State home a charity set up (7)
I believe the answer is:
indiana
'state' is the definition.
(US state)
'home a charity set up' is the wordplay.
'home' becomes 'in' ('he's home' can mean 'he's in').
'a' becomes 'an'.
'charity' becomes 'aid' (eg foreign aid).
'set up' is a reversal indicator (in a down clue, letters go up).
'an'+'aid'='anaid'
'anaid' written backwards gives 'diana'.
'in'+'diana'='INDIANA'
(Other definitions for indiana that I've seen before include "___ Jones, action hero created by George Lucas" , "US Midwest state" , "State south of Lake Michigan" , "--- Jones, Harrison Ford film character" , "State of southern US" .)