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"How does a charitable organization work?" is a question that interests many people who want to join good deeds or need help themselves. Charitable organizations operate thanks to voluntary contributions from individuals, businesses and international donors, and turn them into real help for those in need.
In this article, we will look at the main aspects of charitable organizations, sources of their funding, and the process of registering a charitable foundation in Ukraine.
How does a charitable foundation work?
A charitable foundation functions as an intermediary between those who are willing to provide assistance and those who need it. How does a charitable organization work in practice? First of all, the foundation defines its mission and areas of activity - it can be helping children, supporting the military, protecting animals, environmental initiatives, etc.
According to the Law of Ukraine "On Charitable Activities and Charitable Organizations ", each charitable foundation has its own management structure, which allows for effective coordination and transparency at all levels. The governing bodies of a charitable foundation include the general meeting of participants, the executive body and the supervisory board.
The general meeting of participants is the supreme governing body of the foundation, which determines the development strategy of the organization, makes key decisions on activities and approves the main areas of work.
The executive body is responsible for the daily activities of the foundation and the implementation of planned projects. It can be either one person (director or president) or a collegial body (board or directorate).
The supervisory board controls the activities of the executive body, monitors the use of funds and the effectiveness of charitable programs. It is mandatory only if the organization has more than 10 members. In foundations with a small number of members, the control function is often performed by the general meeting itself.
An effective charitable organization: how to create a system that really works?
The most important thing is to ensure full transparency of all processes. Responsible charitable foundations regularly report on the use of funds, publish financial reports, and undergo audits. Such openness forms a solid foundation of trust between the foundation, donors and beneficiaries.
The UNITY INTERNATIONAL MOVEMENT charitable organization knows this firsthand, as it has undergone an international audit for compliance with the highest standards of ISO 37301:2021. This is not just a benchmark of integrity in the field of charity, it is a guarantee of protection of donors’ personal and banking data, as well as a commitment to counteract fraud and money laundering at the national and international level.
Another key to the success of any charitable foundation is effective communication. Effective charitable organizations actively interact with their audience through their official website, social media, email newsletters, and media publications. Such a communication strategy allows not only to inform the public about the problems solved by the foundation, but also to attract new supporters, expanding the circle of people willing to support the organization’s noble mission.
What are the ways to generate income for a charitable foundation?
Financial stability is the basis for the effective work of any charitable organization. Therefore, it is important to understand where charitable foundations receive funds for their activities.
The most common source of income is private contributions from individuals. These can be either one-time donations or regular payments. Such contributions form the basis of financial independence of many organizations, which allows them to plan activities, set priorities, respond to challenges and implement long-term programs.
Corporate philanthropy is another important source of funding. Companies often allocate part of their profits to charity or provide goods and services free of charge. For businesses, this is an opportunity to demonstrate social responsibility and improve their image. And for a foundation, it’s a chance to get additional resources, strengthen partnerships, expand the scope of its activities, and increase trust in its work.
How to create a charitable organization that will have stable funding? It is important to diversify your sources of income. Grants from international organizations and foundations can be a significant support for the implementation of charitable projects. Such funds are usually earmarked and require detailed reporting.
The International Unity Movement Charitable Foundation demonstrates the effectiveness of this approach, in particular in the critical humanitarian demining sector for Ukraine. Our team is not just competing for a grant to implement a mine action project from the Italian Agency for Cooperation Development (AICS). We aim to become a catalyst for real change in the country’s long-term recovery by expanding the scope of demining and returning Ukrainians the right to live safely in their own homes.
Charity events, such as concerts, auctions and marathons, not only help raise funds, but also draw attention to the problems the organization is solving. They help to form a community of like-minded people and strengthen ties with the foundation’s supporters.
Some charitable organizations also develop social entrepreneurship - they create products or services whose profits are used for charitable purposes. This helps to reduce dependence on external funding and ensure the sustainability of charitable activities.
What projects does the foundation support?
The areas of activity of charitable foundations are extremely diverse and reflect the current needs of society. For many organizations in Ukraine, charitable assistance to the Armed Forces of Ukraine has become a priority, in particular the question "What kind of drones does the military need?" The foundations are actively raising funds to purchase various types of drones: from reconnaissance drones that help control the situation on the battlefield to strike drones that can destroy enemy equipment worth millions of dollars. Such projects not only bring victory closer, but also save the lives of our defenders.
