The South West Foundation was set up in 2001 by the Southwestern Housing Society, thanks to a surplus of cash. It was established as a subsidiary to promote and fund community investment. Because its parent company was a housing association, it was set up as an industrial and provident society with a charitable object, not as a charity.
The foundation recently became independent from its parent housing organisation after it was agreed that the purposes of both organisations would be better served by a split.
"Any formal commitment the foundation made had to be sanctioned by two boards - at the foundation and then at the society," says Duncan Wood, a board member at the foundation. "At best it was convoluted, at worst frustrating. Independence will allow us to flourish."
This new-found freedom prompted the board to think about whether being an industrial and provident society, intended to benefit its members, really suited the foundation's purpose.
Hugh Pye, chairman of the South West Foundation, says that because its objects and purposes are essentially charitable, it would be logical for the organisation to register as a charity. The foundation would have had to register with the Charity Commission next year anyway under the new requirement that previously excepted and exempted charitable organisations should register with the commission. Setting up as a charity would pre-empt some of the work ahead.
The move would stress what the foundation is about. "Everyone knows what a charity is, but no one has heard of industrial and provident societies - it's gobbledygook in this day and age," Pye says.
Wood says that the foundation is likely to adopt charitable incorporated organisation status because it offers limited trustee liability.
Wood says that in six years the foundation has achieved a remarkable reputation. By giving it the right structure, the board will ensure it maintains and furthers its contribution to the sector.