--- title: "Charity glossary — UK donation terms | CharityCompare" description: "Plain-English definitions of 40 UK charity and donation terms — reserves, restricted funds, CIO, SORP, statutory inquiry, Gift Aid and more." source: https://www.charitycompare.org.uk/glossary retrieved: 2026-08-18T02:36:04.219Z license: "Charity data © Crown copyright, Open Government Licence v3.0" --- Glossary # Charity terms, in plain English 40 definitions for the words you meet on charity profiles, accounts and appeals — from free reserves and restricted funds to CIOs, SORP and statutory inquiries. [Donor guides](https://www.charitycompare.org.uk/guides) [Quick answers](https://www.charitycompare.org.uk/answers) Quick answer Reserves are the free funds a charity could spend if income stopped, usually quoted in months of running costs. Restricted funds are donations given for a specific purpose that cannot lawfully be spent on anything else, while unrestricted funds can cover any charitable purpose including core costs. This glossary defines 40 such terms as they appear in UK charity accounts and on CharityCompare profiles. Search the glossary ## A Annual return The yearly form charities file with their regulator summarising income, spending, trustees and activities. Separate from the full accounts, and the source of much of the data behind a Clarity Score. Audit threshold The income level above which a charity must have a full statutory audit rather than a lighter independent examination — £1m in England and Wales, or £250,000 if gross assets exceed £3.26m. ## B Beneficiary A person or group a charity exists to help. Trustees have a duty to act in beneficiaries' interests, not the organisation's own. ## C CASC Community Amateur Sports Club — a sports club registered with HMRC rather than the Charity Commission. It can claim Gift Aid but is not a registered charity and has no charity number. Cause spend ratio The share of total expenditure going to charitable activities. Used in the Financial Efficiency pillar (20 of 100 Clarity Score points), never as a stand-alone verdict. CCNI The Charity Commission for Northern Ireland, the regulator for charities based in Northern Ireland. Charitable activities Money spent directly on the charity's purpose — care, research, grants, and delivery — as reported in annual accounts. Charity Commission The regulator for charities in England and Wales. CharityCompare also covers OSCR (Scotland) and CCNI (Northern Ireland). Rated Clarity Scores currently need the detailed annual-return fields most often published for England and Wales charities over £100,000 income. CIC Community Interest Company — a company limited by guarantee that trades for community benefit. A CIC is not a charity, cannot claim Gift Aid, and is regulated by the CIC Regulator. CIO Charitable Incorporated Organisation — a charity that is its own legal entity, giving trustees limited liability, but registered only with the Charity Commission rather than also with Companies House. ## D DEC Disasters Emergency Committee — a coalition of UK aid charities that launches joint national appeals after major humanitarian emergencies. ## E Endowment Capital a charity must retain rather than spend, where typically only the investment income may be used. Excluded from free reserves. Excepted charity A charity not required to register with the Charity Commission despite meeting the income threshold — historically including many churches and scout and guide groups. Still a charity in law. Exempt charity An institution such as most universities and some museums that is a charity in law but regulated by a separate body rather than the Charity Commission. ## F Free reserves Unrestricted funds not already tied up in buildings, equipment or other fixed assets — the money a charity could actually spend if income stopped. The basis for reserves expressed in months. Fundraising costs Money spent to raise donations — advertising, events, agency fees. High ratios may trigger a red-flag card. Fundraising Regulator The independent body that sets and enforces the Code of Fundraising Practice in England, Wales and Northern Ireland, and handles complaints about how charities ask for money. ## G Gift Aid A UK scheme letting charities claim an extra 25p per £1 donated if the donor is a taxpayer. Does not affect our scores. Give with Confidence Our badge for charities scoring 75+/100 (4★ Good or 5★ Exceptional on the published star bands) with up-to-date filings and no serious red flags. Going concern An accounting judgement that the charity can continue operating for at least twelve months. A qualified or uncertain going-concern statement is a serious financial warning. Governance costs Spending on running the board, compliance, audit and administration necessary to operate legally. ## I In-kind donation A gift of goods, services or time rather than money — such as donated stock or pro bono legal work. Recorded in accounts at estimated value where material. Income band We group charities by annual income (£100k–500k, £500k–1m, etc.) for fair peer comparisons. Independent examination A lighter-touch external scrutiny of accounts, permitted instead of a full audit for charities below the audit threshold. ## L Legacy A gift left to a charity in a will. Exempt from Inheritance Tax, and the largest single source of voluntary income for many UK charities. ## O Openness Filing on time and publishing a clear trustees’ annual report. Captured mainly in the Accountability & Transparency pillar (40 of 100 Clarity Score points). OSCR The Office of the Scottish Charity Regulator, which regulates all charities based in Scotland. Unlike England and Wales, Scottish charities must register regardless of income. ## P Payroll Giving A scheme letting employees donate from gross pay before Income Tax, so relief is immediate at their highest rate. Gift Aid cannot be added on top. Peer benchmark How a charity compares to others of similar size in the same cause area. ## R Red flag A factual alert on a profile — late filings, sharp income drops, etc. — with a link to evidence on the register. Related party transaction A payment or arrangement between the charity and a trustee, senior staff member or their connected business. Must be disclosed in the accounts; undisclosed ones are a governance concern. Reserves Money held for future work. We show this as months of operating costs where accounts allow. Restricted funds Donations given for a specified purpose that cannot lawfully be spent on anything else, even in a financial emergency. ## S Safeguarding The policies and practices protecting children and adults at risk from harm. Expected of any charity working with vulnerable people, and a Charity Commission priority. SORP Statement of Recommended Practice — the accounting framework charities follow when preparing accounts, which is why charity accounts share a common structure. Statutory inquiry The Charity Commission's most serious formal investigation, opened where there is concern about misconduct, mismanagement or risk to funds. Sets a Clarity Score to 0 automatically. ## T Trustee A person legally responsible for governing a charity and acting in its beneficiaries' interests. Usually unpaid, and named on the public register. Trustees' annual report The narrative document filed with the accounts explaining what the charity did, what it achieved and how it manages risk. The best single source for judging a charity in its own words. ## U UK-wide charity A charity operating nationally or internationally, not limited to one city or region. Unrestricted funds Money a charity can spend on any of its charitable purposes, including core costs and salaries. No terms match that search. ## See these terms on a real charity Every profile shows reserves in months, cause spend, filing record and five years of finances — with the official register entry one click away. [Search charities](https://www.charitycompare.org.uk/charity-directory) [How we score](https://www.charitycompare.org.uk/methodology)