What is a charity?
In Scotland, an organisation can only call itself a charity if it is entered in the Scottish Charity Register, published and maintained by OSCR. Only charities that are based in Scotland, or are controlled from Scotland, can say they are a ‘Scottish charity’ or ‘a registered Scottish charity’.
OSCR has powers to take action against those claiming to be charities when they are not.
All charities in Scotland must meet the ‘charity test’. This is set out in law and means that charities must:
- have only charitable purposes
- provide public benefit
- use their funds and property only for charitable purposes
- allow fair access to the benefit they provide
- not be, or exist to advance, a political party.
How are charities set up?
Charities can exist in a number of ‘legal forms’. The legal form is the structure or entity, which then becomes a charity.
Every charity has its own governing document (this can be known as a constitution). A governing document is the document (or set of documents) that sets up an organisation and says what its purposes are. It will usually deal with other matters, including who will manage and control the organisation, what its powers are, what it can do with the organisation's money and other assets, and membership of the organisation.
How must charities behave?
Charities must work to achieve their stated charitable purposes. Charitable purposes are set out in law – for example, the relief or prevention of poverty, the advancement of education – and each charity has a governing document that explains what it exists to achieve.
Charities are run by ‘charity trustees’, those who are in control of the charity and manage its affairs. They may be called directors, management committee members or committee members, but the law considers them to be 'charity trustees'. The charity trustees have clear legal duties to observe, and they must act in the charity’s best interests and aim to meet its stated purposes.
How do charities raise money?
Charities receive income and raise money in a variety of ways.
For example, they may:
- receive grants from public bodies or other charities
- be given a legacy in someone’s will
- be given donations by individual raise money at events, on the doorstep or in workplaces
- sell donated goods send appeals for funds through the post or through email.
An organisation does not have to be a charity in order to raise funds for good causes. Some charities may raise funds themselves or employ companies or individuals to raise money on their behalf.
How does my organisation become a charity?
An organisation seeking to become a charity must apply to OSCR. We will consider whether the organisation meets the charity test.
Our Preparing for your application section takes you through the 10 key questions you must answer before using OSCR’s online application process to become a charity.