Certain supplies by charities are exempt from VAT. This means that although they are business supplies, no VAT is charged and VAT is not recoverable on the related costs (subject to the de minimis rules).
Some of the exemptions are public interest exemptions introduced because they deal with items that benefit society; and successive Governments have taken the view that the person receiving the services should not have to suffer VAT. This, however, means that the person delivering the service – including a charity – has to bear the VAT on the costs directly associated with the services subject to partial exemption rules.
General HMRC guidance on VAT exemption can be found here.