What do we mean by eligibility?

By law, the National Lottery Charities Board can only make grants to organisations established in the United Kingdom for charitable, philanthropic or benevolent purposes. We must determine whether an organisation fits into one of these categories on the basis of the words used in its constitution rather than on the work it does or plans to do. This legal definition is what we refer to as eligibility.

The Charities Board has also developed policies about the types of organisations and projects that we wish to fund. More details of these policies appear in our application packs and other publications. But an organisation must be eligible before we will consider its application against our policies and programme priorities.

You do not need to be a registered or recognised charity to apply, but you have to be legally eligible.

Is your organisation a charity?

All organisations that apply to the Charities Board must meet our eligibility requirements. In many cases, organisations will have already been recognised as charities in law. This applies to the following:

• charities registered with the Charity Commission in England and Wales;
• charities recognised as such by the Inland Revenue in Scotland and Northern Ireland;
• exempt or excepted charities recognised as such by the Inland Revenue.

If your organisation is registered with the Charity Commission it will be automatically eligible to apply for a grant. If your organisation is recognised by the Inland Revenue because it falls into one of the other categories mentioned above, this is evidence of charitable status but we would still need to check your constitution to make sure.

If your organisation comes under any of these categories, you should quote your charity registration or reference number on your application form and enclose a copy of your constitution.

However, many other organisations are also eligible to apply. Most of this leaflet gives general background about how we decide if other groups are eligible, but you should note that in all cases we have to refer to the complex area of charity law.

Charity law

For an organisation to be a charity it must exist for purposes that the law regards as exclusively charitable. Broadly, a charity must be for the benefit of the public, and all of its objects (or aims or purposes) must be charitable. The law recognises four groups of purposes as charitable:

• the relief of poor, old, sick or disabled people, whether through direct help or, for example, through the provision of equipment or advice;
• the advancement of education, including the support of educational institutions, playgroups, youth organisations, organisations which provide vocational training, and research institutions;
• the promotion of religion (this covers most recognised religions, but it is the Board's policy not to provide support for religious activities such as worship or missionary work);
• other purposes beneficial to the community. This category is not as broad as its name suggests but it includes organisations established for:
  • the provision of land and buildings for public use (including community or village halls, and recreation grounds)
  • the resettlement and rehabilitation of offenders and substance misusers
  • the protection of the environment and the preservation of endangered species
  • the care of sick or neglected animals or the prevention of cruelty to animals
  • the promotion of industry, commerce or art.

Organisations established to provide community recreational facilities may also be charitable.

These are only broad outlines and you should not rely on them alone to develop your organisation's objects. Charity law is complex and you should refer to your local Charities Board office or another agency for further information and advice.

Philanthropic or benevolent organisations

Many voluntary and community groups are unable to satisfy the fairly strict tests for charitable status, but they may still be eligible to apply for a grant as a philanthropic or benevolent organisation.

Unfortunately there are no clear rules about philanthropic or benevolent purposes, but the Charities Board has received legal advice that an organisation can be regarded as philanthropic or benevolent if:

• it is set up and run on similar lines to a charity;
• the majority of its objects or purposes are either charitable in law (see "Charity law" above) or very close to being so;
• it does not permit anyone to make a profit from being associated with it; and
• its purposes are not political or doctrinaire.

If you think that your organisation is benevolent or philanthropic, we will look at your constitution or set of rules to determine whether or not your organisation is eligible. Later in this leaflet, however, we provide information about some special cases and organisations that will always be ineligible.

Your constitution

Your organisation's constitution is the document that the group has adopted to specify how the organisation runs and what it intends to do. It may also be known the set of rules, the trust deed or, in the case of companies, the Memorandum and Articles of Association.

The Charities Board will examine your organisation's constitution to determine whether you are eligible to apply for a grant.

A constitution will normally include the features described below. However, this is not a complete list of the information that you need to write a constitution for your group.

