Elizabeth Balgobin: Charities should consider how to dissolve elegantly

Knowing when to call it a day can be difficult, but it is something charities must carefully consider, writes our columnist

Elizabeth Balgobin
Elizabeth Balgobin

One of the principal duties of a board is to further the objects of the charity while protecting its assets and reputation. But with that duty comes a responsibility to keep the charity going. When you have done all you can, knowing when to call it a day might be the most difficult decision for any board to make, but it is something we should all consider.

The law is clear that a charity can be wound up or dissolved only if certain conditions are met, and most organisations have this covered in their constitution. Many constitutions also contain a requirement to transfer assets to another charity with similar objects. The winding up might happen as the result of a merger or takeover, but charities also close.

Many years ago, I was a trustee of a legal charity that merged with the Terrence Higgins Trust. Funding had changed, and to offer the service to more clients we needed to grow or change in ways that we could not at the time. The reality was that the merger was a takeover. There are not many people now who know of Immunity Legal Services, but the Terrence Higgins Trust is still alive, thriving and providing advisory services, if not the full legal service of old. Times change, and as trustees we have to respond to those changes.

Management duties

More recently, Urban Forum trustees have been taking on more management duties after funding changes affected this quirky and vibrant local membership charity.

The board took the decision first to manage without a director and subsequently to keep the charity going without any paid staff. Trustees would do more and enable members to provide more for themselves and each other through a 'diffused model", using information and communications technology.

Members said they wanted and needed Urban Forum to remain a credible, independent, national voice for community organisations. Trustees took note, and much of last year was spent trying to find ways to deliver that service, particularly through social media and providing information to members. Their efforts were not without some success.

But despite the best of intentions, the relationship with members remained top-down: information flowed from the organisation to the membership, with little evidence that lateral engagements had been developed. The trustee board shrank and the remaining trustees became bogged down in the administrative requirements of the charity, particularly in seeing through redundancies. They also took the time to consider what they wanted to deliver for the next phase of Urban Forum and how best to deliver this.

The will to keep on reflecting the views of community and voluntary organisations with an interest in urban and regional policy has not waned. But the challenge of doing this as part-time, voluntary trustees, along with regular trustee duties, has proved too much. They are tired.

Considering options

At the charity's annual general meeting on 23 January, the trustees presented the membership with a resolution to dissolve the organisation and use the few remaining assets to support the original objective. The trustees had looked at all conceivable options to keep the organisation going, but concluded that this course of action was preferable, taking the view that a managed closure was needed in order to retain the history and learning that has come from Urban Forum. The trustees also wanted to ensure that the resources at their disposal, no matter how small, were used to support the members in the future.

The trustees also asked whether anyone else was willing to take on the role of trustee, bring new ideas to the fore and deliver the objects in the current difficult climate. Some members came forward - evidently, the will to continue the work was still there, although it remains to be seen whether this will provide a viable option. Watch this space.

Elizabeth Balgobin is a charity governance consultant

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