Establishing a basic set of rules for a small charitable organisation

Introduction

LCF expects all charitable organisations applying for grant funding to have a clear set of rules in place which tells us how the organisation operates. If your organisation does not currently have a governing document in place, or is seeking to establish its independence from an umbrella organisation, then you are advised to use the template below to form a clear set of rules.

Please note, this template is intended for small voluntary (unincorporated) organisations with an income of less than £10,000 per annum. If you intend to register your organisation as a charity with the charity commission, either now or in the future, we recommend you follow their template as this will save you time when you register. You should register with the charity commission if your income is over £10,000 per annum. Their template is located at:

http://www.charitycommission.gov.uk/Library/publications/pdfs/gd3text.pdf

Why it is important to have a set of rules:

· It acts as an “instruction manual” for the Trustees to help run the organisation more efficiently.

· Outsiders, and especially potential funders, will want to see that your organisation operates in a democratic and accountable way. This involves having clear procedures by which decisions are made.

· Without a written understanding people can easily find themselves at cross purposes and the jobs won’t get done.

· It will serve as a reference, and help to resolve problems.


Example set of rules….

Name of Organisation

Example:

The name of the organisation shall be [ ]

Objects

Please include the purpose for which your organisation has been formed. If the organisation is to benefit a particular section of the public rather than the public as a whole, and/or a particular geographical area this should be made clear in the objects

Example:

a) To promote the interests of all residents of [ ] and the surrounding areas of [ ], and to assist in maintaining good relations between all members of the community.

b) To promote social activities for all members of the community.

c) To promote environmental and economical improvements for all members.

d) To work in co-operation with other organisations to achieve the above aims.

Powers

Here you need to include details about the powers your management committee can use to carry out the objects of your organisation.

Example:

In order to carry out the organisation’s purposes, the management committee have the power to:

a) Raise funds, receive grants and donations

b) Co-operate with and support other charities with similar purposes

Management Committee/Trustees

These rules should make it clear how many trustees/committee members there are to be, and how they are to be appointed. It is for each organisation to decide what number of Trustees best meets its needs. However, the Charity Commission suggests that there are not so many that meetings are likely to be unwieldy and decision-making difficult. Nor that there are so few that an unfair burden of work is placed on them. London Community Foundation expects all applicant organisation’s to have at least 3 Trustees and most charities find that between 3 and 9 charity Trustees is adequate.

Example:

a) Committee shall be elected at the Annual General Meeting to carry out the business of the [organisation].

b) The Committee shall have between [3] and [ ] members.

c) The Committee will be made up of a Chairperson, [Vice-Chairperson], Secretary and Treasurer. Roles can be given to other members as the Committee may decide.

d) Vacancies on the Committee arising during the year can be filled by the Committee by co-opting members. These will be subject to ratification at the next committee meeting.

e) Additional co-opted members not exceeding [3] may be appointed who in the opinion of the Committee have special skills or knowledge to contribute to the [organisation].

f) Any Officer or Committee member must declare any relevant personal interest. The Committee shall have the right to determine whether that member shall withdraw, or be allowed to speak but not vote, or be allowed to speak and vote.

g) If a Committee member is absent from [ ] consecutive Committee meetings without apology it shall be deemed that they have resigned.

Meetings and proceedings of The Committee

The Trustees will find it difficult to run their organisation efficiently unless the governing document provides at least a basic administrative framework. The following list of provisions will be helpful for the Trustees.

Example:

a) There shall be a minimum of [ ] (not less than 2) meetings per year.

b) The quorum will be [ ] (not less than 3) members.

c) There shall be an Annual General Meeting held within 15 months of the previous meeting.

d) Not less than 21 day’s notice of the meeting shall be given.

e) Any person wishing to raise any matter for discussion shall give at least [ ] day’s notice in writing to the Secretary of the Committee.

f) Voting at all meetings shall be by a show of hands by Full Members entitled to vote.

g) A simple majority of votes shall carry a decision.

h) Except for elections to the Committee the Chairperson of the meeting shall in the event of a tied vote have an extra casting vote.

i) Persons can be nominated in their absence for any position on the Committee, providing that the nominee’s consent is given.

Finance It is important that clear procedures are in place to manage the financial operations of the organisation. This will help to ensure smoother running and greater transparency and accountability.

Example:

a) The Trustees shall keep proper accounts of all monies belonging to the Association. The Treasurer will be responsible for managing the financial affairs of the Association.

b) All cheques drawn on the account must be signed by at least two Trustees.

c) Annual [audited/independently examined] accounts shall be presented to the Association at the AGM.

d) The funds shall be lodged in a bank approved by the Committee.

a) The income of the organisation, shall be applied solely towards the objects/aims of the organisation as set out in Clause 2 and no payment shall be made to any member or honorary officer except the repayment of out of pocket expenses.

Dissolution Clause There may come a time when, for whatever reasons, an organisation cannot continue operating. A dissolution clause sets out the procedures for winding down the organisation.


Example:

The organisation may be dissolved at any time by a resolution passed by a two thirds majority of those present and voting at a special General meeting of the organisation, provided that any property remains after satisfaction of all debts or liabilities. Such property shall, with Committee approval, be given or transferred to such other institutions having objects similar to some or all of the objects of the organisation.

Most organisations have a governing document in place; this could be a Constitution, Trust Deed or Memorandum and Articles of Association.