Non-profit organisation

afm_2

Hello!

I was wondering if anyone knows who regulates the non-profit organisations? I am suspicious about the procedures of two non-profit organisations that present themselves as supporting a certain cause but in practice are not doing that.
Also, does anyone know where I can find what are the obligations (if any) of these organisations and what kind of identification should be available so that one knows that they are legit?

Thank you!

Savvy_Sue

there's really next to nothing to regulate 'non-profit' organisations. A registered charity has to meet certain requirements, but if they're not registered charities then may not be anything you can do.

What activities are they undertaking?

PlutoinCapricorn

The Charity Commission is the relevant regulatory body for England and Wales. Unfortunately, the fact that a charity has a registration number is no guarantee of efficiency or ethical operation.

Charities that are registered are required to file Trustees Annual Reports if their income is over a certain amount, so you can see how much is spent on the cause. You can also see the trustees' names and a contact address: sometimes Googling them has interesting results.

There have been several threads on here about charities that collect in shopping centres and appear to just use the money to pay themselves salaries: cancer, disasters and children are popular causes for attracting the public's generosity.

It is best to do as much research as possible before giving to an unknown charity. They should have a website that gives full details of their work, including an explanation of why it was necessary to start a new charity when there are already so many existing charities doing the same work.

Wywth

afm wrote: »

Hello!

I was wondering if anyone knows who regulates the non-profit organisations? I am suspicious about the procedures of two non-profit organisations that present themselves as supporting a certain cause but in practice are not doing that.
Also, does anyone know where I can find what are the obligations (if any) of these organisations and what kind of identification should be available so that one knows that they are legit?

Thank you!

It should be obvious from the annual accounts that are required to be filed whether or not a not-for-profit organisation is making a profit

Note that there is nothing to prevent a not-for-profit organisation from generating a surplus.

Savvy_Sue

Wywth wrote: »

It should be obvious from the annual accounts that are required to be filed whether or not a not-for-profit organisation is making a profit

Sorry, but where would accounts be required to be filed for a not for profit organisation which is neither a registered charity nor a limited company?

For example, I'm treasurer of a small walking group. We're not for profit, no paid staff, all volunteers. Apart from presenting the accounts to the members each year, where am I supposed to 'file' my accounts?

I've also run a couple of out of school clubs, again on a not for profit basis, but nowhere to 'file' my annual accounts.

Obviously because everything's always been completely above board, I'd happily show any of these accounts to anyone who asked to see them, but AFAIK there's no 'requirement' to do so.

Wywth wrote: »

Note that there is nothing to prevent a not-for-profit organisation from generating a surplus.

Obviously not.

Pluto's advice is excellent (as ever), but describes the situation for registered charities (and to a lesser extent groups describing themselves as charities). The OP referred to Non-Profit, which isn't the same thing.

IF we get more information about what these organisations are doing then we may be able to offer better advice, indeed we have had a thread about someone collecting in the street for 'charities' and I believe the police were involved. If there's door to door collections going on, licences should be held and ID shown. But since we don't know what activities the OP is concerned about, impossible to know what to suggest.

Wywth

Savvy_Sue wrote: »

Sorry, but where would accounts be required to be filed for a not for profit organisation which is neither a registered charity nor a limited company?

For example, I'm treasurer of a small walking group. We're not for profit, no paid staff, all volunteers. Apart from presenting the accounts to the members each year, where am I supposed to 'file' my accounts?

I've also run a couple of out of school clubs, again on a not for profit basis, but nowhere to 'file' my annual accounts.

Obviously because everything's always been completely above board, I'd happily show any of these accounts to anyone who asked to see them, but AFAIK there's no 'requirement' to do so.

The OP referred to "two non-profit organisations that present themselves as supporting a certain cause"

Most not for profit organisations I know that fall into that category are actually charities and/or limited companies of some type.

Having said that, there are various forms I know of in which a not for profit organisation can be legally established.

These are (and some of these are quite recent as a result of recent changes in legislation):

Unincorporated Association
Charitable Trust
Charitable Incorporated Organisation
Charitable Company
Partnership
Limited Liability Partnership
Limited Company
Community Interest Company
Industrial and Provident Society
a) Bona Fide Co-operative Society (including a Credit union)
b) Society for the Benefit of the Community

With the exception of Unincorporated Association and Partnerships I think all the others need to file accounts at Companies House (and /or perhaps the Charity Commission)

I can't say I know of any Partnership (that does not have limited liability) that claims to be a not-for-profit organisation.

Unincorporated Associations (such as your walking club may be) are membership organisations. Whilst these can essentially make up any rules the members wish, I'm sure most (like your walking club) creates annual accounts and (presumably in line with their rules) share these with their members... as your walking club does.

I'm not sure a school club (unless a membership organisation) is a "non-profit organisation that present themselves as supporting a certain cause" are they?

afm_2

Thank you all for all the information. That's very helpful. I am faced with two problem though:
1. They just say they are non-profit organisations. There are no other identification details available. Should there be anything else?

2. The main problem is not about them using the funds incorrectly. The problem is that they state that they are doing something (which is not completely true) and getting donations for that. However, their procedures are not clear and they have no intention of clarifying them, they claim to be doing things in a way but I found out that's not true, they are using this organisation to help their friends and ignore all other requests, and some other issues. What I wonder is if these organisations have like some kind of legal statement that says that they have to be doing what they claim to do, and that forces them to make it clear to the public how they are doing it.

They are getting thousands of pounds out of people's pockets, there must be something that forces then to show clearly what they do and how, right?

Forgot to say that they rehome a certain breed of cats. They contact anyone rehoming these cats and rescues saying that they will rehome them doing what's best for them and take all of them. But it looks like they rehome them doing what's best for whoever they wish.

Wywth

afm wrote: »

Thank you all for all the information. That's very helpful. I am faced with two problem though:
1. They just say they are non-profit organisations. There are no other identification details available. Should there be anything else?

2. The main problem is not about them using the funds incorrectly. The problem is that they state that they are doing something (which is not completely true) and getting donations for that. However, their procedures are not clear and they have no intention of clarifying them, they claim to be doing things in a way but I found out that's not true, they are using this organisation to help their friends and ignore all other requests, and some other issues. What I wonder is if these organisations have like some kind of legal statement that says that they have to be doing what they claim to do, and that forces them to make it clear to the public how they are doing it.

They are getting thousands of pounds out of people's pockets, there must be something that forces then to show clearly what they do and how, right?

You could try reporting them to the ASA (Advertising Standards Authority) if they are advertising something that you feel is not legal, decent, honest or truthful.

PlutoinCapricorn

The fact that they are not transparent and informative speaks for itself.

I would expect a registration number from any organisation that is seeking funds from the general public, as opposed to collecting from people who know them and can see that they spend the money on the cause.

Where are they getting these thousands of pounds from - is it the general public? What sort of marketing material are they using?

Again, which of the legal vehicles on Wywth's list are they using, or are they just telling people that they are not for profit without actually creating an organisation?

antrobus

If the organisation "say that they rehome a certain breed of cats" and are "getting donations for that" then they are acting as a charity. If you believe that the organisation is raising money under 'false pretences' then that would be fraud and you should report it.

Action Fraud says "Report charity donation fraud to the Charity Commission"

http://www.actionfraud.police.uk/fraud_protection/charity_fraud

Mistral001

They are regulated by the law. What the OP has described is fraud and a police matter. However, it is quite likely that they give a small amount to the charity to keep them on the right side of the law. Many argue that these ways of operating businesses are scams in that you think you are giving say clothes to a charity while in fact it is maybe 95% a commercial enterprise.