Voluntary and community early years sector

How to set up a voluntary or community run 'not-for-profit' business.

Committee run organisations

A voluntary management committee are a committed elected group of people who manage a community service. The committee are the employer of the staff who work at the provision and are legally and financially responsible for the business.

Childcare established on a charitable basis must have a voluntary management committee that ensures the objectives and aims of the setting are met on a 'not-for-profit' basis – this means:

  • the outcomes for children and young people are the main focus
  • any profit is reinvested back into the setting

Setting up a new early years and childcare group

If you are thinking about setting up a new early years and childcare group, this information should help you be clear on all aspects from choosing a legal structure and writing a constitution, to opening a bank account and allocating roles and responsibilities.

Constitution

The constitution is your governing document; it is a legal document that explains how you must operate.

Committee roles and responsibilities

All committee members should understand the role of the committee and the specific responsibilities of their designated role.

Registering as a charity

 

Managing finances

Managing the group's finances is a whole group's responsibility. The group will run smoothly if finances are managed well.

Following a set of basic financial rules will help your group be consistent in how you handle money and keep records. The information below provides tools and practical tips on budgeting and planning for the future:

For further guidance on financial issues, including tax, financial planning and invoicing see our financial planning web page.

Safer recruitment and management of staff

In a committee-run setting, the committee as a whole are legally responsible for employing staff, recruiting new committee members and all employment matters.

As employment law changes regularly, it is essential to follow a safe and legal recruitment process. For further information see our staff recruitment web page.

Becoming a Charitable Incorporated Organisation (CIO)

Charitable Incorporated Organisations or CIOs are an alternative legal structure available for charities or charitable groups that wish to be incorporated.

CIOs have been designed specifically for charitable groups, allowing them to register just once with the Charity Commission as an incorporated form of charity which is not a company. This removes the need to register with and report to Companies House.

One of the benefits of becoming a CIO is the reduced administrative burden. In addition to this, the CIO would have its own legal personality and so can enter contracts in its own right, rather than in the name of individual trustees. But many charitable companies convert to a CIO due to the protection of limited liability it provides its trustees.

Charitable companies can convert to a CIO. For further information on how to change your charity structure, for example from unincorporated to a CIO or charitable company visit the GOV.UK website.

Other useful links

The following list contains useful links and resources:

  • ACAS (Advisory, Conciliation and Arbitration Service) - provides free and impartial information and advice to employers and employees on all aspects of workplace relations and employment law
  • Charity Commission - the government organisation that registers and regulates charities in England and Wales.
  • Community Works  - provides support to groups and voluntary organisations
  • Resource Centre - provides an information service, equipment to hire and a self-service print and design service
  • Safety Net – a children’s safety based charity that work with communities and safety networks to improve safety and well-being for children, young people and families at home, school and in their communities