Knowledge Centre

1.1 Understand what the organisation's legal form and its structure and rules are.

There are many ways to set up community or not-for-profit organisations: types include non-charitable companies limited by guarantee, community interest companies (CIC)s, credit unions, housing associations, social enterprises, co-operatives, development trusts, charities and their trading arms, and Industrial and Provident Societies. Depending on your purpose and activities, different types of organisation may or may not be possible and they may also offer different tax and legal benefits and challenges.

If you are starting a new organisation, you will probably want to get legal advice to help you choose the right legal form, correct structure and to draw up appropriate rules on how the organisation will operate.

The organisation's rules should cover issues such as how individuals are appointed to the management team, what powers they have and how decisions are taken. The legal form you choose will dictate some aspects of the rules.

Most existing organisations will have written documentation such as a constitution (many are obliged to because of their particular legal form). If a constitution is optional for you, you should consider preparing one to help avoid unnecessary confusion and disputes.

Charities must have a governing document for the charity, as a legal requirement. That must have particular features in it - the exact details will vary depending on the charity's chosen legal from (for example, company, trust, members' association).

1.2 Make sure that you understand and comply with your main legal obligations.

Depending on the organisation's structure, you might be a trustee and/or a director or a member of the management committee. All have similar roles and responsibilities. But if the organisation is unincorporated you have personal liability (which is not applicable in a company).

You will have a legal duty to act in the best interests of the organisation and the community it serves, rather than for your own personal benefit.

The organisation needs to keep proper financial records and will be liable for some tax, even in a charity or a not-for-profit organisation.

You must take steps to protect the health and safety of people affected by your organisation.

If your organisation has paid employees (as opposed to volunteers) you will need to comply with employment regulations, including paying National Insurance and deducting income tax from pay (PAYE).

There may be additional issues to consider - for example, if your organisation works with children, or vulnerable people, you are likely to have to carry out checks on those in contact with them. You should have a named person (and deputy) in charge of this, with a clearly defined role and responsibilities.

1.3 Make sure the organisation is properly insured.

You are legally required to have third-party insurance (at least) for any vehicles and employers' liability insurance if you have any employees.

You should have public-liability insurance to protect you against any claims for harm or damage caused by the organisation.

You are likely to want to insure any buildings and their contents, all major assets and any other valuable items owned by the organisation.

1.4 Make sure you are protected against potential personal liability. This is best done by incorporating the organisation because there is always personal liability in an unincorporated one.

In some circumstances you could be personally liable for the debts of your organisation (for example, if the organisation becomes insolvent). Indemnity insurance may not be effective against this risk.

1.5 If in doubt, take legal advice.

You may be able to get free or subsidised advice: for example, from a supporter of your organisation or through a national association.

2.1 Appoint a chairperson and establish his or her role. This must be done in accordance with the rules in your constitution.

The chairperson typically leads the organisation, setting the agenda and chairing meetings of the management team.

Part of the chairperson's key role is to get the best out of the management team through chairing management meetings effectively (see section 3). It is good to have a written role description for the chairperson.

A skilled chairperson will understand individual members of the management team and what makes them tick. The chairperson will anticipate potential problems and help resolve differences of opinion, both during management meetings and at other times.

Where necessary, the chairperson typically acts as the public face of the organisation.

2.2 Appoint other members of the management team and establish their roles.

Your organisation's rules may specify the composition of the management team and how individuals are appointed. Thse rules must be followed.

Most organisations have a secretary who deals with administrative matters (see section 3) and a treasurer handling the finances (see section 4).

Additional management team members may be wanted to cover particular functions: for example, looking after the premises (if you have any) and roles relating to the services your organisation provides.

A larger management team can help reduce the workload on each individual, but often makes it more difficult to reach decisions.

Management teams work best when each individual has a clearly defined role and responsibilities. The use of written role descriptions is helpful.

2.3 Try to establish the right culture for the management team.

A business-like culture can make the team more effective, but may not suit individuals who prefer the social aspects.

