Brief Note On Registering a new type of charity
A charity is an institution or fund established and operated for altruistic purposes that the law regards as charitable. A charity must be an entity.
It must be:
- a not-for-profit organisation
- for the public benefit, other than when the charitable purpose is the relief of poverty
- for a charitable purpose – eg:
- health services and research
- help for disabled, sick, poor, destitute or unemployed people and their families
- war relief for anywhere in the world
- help for current or past members of the armed forces and their families
- helping animals.
Collecting for Charity
Collecting for charities can include:
- collecting money or property, such as door knock appeals or online fundraising
- charging admission for an entertainment event
- selling items like badges, ribbons or second-hand goods
- a bequest, or other grants of money or property to a charity.
A Charitable Authorised Investment Fund (CAIF) is a form of collective investment scheme which is authorised by the Financial Conduct Authority and also authorised by and registered as a charity with the Commission. Plans to introduce a new fund structure for charities were announced in the 2015 Budget announcement and the Commission worked with a group of external stakeholders to establish a model structure for such funds which was announced in October 2016.
Although charitable collective investment arrangements were already available, in the form of common investment funds (CIFs), CAIFs offer the advantages of FCA authorisation and regulation, and the ability to operate as a unit trust, a widely recognised fund structure. Since the model was announced, we have worked hard to develop and update our approach to the registration and regulation of CAIFs, and Sarasin Charity Authorised Investment Funds is now the first CAIF to be registered by us.
Looking forward, we anticipate that much of the demand for setting up these funds will come from fund managers of existing CIFs. CIF managers have already expressed enthusiasm for the new structure, which will allow them to transfer existing CIFs into a new, FCA-authorised investment fund and continue to serve their charity clients.
The Commission has been working with other parties including FCA and others for a number of years on the establishment of authorised investment funds which can be recognised as charities. The initiative will benefit charity investment funds, and ultimately the whole charity sector, by allowing for a fully regulated fund structure specifically devoted to investment by charities, so we’re delighted to have registered the first of what will hopefully be many CAIFs.
Anyone wanting to enquire about the setting of new CAIFs or the conversion of CIFs into CAIFs should contact our Charitable Status Legal team, at firstname.lastname@example.org.