Charities

Question 1

Why are charities set up?

Answer 1

Charities are set up with the sole purpose of raising money to benefit others.

Question 2

Who is a charities owned, controlled and financed by?

Answer 2

Owned: No individual owner, set up as a trust
Controlled: Board of trustees
Financed: donations, sponsorships, and fundraising events.

Question 3

What are the advantages of charities?

Answer 3

• Charities are exempt from paying some taxes, such as VAT and Corporation Tax.
• There are low wage costs due to volunteers working for free.
• Private companies are more willing to donate to and sponsor charities than ever before as it is good ‘PR’.

Question 4

What are the disadvantages of charities?

Answer 4

• It can be difficult to compete with the large marketing budgets of organisations within the private sector.
• Charities rely heavily on volunteers who may leave for paid work.