There are nearly 170,000 charities in the UK and the number is growing rapidly, having risen by 40% since 1995. They range from small community-based charities to the international charities that are household names.
Most charities will have funds that they invest to generate income which they can spend on charitable objectives. Charities are required to obtain professional advice on the investment of the funds that they control and so, investment firms will have regular dealings with them whether when giving advice or acting as their investment managers.
Staff working in investment administration will, therefore, regularly come into contact with charity investment accounts and an understanding of the rules surrounding them is needed so that the differences in how they are managed and administered can be appreciated.
13.2 WHAT IS A CHARITY?
Broadly, a charity can be set up for any of the following purposes:
- the relief of poverty
- the advancement of education
- the advancement of religion; and
- other purposes beneficial to the community.
They can be established as an unincorporated association, a limited company or a trust.
Charitable trusts are probably the most common form of charity. Where the charity is set up under a trust, the governing document will be the trust deed or the will creating the trust.
In the case of an unincorporated association, the governing document will be its constitution or rules and if it is set up as a company, its ...