Charitable status is not a legal structure in itself. It is more like a ‘badge of credibility’, the icing on the cake or the license plate on the car, something which enhances the public profile of your group.
Your group cannot simply choose to call itself a charity. It is a legal offence in Scotland for a group to refer to itself as a charity if it is not on the Scottish Charity Register. Charitable status can only be gained by successful registration with the Office of the Scottish Charity Regulator (OSCR).
OSCR are responsible not only for the registering of new charities, but also for ensuring that charities on the Scottish Charity Register continue to comply with all aspects of the legislation that regulates charities in Scotland - The Charities and Trustee Investment (Scotland) Act 2005.
Not every group is eligible to apply for charitable status. The Charities and Trustee Investment (Scotland) Act 2005 sets out clear definitions for ‘charitable purposes’. Your group should consider whether or not its core objectives (purposes) are likely to be regarded as charitable, and whether or not the activities of your group offer public benefit.
What are the advantages of charitable status?
The ‘badge’ of charitable status and the reassurance that charities are regulated, brings with it a degree of credibility which gives the public confidence in your group. This in itself can also encourage support and public donations.
There are also financial advantages to having charitable status such as:-
the charity may qualify for rates relief from local authorities
the charity can register with HMRC to get tax relief/Gift Aid
some funders will only support registered charities, increasing your group’s possibilities for securing financial assistance
What are the disadvantages of charitable status?
Your group will need to weigh up the many advantages of charitable status against the additional ongoing legal responsibilities and statutory duties of being a registered charity.
Charity Trustee duties
The information in this section has been reviewed by Edinburgh Voluntary Organisations Council.