• The name of the organisation.
• The objects of the organisation.
  The objects should explain clearly in precise terms what the organisation does or exists to do. They must not be too vague. The objects must not include any purposes that are incompatible with charity; if they do, the organisation will not be eligible.
• Powers.
  The constitution should give those managing the organisation all the powers they will need to carry out its objects. Ideally the powers should be set out in a separate section of the document. The powers should not permit the organisation to do things that are not charitable, philanthropic or benevolent.
• Details of the governing body, how it is appointed and how it runs the organisation. This should explain how members of the governing body are elected or nominated. It should also set out what additional posts there are (such as treasurer or secretary) and the rules about the conduct and meetings of the governing body.
• Membership.
  Not all eligible organisations have members. If they do, the constitution should explain how people can become members, and the rights and duties that they will have. It should also explain the relationship between members and the group that manages the organisation.
• Dissolution clause.
  This explains what would happen if the group decided to close down. The property of a charitable, philanthropic or benevolent organisation must always be used for the benefit of the public. The dissolution clause should set out what would happen to any funds left over after any debts had been paid. The standard form is to ensure that the net assets are paid to a charitable, philanthropic or benevolent organisation that has the same or similar purposes.

Drawing up or amending your constitution

If you represent a new organisation or one that wishes to update or alter its constitution, please remember that this leaflet is unlikely to give you all the information you need. There are many voluntary sector support agencies who can give advice and more detailed information. Please contact your local Charities Board office for details of local agencies that can help you.

Unfortunately we cannot offer you detailed advice on developing your constitution. We must treat all applicants equally and so cannot become involved in developing individual organisations or applications directly. Please also note that:

• we cannot advise on model clauses or statements
• we can only consider funding applications from organisations that are eligible when they apply; organisations cannot negotiate with us about their eligibility once an application has been submitted.

Most importantly, remember that your constitution should be written to reflect the needs of your organisation rather than the priorities of potential funders. Your local support agencies can advise you on writing a constitution that meets your organisation's needs.

Ineligible organisations

The following are not charitable, philanthropic or benevolent organisations, and so are unlikely to be eligible:

• individuals
• companies that exist to trade and make profits
• health authorities and boards, as well as services and hospitals they manage directly
• local authorities, including institutions and services they manage directly
• local education authorities or education and library boards, including institutions and services they manage directly
• parish and community councils
• private schools or nurseries that do not have charitable status.

You should also note that it is the Board's policy not to fund certain other types of organisation. Further details appear in application packs.

Special cases

Self-help groups

If your organisation exists primarily to benefit individual members rather than the public (or a sufficient section of it) it may be ineligible unless:

• it exists to relieve poverty or to relieve members from the hardship caused by their lack of means; or
• it exists to relieve need arising from sickness, disability or old age, and membership is not closed or exclusive but open to anyone with that need.

The purposes for which your organisation exists should be clear from the objects or purposes clause in your constitution.

Tenants' or residents' associations

Most eligible associations will fall into one of the following categories:

• associations of poor tenants
• associations of tenants with special needs, such as elderly, disabled or sick people
• associations which are primarily for recreation or leisure time occupation (such as providing a community centre or communal facilities).

This should be clear from your constitution or set of rules.

Housing associations

Eligible housing associations are those that provide housing either to:

• meet the need of those in poor circumstances; or
• meet the particular housing needs of, and provide amenities or services to, elderly, disabled or sick people.

This should be clear from the association's constitution.

Credit unions

Credit unions exist primarily for the benefit of their members rather than for public benefit and so will not usually be charitable, benevolent or philanthropic. In a few cases, however, they may be eligible if the common bond of membership is expressed in terms of the relief of poverty.

Further information

For further information contact your local Charities Board office.

National Lottery Charities Board

This information is available in the following languages: Welsh/English bilingual, Arabic, Bengali, Chinese, Gujarati, Punjabi, Somali, Swahili and Urdu. It is also in Braille and on audio tape in English and Welsh.

Published by the National Lottery Charities Board, January 2000.