Charity Types: Quick Guide to Charities, Trusts and Nonprofits

If you’re thinking about starting a charitable project or you want to give money, you first need to know which kind of organisation fits best. The word “charity” can mean a few different legal structures, and each has its own rules, tax benefits and paperwork. This guide breaks down the main types, points out the big differences, and helps you pick the right one for your goals.

Charity vs. Charitable Trust – What Sets Them Apart

A charity is usually a company limited by guarantee. It has members, a board of trustees and must register with the charity regulator (the Charity Commission in England & Wales, OSCR in Scotland). Charities can run schools, feed the hungry, protect the environment – basically anything that serves the public benefit. They can raise money through donations, grants and events, and they enjoy tax relief on most income.

A charitable trust is a bit different. It starts with a settlor who puts assets – cash, land or shares – into a trust. The trust is managed by trustees who must follow the terms set out in the trust deed. Trusts are often used when the founder wants the money to be used for a specific purpose over a long period, like a scholarship fund. Unlike a charity, a trust doesn’t have members, so decision‑making can be more streamlined, but it also means less flexibility if you want to expand the mission later.

Nonprofit Companies and Other Models

In the UK, many organisations choose the “company limited by guarantee” route and then register as a charity. This gives them a clear legal identity, limited liability for trustees, and the ability to enter contracts. Some groups stay as pure nonprofits without charity status – they can’t claim the same tax breaks but may avoid some of the regulatory workload.

Another option is a Community Interest Company (CIC). CICs are designed for social enterprises that want to make a profit but reinvest most of it back into the community. They’re not charities, so they can pay salaries and still be seen as socially responsible. If you plan to sell products or services while supporting a cause, a CIC could be a good fit.

Choosing the right type matters because it affects how you raise funds, who can sit on the board, and what reporting you have to do each year. For donors, the legal structure signals credibility – many give only to registered charities because of the tax relief and oversight.

Here are three quick checks to help you decide:

• Purpose: Is the goal narrow (like a scholarship) or broad (community health)? Narrow goals often suit trusts.
• Funding: Do you need to tap public grants and tax‑relieved donations? Registering as a charity opens those doors.
• Flexibility: Will you want to change activities later? Companies limited by guarantee give more wiggle room than a fixed trust deed.

Once you pick a type, the next steps are simple: write a governing document (trust deed or constitution), appoint trustees, and register with the appropriate regulator. Most of the paperwork can be done online and costs are low for small organisations.

Bottom line: knowing the difference between charities, charitable trusts and other nonprofit models saves you time, money and headaches. Pick the structure that matches your mission, and you’ll be set to make an impact without getting bogged down in the wrong legal maze.