It's time to spring clean your charity's constitution

January 2017. Back to work, regretting overindulgences, writing resolutions. Aiming to do better, improve your surroundings, your health, or even your life. But enough about me! Aside from all that personal stuff, now is also the best time to dust off your charity's constitution. It'll give you the chance to see if it really reflects how you should be operating to best achieve your aims and objectives. Get it out and dust it down from the back of the office filing cabinet - where it really shouldn’t be! Instead, your constitution should be a live working document, fit for purpose, which all your trustees know and understand. In the SCVO Information Service we see a lot of constitutions. They fall into three main categories - the good, the bad, and the ugly. Hopefully you’ve got a good one. Perhaps you’ve used one of our models? If so, great! But if you think your constitution belongs in the bad or the ugly box, then read on. Here’s some common issues we see time and time again.

Clunky clauses

I see so many constitutions that have incomplete or missing clauses, or even clauses that make reference to others that don’t exist. So have a read through all of your constitution. It has to make sense and be understood by the people who manage and control your organisation.

Trustee remuneration

This can be a thorny issue. Your constitution should be clear about whether any of your trustees can be paid. Note that charity law requires that less than half of charity trustees can be paid.

Voting rights

If you have co-opted members, remember to clarify whether they can vote, and when their term comes to an end.

Number of trustees

It’s good practice to have a minimum of three trustees (essential if you’re a SCIO). If your constitution does not specify a minimum number, then think about amending it.

Do the maths

We come across many constitutions where the minimum number of trustees specified and the quorum needed for a trustee meeting simply do not add up. Make sure you do your maths properly!

Single tier SCIOs

There’s sometimes confusion about single and two tier SCIOs, and some organisations have a single-tier constitution when it’s really not fit for their purpose. For example they have a membership, or the organisation needs to have wider accountability. In a previous blog I covered the differences between single and two tier SCIOs in more detail.

Move with the times

Organisations that have been around for a while may find that their constitution doesn’t accurately reflect how they operate. If you’re a charity, this is a big problem, because you have to ensure you’re sticking to your charitable aims and objectives and working within your powers.

To incorporate or not to incorporate – that is the question

Some organisations that have grown over the years, taken on staff and bought or leased buildings may be unincorporated. This can expose their trustees to personal liability should anything go wrong. If this applies to you, then you need to weigh up your exposure to risk, and have a legal structure that fits your needs.

Final thoughts

I’m sure this has not helped your January blues. But don’t worry, help is at hand If you know your constitution isn’t up to scratch, then we can help! The SCVO Information Service offers up to two hours free legal advice to SCVO members with an income of less than £500,000, which can be used to look at any specific constitutional conflicts you may have Two hours won’t be enough to rewrite the whole thing, but we can certainly help you deal with any specific issues. If you think your constitution could do with a spring clean, give us a call on 0800 169 0022 or send an email to get one of our legal eagles to run their beady eye over it for free.