The key to success is to stay focused on the organisation's purposes, as set out in its constitution, and its planned objectives rather than individuals' own pet issues and personal agendas.

Ensure that you are in touch with the community you serve: for example, through user groups, consultative processes or perhaps representatives on the management team.

2.4 Arrange any support and training you need.

Individuals may benefit from management training or specialist training relating to what the organisation does.

You are likely to want specialist legal and financial advice, either for specific issues or on a continuing basis.

A wide range of free and subsidised support is available (see section 7).

2.5 Plan ahead to get new members of the team.

The rules of your organisation may limit how long an individual can be on the management team.

Over time, organisations can become set in their ways or dominated by one or two individuals. New blood can help reinvigorate the team.

Members of the management team may not wish to remain indefinitely. You may find it difficult to replace them; there are many ways to recruit potential future candidates but do plan for succession well in advance.

3.1 Deal with routine correspondence and enquiries efficiently.

The secretary is usually responsible for basic administration such as dealing with enquiries. In small organisations, the secretary can usually handle this from home with their own IT equipment and a minimum of stationery.

Good record-keeping is essential, particularly for handing over the role to a new secretary.

3.2 Make use of technology.

A website can be a good way of building awareness and communicating with supporters and the local community.

Email can be a good way of keeping people informed at low cost.

Arranging secure remote access to the organisation's central computer system is often a good way to control access, assist security and aid efficiency.

3.3 Prepare in advance for management meetings.

Ask members of the management team to submit agenda items in advance rather than bringing up issues at the meeting.

The chairperson and secretary should work together to draw up and circulate an agenda setting out the main issues to be discussed and what decisions are to be sought.

Manage your agenda. Distinguish on the agenda between items for discussion and decision; items for discussion only and items provided only for information (without discussion).

Anyone who needs to provide information (eg a report) should be asked to do this in advance (so that everyone else can read it and be prepared to discuss it).

Discussing any tricky issues or potential problems privately in advance tends to be a better approach than leaving everything until the meeting.

3.4 Hold effective management meetings.

Encourage a business-like atmosphere. Start on time, aim to finish the meeting within a reasonable time (eg an hour) and leave socialising till the end of the meeting.

Follow the agenda. Any new items that come up should be left till last - and if necessary postponed to the next meeting.

A good chairperson will encourage everyone to contribute to the discussion, but to keep their remarks short and to the point.

Effective meetings will reach decisions rather than just talking.

The secretary should take minutes giving a brief outline of the discussions and a clear record of what decisions were taken, who will be responsible for taking action and what the deadline is.

The minutes should be circulated to all members of the management team as soon as possible after the meeting.

Action points should be followed up (eg at the next meeting) to ensure that the agreed actions have happened.

3.5 Delegate.

Things are far more likely to get done if responsibility is delegated to an individual. Let the person who is responsible get on with doing it, rather than 'backseat driving'.

Where necessary, the management team should agree guidelines within which individuals should operate. For example, the management team might set charges for using the village hall, but then leave the secretary free to answer enquiries and take bookings.

This should include giving individuals the authority to spend appropriate sums of money on the organisation's behalf. For example, the secretary might be allowed to order stationery up to a set value.

Ensure you follow the rules in your constitution when delegating.

Put suitable financial controls in place and follow good practice.

3.6 Hold effective general meetings (membership organisations).

Your organisation's rules are likely to require you to hold a general meeting annually, open to all your members. Supporters cannot attend unless your rules allow them to and guests who are not members cannot vote.

The annual general meeting usually includes reports on the past year's activities and finances, votes on any resolutions put forward and the election or re-election of management team members. Your rules may require the presentation of formal annual accounts and reports at this meeting.

Use general meetings as an opportunity to keep your community informed about what you are doing and to encourage people to get involved with the organisation.

The same principles apply to holding effective general meetings as for management meetings. Requiring individuals to submit items they wish to discuss in advance can help prevent the meeting becoming a free-for-all.

