The structure of charity organisations provides for governance designed to protect the organisation's assets and the public's interest in organisations exempted from payment of taxes. Charity organisations accept certain responsibilities and limitations in exchange for tax-exempt status, one of which is to maintain an organisational structure that provides for governance and oversight by a volunteer board.
An organisation should file an application with the Charity Commision in order to gain designation as a non-profit corporation. State laws also define the structure of corporations, which includes governance by a board of trustees. Her Majesty's Revenue and Customs looks to your non-profit corporation's organising documents, or the articles of incorporation, to confirm that your organisation has a charitable purpose that qualifies for tax-exempt status. HMRC also requires a statement in your organising document that disposal of the organisation's property, or dissolution, will not benefit any person.
Board of trustees
The volunteer board of trustees governs the charitable organisation and is the equivalent of a board of directors of a company. The board has a legal responsibility to assume stewardship over your organisation's finances and property. The board ensures that your organisation operates within its charitable purpose. The articles of incorporation and bylaws provide for the seating of board members and the policies for board operations. Many boards establish committees -- such as budget and finance, fundraising, programming, and human resources - to provide oversight and perform the board's work. The board is responsible for hiring and supervising the chief executive officer.
The charitable organisation structure include employees, beginning with the chief executive officer, who reports directly to the board of trustees and who is responsible for managing the organisation's day-to-day and long-range operations. The CEO supervises executive staff, which includes directors or vice presidents of critical operational areas, such as development, finance, programming, operations, and human resources.
Departments and divisions
Your organisation's trustees or vice presidents oversee their departments and usually supervise directors who are responsible for divisions or offices within the departments. For instance, the development office might include fundraising, public relations, and marketing. Budget and finance might include accounting, operations and human resources.
Charitable organisations use different terminology for the board of directors, the chief executive officer, and departments and division. Charitable organisations that have members are governed by their membership through the voting process. HMRC accepts only certain types of charitable purposes for tax exempt status. They include educational, religious, literary, and scientific, for example.