Charities as Businesses

Charities represent the gold standard of the “Not for Profit” Sector, which is a sector defined by what it does not do. In our experience, that definition can lead to confusion about the role of charities which, whilst they are not established to make a profit, operate as businesses within the wider business community.

In this article, we briefly describe some of the business-type activities of charities and highlight draft guidance to help charities and connected non-charitable organisations work together.

Charities as customers

To state the obvious, charities need the same goods and services as any other organisation.

Charities as suppliers

Charities supply goods and services to individuals, public bodies, not for profit organisations and for profit organisations.

They may do this through the charity itself or through a separate trading subsidiary. They often operate in a highly competitive market place.

Charities as employers

Charities employ staff and in some circumstances are able to employ their trustees and/or people connected to the trustees.

Charities connected to non-charitable organisations

The Charity Commission has consulted on draft guidance for charity trustees in managing relationships between charities and non-charitable organisations to which they are connected. The guidance covers common issues around:-

• Providing funding to the non-charitable organisation
• Receiving funds from the non-charitable organisation
• Completing shared projects or delivering services together
• Involving the non-charitable organisation in fundraising
• Sharing names, branding and websites
• Sharing communications
• Sharing information or data
• Sharing premises or staff

At the date of writing this article, the Commission is considering the responses to the consultation.

A link to a chart summarising the draft guidance can be found in our free Charities Spring Newsletter https://mailchi.mp/6768495e9be1/thursfields-spring-charity-newsletter

Please use this link to subscribe to our charity newsletters to keep up to date on developments on this and other matters relevant to charities https://thursfields.co.uk/newsletter/

Finally, if you would like to discuss any matters relating to charities please contact Jenny Smith, Head of Charities and Not for Profit Sector on 01905 677052 or email jsmith@thursfields.co.uk

Thursfields’ expert Solicitors are available at any of our offices and surrounding areas – Birmingham, Worcester, Kidderminster, Solihull, and Halesowen.