Forces charity drops attempt to become charitable incorporated organisation

Forces Children's Trust decides against status change because of the expense of altering its bank accounts and updating marketing materials

Forces Children’s Trust
Forces Children’s Trust

One of the first charities to apply to convert to the new charitable incorporated organisation legal form has decided to remain as a charity.

CIO registration has been open to existing charities with annual incomes of more than £250,000 since March and charities with incomes of between £100,000 and £250,000 since May.

The CIO form allows charities to enter into contracts as corporate entities with limited or no liability for trustees. They do not need to register with Companies House and are not subject to company law. They are registered with and regulated by the Charity Commission.

Forces Children’s Trust registered as a CIO on 1 May, but decided to revert to charity status partly because of the expense of updating all its marketing materials with its new charity number.

The Charity Commission website shows that the regulator is in the process of dissolving the CIO.

Denny Wise, founder and chair of Forces Children’s Trust, said the charity was approached by a private company offering to help it with the CIO registration process, but the company did not explain that the charity would have to change its charity number if it became a CIO.

This would mean the charity, which has been established for nearly 10 years, would have to alter its bank accounts, marketing resources and JustGiving page to reflect the new charity number, which would have cost a lot of time and money, said Wise.

"When you become a CIO you have to change your charity number, which would incur a lot of expense as far as the charity is concerned," said Wise.

When the charity realised it would have to change its number to become a CIO, the charity's trustees decided to discontinue the registration process and keep its original charity number, Wise said.

Despite deciding to return to charitable status, Wise said he thought that the CIO form was a good idea for charities because it provided indemnity for trustees, saving charities from having to pay for trustee indemnity insurance. But in the case of Forces Children’s Trust, it would have cost the charity more in time and money to change to a new charity number, he said.

The commission has registered as CIOs three existing charities with annual incomes of between £100,000 and £250,000 and 10 existing charities with incomes of more than £250,000.

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