprises utilise CICs, which have a specific legal form requiring them to operate for the benefit of communities. These organisations may be eligible for some grants but are often expected by funders to incorporate trading activities within their fundraising strategy to cover core costs.
- Community Benefit Societies: Designed to be owned and controlled by their members, these organisations may apply for grants (if accepted by the funder) but also explore alternative fundraising methods such as crowdfunding or issuing community shares to generate income.
- Co-operative Society: Co-operative societies involve members investing in the company and being issued shares. The primary source of income for these organisations is generated through shares.
To make informed decisions about your structure and funding sources, your organisation will need to have a clear understanding of the available governance options. It is crucial to align the selected governance model with the goals and objectives of the organisation, ensuring a sustainable and efficient approach to fundraising.
If you need assistance in finding the appropriate governance structure, our Community Development and Engagement Advisors are available in your local area and happy to help. Feel free to reach out to us at support@sparksomerset.org.uk.
