Consultation outcome

Annex 3: Annual Return 2023 glossary of terms

Updated 21 December 2022

Applies to England and Wales

Glossary of terms	Definition or meaning
Adults at risk	Any person aged 18 or over who: • has needs for care and support (whether or not the local authority is meeting any of those needs); and • is experiencing, or is at risk of, abuse or neglect; and • as a result of those care and support needs is unable to protect themselves from either the risk of, or experience of, abuse of neglect An adult at risk may have an illness affecting their mental or physical health, have a learning disability, suffer from drug or alcohol problems or be frail.
Affiliated	Officially attached or connected to another registered charity
Connected organisation	Businesses in which a trustee or a family member of a trustee holds at least 20% of the shareholding or voting rights.
Connected party	In broad terms, this means family, relatives or business partners of a trustee, as well as businesses in which a trustee has an interest through ownership or influence. The term includes a trustee’s spouse or civil partner, children, siblings, grandchildren and grandparents, as well as businesses where a trustee or family member holds at least 20% of the shareholding or voting rights. Where a charity is paying a connected party for goods and/or services, or disposing of land to a connected party, the Charity Act 2011 defines what a connected party is at s.188 (for goods and/or services) and s.118 (for land disposals).
Consortium	A formal or informal group of charities who work together in order to support their purposes.
Corporate donor	A commercial body donating to a charity
Custodian trustees	A custodian trustee is a corporation appointed by an unincorporated charity to hold property for a charity. Custodian trustees must act on the lawful instructions of charity trustees.
DBS check	A DBS check is a check employers can make on the criminal record of someone applying for a role. DBS checks are provided by the Disclosure and Barring Service.
Designated funds	Although trustees are legally obliged to use the funds of the charity in the manner specified in the governing document, they may choose to designate or ‘earmark’ some of the charity’s funds for a special purpose within the charity’s objects. These funds are called ‘designated funds’.
Designated land	This is land that must be used only for a particular purpose or purposes of your charity according to your charity’s governing document or the documents which explain how the land must be used. For example, a recreation ground, or a building which must be used for a school. It is sometimes called ‘permanent endowment’ or ‘specie land’.
Dissolved	A charity may dissolve a trading subsidiary if the subsidiary is dormant, no longer trading, or the trustees do not consider operating the trading subsidiary to be in the charity’s best interests. A trading subsidiary can be dissolved by applying to Companies House to be removed from the register and dissolved, or the registrar may strike a trading subsidiary off the register.
Employed vs contracted	‘An employee is someone who works under an employment contract. A contractor is self-employed.
Federated	An organisational structure with a single centralised body that connects a group of organisations each of which keep some internal autonomy. For example, the charity Mind is a federated network.
Formal written agreement	The Charity Commission advises that it is good practice for a charity to ensure that there is a written agreement with any overseas partners. This will usually be in the form of a binding legal contract setting out the nature of the relationship and the respective roles and responsibilities. Further guidance on written agreements with overseas partners and a template agreement can be found on GOV.UK.
Governing document	A charity’s governing document is a legal document that sets out the charity’s purposes and how the charity is run. It is usually in the form of a constitution, memorandum and articles of association, or a trust deed or will.
Holding trustees	Holding trustees are individuals appointed by unincorporated charities to hold property for a charity. Holding trustees must act on the lawful instructions of the charity trustees and in accordance with any provisions in the governing document.
Hosted	A website is hosted in the location of the server that stores the website files
Individual donor	An individual person donating to a charity
Members	All charities have charity trustees, and some charities also have charity members. If a charity has members, their role will be defined in the charity’s governing document. Members may have the right to vote to appoint trustees or other rights relating to charity governance.
One income stream	Regular supply of money from one source. For example: • a Local Authority grant • a grant from a single body such as Heritage Lottery Fund • rental income from properties owned by the charity
Official Custodian	The Official Custodian is a corporation created by statute to hold land on behalf of charities. In practice they are a member of the Charity Commission’s staff who is appointed to this role.
Overseas partner	An organisation or entity based outside the UK that delivers goods and/or services outside the UK on behalf of a charity
Regional member	A separate charity with its own board of trustees linked to a national charity.
Restricted funds	Restricted funds are funds subject to specific trusts that fall within the wider purposes of the charity. Restricted funds may be restricted income funds, which are spent at the discretion of the trustees to further a particular aspect of the purposes of the charity, or they may be endowment funds, where the assets must be invested, or retained for actual use, rather than spent. More information about charity fundraising can be found on GOV.UK.
Trading subsidiary	A company owned and controlled by one or more charities set up to trade. The purpose of a trading subsidiary is usually to generate income for its parent charity, for example a coffee shop in a museum.
Trust	A trust is a legal relationship whereby assets are placed under the control of one or more trustees for the benefit of one or more beneficiaries, or for one or more specified purposes.
Umbrella body	A central, coordinating organisation that represents a group of smaller, independent charities.