Voluntary organisations comprise the bulk of the UK`s non profit sector, and can be defined as self governing bodies that are set up to provide a social benefit - usually by providing some form of help (e.g. advice, support, money, materials, etc) or carrying out some form of community/social action (e.g. an awareness campaign).
The vast majority of voluntary organisations are `charities ` - that is they pursue, for the benefit of the public, aims and objectives which are classed as `charitable` under Charity Law. Such charitable purposes as set out by charity law consist chiefly of :
Although many types of CSAs have a positive impact on the community/society at large, the government particularly recognises the vital role that local sports clubs play in promoting community inclusiveness and, more importantly, health through regular exercise. This contribution has been rewarded through the tax system by enabling local amateur sports clubs to take advantage of valuable tax reliefs by giving them the option to register with: (1) the Charity Commission as a charity under the charitable purpose `the advancement of amateur sport’ or (2), the Inland Revenue as a Community Amateur Sports Club (CASC).
1. the prevention or relief of poverty;
2. the advancement of education;
3. the advancement of religion;
4. the advancement of health or the saving of lives;
5. the advancement of citizenship or community development;
6. the advancement of the arts, culture, heritage or science;
7. the advancement of amateur sport;
8. the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
9. the advancement of environmental protection or improvement;
10. the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;
11. the advancement of animal welfare;
12. the promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services;
13. any purposes not above but recognised as charitable purposes under existing charity law or any purposes that may reasonably be regarded as analogous to, or within the spirit of, any of the above purposes.
Advantages of Voluntary Organisations / Charities
Usually, the founders of voluntary organisations are very keen to register their organisation as a charity because charities enjoy a number of benefits including:
(1) exemption from most forms of direct taxation,
(2) credibility with potential funders / donors and
(3), a great public image.
Disadvantages of Voluntary organisations / Charities
However, charities suffer from the drawback of having to comply with onerous complex charity regulations (e.g. high level accounting and governance procedures) and enhanced public scrutiny.
Charities are also disadvantaged by the fact they are run by volunteer board members called trustees (at least 3) who receive no payment for this for this role unless the constitution of that charity or the Charity Commission permits such payment.
So an owner/ founder who sits on a board of trustees will probably be unpaid and must live with the fact that they can be outvoted on any matter put forward.
This problem can be somewhat diminished if the founder/owner acts as a trustee and becomes a paid employee as, say, the chief executive. This will allow the founder/owner to get paid and wield some influence but, ultimately, he/she can still be out voted (and dismissed) by other board members.
Voluntary organisations can operate and fund their activities by receiving donations from the public and securing grant income from funding bodies and the government.
However, charities can also enjoy the tax free profits any business activity it carries on provided the trading is line with their primary purposes (objectives). For example, a church can carry out primary purpose trading like selling bibles or religious books.
Furthermore, if a charity does wish to carry out any significant non primary purpose trading it could set up a separate trading arm and divert the surpluses from this trading arm back to the charity. In effect, this trading arm will also be a social enterprise.