Before you start a charity

It is a good idea to do some planning before starting a charity. Doing so will help you achieve your goals, as well as identify possible challenges or risks.

This checklist provides an overview of some of the main things to consider.

Do some background research

Focus on what you want to achieve and consider if setting up a new charity is the best way to achieve these goals.

There may be an existing charity or not-for-profit that already does what you want to do, or that may take on your idea as a new project.

Searching the ACNC Charity Register can help you find registered charities that you could support, or perhaps work with on a project. There are also other not-for-profit resources you can find online.

It is important to remember that while there are benefits that come with registration – including charity tax concessions – registered charities also have ongoing obligations they must meet.

Outline your purpose

If you feel establishing a new charity is the best way to achieve your goals, think about what you specifically wish to achieve and your timelines. This will help you decide how you should set up your charity. Consider:

• what the charity will try to achieve
• what its main activities will be
• what programs or services it will provide
• who its target audience will be
• who will benefit from its activities and programs
• why there is a need for this new charity
• how long it will last (will it be for a one-off short-term project or an ongoing long-term venture).

When you set up a charity, ensure it only has charitable purposes. Charities are registered with charity subtypes, which reflect the organisation's purposes.

Consider the resources required

Think about the resources your charity is likely to need – both to start its work and then to cover ongoing costs. Consider:

• whether you have funds or resources already
• what assets you will need - for example, a physical location, equipment, vehicles
• what ongoing costs there will be - for example, utilities, rent, licences, insurance, salaries
• how you will raise money if or when required
• if you will need an ongoing income
• if you need investors
• if you need staff or volunteers, and if so, how many.

In considering these issues, it may be worth seeking financial and business advice.

Consider any fundraising requirements

Charities can raise money in a variety of ways. They include:

• public appeals
• events
• applying for and receiving grants
• charging membership fees
• selling goods or services.

Think about how your charity will raise money.

Decide how your charity will be managed

Thinking about how your charity will be managed is important. It may affect the legal structure that you choose for your charity and will help you focus on the resources you will need. Consider:

• if your charity will need a governing body, such as a board or committee, or trustees
• the kind of governance – rules or practices – your charity will have
• if your charity will have formal processes for things like meetings, making and changing rules, or other decisions
• where your charity will operate from – for example, a dedicated shop front, a home office, or a shared spaced with another organisation.

Visit our Governance Hub for resources to help you govern your charity.

Understand the importance of legal structure

The legal structure you choose for your charity should meet its current needs, as well as allow for future development.

Charities can adopt one of a range of incorporated or unincorporated legal structures, and there may be more than one legal structure that works for your charity.

Your charity's legal structure will affect many things, such as its legal identity and its governance structure.

You will need to decide on your legal structure before you apply for an Australian Business Number (ABN).

When choosing a structure for your charity, ensure you understand the responsibilities that go with it. Your decision on legal structure will need to take into account:

• your charity's size, and how complex its activities will be
• whether your charity will have employees or volunteers
• the accountability your charity will have to its members and the community
• the potential personal liability of members or office holders for actions they take on behalf of the charity
• whether your charity will be applying for government grants
• whether your charity will want to operate in more than one Australian state or territory, or even overseas
• your charity’s eligibility for tax concessions.

The advantage of having a formal (incorporated) legal structure is that you can do things such as rent an office, borrow money, apply for government grants or take out insurance in the name of the organisation (rather than, for example, in the name of an individual committee member).

Each structure has advantages and disadvantages – it is important to balance these against your charity’s particular circumstances and plans. For example, a charity may be able to be incorporated under state or territory laws, but it might not necessarily meet ACNC requirements to be registered as a charity.

Settling on a legal structure is an important decision, so consider getting professional advice early and ensure that advice is specific to your situation.

For more information, see our guidance about legal structures, or the ATO's guidance on not-for-profit legal structures.

Explore other legal and regulatory issues

There are many legal considerations when setting up a charity, and your charity may have to comply with a wide range of laws – including Commonwealth, state and territory laws.

Consider seeking professional advice so you can properly consider your options. You should think about:

• where your charity will operate, and if it will operate or fundraise in multiple states or territories
• whether you be seeking charity tax concessions for your charity
• what other legal obligations will apply – for example, workplace health and safety laws, employment laws and fundraising laws.

Understand your charity’s obligations under the ACNC Governance and External Conduct Standards

To become and remain registered with the ACNC, your charity must comply with the ACNC Governance Standards. If it operates overseas, it must also comply with the ACNC External Conduct Standards.

These standards may require your charity to have certain policies, processes or procedures in place to be eligible for ACNC registration.

Plan how to promote your charity and its work

Think about the kind of involvement you would like from the public and potential investors or donors. Also consider how you will communicate the charity's goals and activities. You should consider:

• how you will promote the charity and encourage people to get involved
• how you will share important information with your target audience
• the main ways you can publicise information
• if you will need a website or other communication tools for the charity.

More information

The resources on this page will help you prepare to register your organisation as a charity, and to understand your obligations to the ACNC and other Commonwealth, state and local regulators.

If you want to apply to register, you should also read our application FAQs and our application checklist and guide.

You can contact our Advice Services team with questions about applying to register as a charity. Please note that we cannot provide legal or other professional advice.

To help you understand if your organisation is eligible for registration as a charity, complete our charity registration self-assessment.