Medical care for the military and civilians is another important area of charitable activity. Foundations purchase medicines and equipment for hospitals, pay for the treatment and rehabilitation of military personnel and civilians affected by the war. Some charities help evacuate people from the frontline areas, provide basic needs and create decent living conditions.
A special focus of charitable foundations is to help children who have suffered from the war, are being treated for serious illnesses, grow up in low-income or unreliable families, or have lost their parents. These organizations provide not only financial but also psychological assistance, create rehabilitation and socialization programs, and organize educational, cultural, and entertainment events.
Environmental initiatives, animal protection, cultural projects, and support for education and science can also be the focus of many charitable foundations. Each organization determines its priorities according to its mission and available resources.
How does a charitable organization work when distributing aid?
One of the key principles in this matter is targeting - charitable assistance should be provided directly to those who need it most. To do this, foundations conduct needs assessments, analyze the social and security context, and cooperate with local communities, social services, and specialized experts. Based on the information gathered, charitable organizations develop transparent criteria for selecting beneficiaries, as well as monitoring and control mechanisms that help avoid duplication and misuse of aid.
In its activities, the UNITY INTERNATIONAL MOVEMENT Foundation adheres to the principles of compliance management and sustainable development, which is confirmed by the relevant ISO 37301 and SIC.SDGs:2022 certificates. This helps us to provide assistance at the highest level and build reliable partnerships with the community, business and government. This interaction allows us to effectively coordinate charitable projects and achieve long-term impact - strengthening communities, supporting systemic solutions, and ensuring sustainable development in Ukraine even in times of war.
How to register a charitable foundation?
If you are ready to dedicate your efforts to overcoming important social problems, setting up a charitable organization may be the best solution for you.
So, how do you register a charitable foundation in Ukraine? The first step is to define the mission and goals of the organization. A clear understanding of how you want to solve a particular problem will help you develop a strategy for the foundation and attract like-minded people.
For example, the International Unity Movement Foundation formed its mission in response to the critical needs of Ukrainian defenders, namely to systematically provide units with important equipment that increases the military’s chances of survival and effectiveness in the fight against the occupiers.
We implement the mission by achieving specific goals: raising funds for the purchase and supply of modern protective equipment, intelligence and communications for the military, as well as training and providing humanitarian demining specialists with the necessary equipment. This allows the foundation to focus all its resources on achieving measurable results and ultimately become an important link in supporting Ukraine’s national security.
Next, to register a charitable foundation, it is necessary to prepare constituent documents, including the charter and minutes of the constituent assembly. The charter must specify the name and legal form of the organization, the purpose and areas of activity, governing bodies, decision-making procedures, etc. It is important that all documents comply with the requirements of the current legislation of Ukraine.
How to set up a charitable organization from a legal point of view? A charitable foundation is registered with state registrars through administrative service centers or notaries. To do this, you need to submit an application for state registration of a legal entity, a charter, minutes of the constituent assembly and other documents required by law.
After verifying the documentation, the state registration authority enters the organization into the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations and issues a certificate.
The next important step is for the foundation to obtain the status of a non-profit organization. To do this, you need to submit an application to the tax service and provide relevant documents confirming the charitable nature of the organization’s activities.
Another important step in registering a foundation is opening a bank account. This will allow the organization to legally receive donations and conduct financial transactions. To do this, you need to apply to the bank with the constituent documents and a certificate of registration.
Charitable organization: how to create a team of like-minded people?
The success of a foundation largely depends on the people who work for it. It is important to involve specialists from different fields: lawyers, accountants, marketers, fundraisers. At the initial stage, a lot of work can be done on a volunteer basis, but as the organization develops, it is worth forming a staff of permanent employees.
Establishing a charitable foundation is a responsible step that requires not only legal knowledge but also an understanding of the principles of charity, readiness for transparent operations and continuous development. However, the result is worth the effort - the opportunity to help systematically and make this world a better place.
Charitable organizations are a powerful tool for solving social problems and supporting vulnerable groups. By understanding how a charitable organization works, we can more effectively help those in need and contribute to positive changes in society.
If you are a philanthropist or volunteer and are planning to set up your own foundation, remember: you are not alone. Together we can overcome the most difficult challenges and build a better future for everyone.