4.1 Set up proper financial controls.

The organisation should have its own bank account.

Even if you all know and trust each other, you have a responsibility for ensuring that the organisation's money is properly looked after. Withdrawals and transactions should normally require more than one signature.

You must keep proper financial records. HM Revenue & Customs (HMRC) may want to check them.

If you are a company or a charity there are specific rules and appropriate good practice to follow. See for instance the Charity Commission's guidance on financial controls.

4.2 Ensure that everyone on the management team takes an interest in the finances.

Even though the treasurer is responsible for day-to-day financial management, the management group must understand and monitor the finances and major decisions will need authorisation.

The treasurer should provide regular reports to the management team and highlight any key financial issues they should be aware of.

A good treasurer will produce forward-looking information to help with planning as well as reporting on past financial performance.

4.3 Investigate fundraising opportunities.

Many organisations are funded in part by supporters and/or membership subscriptions.

Other opportunities include fundraising events and trading income from selling products or services. There are many legal, accounting, tax and practical issues to address - ensure you obtain suitable expert advice.

Your legal structure affects how different types of income are taxed. In some cases, you may be able to claim additional tax benefits.

4.4 Produce an annual financial and management report (eg annual accounts and directors' report for a company).

These are likely to be open to the public and legally required.

5.1 Establish your priorities and goals.

Assess where you are now: define the goal you are trying to reach and what resources are available.

Identify your long-term aim: for example, to revitalise the village hall into a community centre that is the hub for locals.

Work out how you will get there and what your interim goals are: for example, recruiting volunteers to help, fundraising, publicity, repair works and so on.

Wherever possible, set specific, measurable goals with deadlines.

5.2 Review your progress.

Check whether you have achieved the goals you set. If not, why not?

If you have achieved your goals, what should your new goals be?

What can you learn from what has happened?

5.3 Stay focused on your overall objectives.

In principle, everything you do should start from this. In practice, it's easy to get caught up with day-to-day issues and lose track of what your organisation is trying to achieve.

Make time to ask yourselves:

• What community do you serve and what services are you trying to provide?
• How do you fit in with other organisations in your local area or providing similar services? What special expertise or resources do you offer?
• How would you describe what your organisation does in one sentence?

6.1 Look for different sources of volunteers.

Many organisations rely on a small pool of existing volunteers - but this limits what can be achieved, and runs the risk of overloading individuals.

Supporters may be willing to get more actively involved - ask them.

Use local volunteer bureaus and other organisations (see section 7). Knowing what you want to achieve will help you identify what volunteers you need.

6.2 Check that volunteers are suitable.

Ask them what their skills and interests are.

If necessary, carry out Criminal Records Bureau checks (for example, if volunteers will be working with children or vulnerable people).

6.3 Give volunteers the information, training and support they need.

An induction pack explaining what your organisation does and your key policies can be very helpful. The pack should include information on health and safety and practical issues such as whether volunteers can reclaim expenses. Make this available electronically to save costs.

6.4 Use volunteers effectively.

Try to give individuals tasks that suit them. Accept that some volunteers may work at their own pace or only be interested in their pet projects.

Keep a watching eye on new volunteers to get a better understanding of what they are good at and how they work.

6.5 Thank and praise volunteers.

A little appreciation can go a long way to motivating volunteers.

Consider ways of publicly recognising what volunteers do for your organisation: for example, an annual volunteer awards ceremony or a thank-you dinner.

7.1 Make the most of existing organisational knowledge.

If you are taking over from someone else, ask them for handover notes and a meeting to pass on their knowledge.

Check through any written constitution, minutes of previous management meetings and general meetings and so on.

7.2 Find organisations that can help you.

Some organisations provide support to community organisations generally: for example, the National Association for Voluntary and Community Action (NAVCA) and Community Matters.

There may be support organisations specific to your kind of organisation. For example, a local sports club may get help from the governing body for their particular sport or from runningsports.

Professional help (eg legal advice) may be available from a supporter of your organisation, or through an organisation such as ProHelp.