Here’s a tip if you are applying for charity status.
One of the four structures acceptable to the Charity Commission for England and Wales is the Charitable Incorporated Organisation (CIO). Each CIO must have a written constitution, acceptable to the Charity Commission. The constitution must follow the Commission’s model as closely as possible.
During the application process for CIOs, the Charity Commission asks whether the CIO governing document includes a “provision for entrenchment”, without giving any guidance to what that means.
The regulations that govern the formation of charitable incorporated organisations include a special provision to “lock” all or any part of the CIO’s governing document. This might be helpful if a “lock” would help give assurance to a supporter, funder or community that a charity will not change its governance without following a more stringent process.
The entrenchment provision is not compulsory (and the model documents produced by the Charity Commission do NOT include entrenchment provisions (only one of them refers to the possibility in the notes)). If no special provisions are made, then a 75% vote in favour of the change will be sufficient to amend the constitution.
If you have used the model documents without amendment, you can safely answer “no” to the Charity Commission when it asks during the on-line application process whether the governing document includes a provision for entrenchment.
If you choose to include a lock, then the special wording will need to be carefully drafted to make sure it is clear when the lock applies. Note that the Charity Commission can break the lock at any time, and if ALL members of the CIO decide, then the lock will not apply. Therefore the entrenchment provisions are not foolproof, nor are they permanent – since all the members can remove them at any time if they all agree.
If you need more help with an application for charity status, please contact us.