Crafting A Charity Constitution: A Step-By-Step Guide

A constitution is a foundational legal document that outlines a charity's principles, operational rules, and structural details. It is a statement of what the charity is going to do and how it is going to do it. The process of writing a constitution involves reviewing similar organizations, gathering input, and ensuring compliance with relevant laws. The constitution should include the charity's name, purpose, membership stipulations, board structure, meeting protocols, and asset dissolution procedures. It should also outline how changes can be made to the constitution. It is important to note that the constitution must be acceptable to the relevant charity commission, and there are model constitutions available to guide the process.

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Outline the charity's purpose, work, and where it will be carried out

The constitution of a charity is a foundational legal document that outlines the charity's purpose, principles, operational rules, and structural details. It is a statement of what the charity will do and how it will do it. It is a reference document that helps to resolve problems and ensures that the charity is democratic and accountable.

The charity's constitution should include its charitable purpose, also referred to as its 'objects' or 'objectives'. This statement should outline what the charity wants to achieve and how it plans to achieve it. It should be clear and concise, detailing the area the charity will work in, who will benefit from its activities, and how they will benefit. The charitable purpose must meet one of the 13 or 16 categories listed in legislation, depending on the source.

The constitution should also specify what the charity can do to carry out its purposes, such as borrowing money, and where the work will be carried out. It should outline the belief system of the organisation, its guiding principles, and its moral direction. It should also include any activities that contribute to the growth of the charity's operational processes.

Additionally, the constitution should outline how the charity's assets will be dissolved if the organisation comes to an end. This includes any remaining funds and other assets once outstanding debts have been paid. The constitution must also outline how it can be amended to accommodate changes as the organisation evolves.

Detail the charity's mission, goals, and objectives

A charity's constitution is a foundational legal document that outlines its mission, principles, operational rules, and structural details. It is a statement of the charity's mission and provides a roadmap for governance and decision-making. It is important to have a clear and well-defined constitution as it serves as a reference and helps resolve problems in times of controversy.

The mission of a charity is its purpose or reason for existence. It should outline the charitable purpose, the kind of work it intends to do, and how and where the work will be carried out. The mission should be detailed and clear, providing a comprehensive understanding of the charity's focus and objectives.

The goals of a charity are its long-term objectives or what it aims to achieve and how it intends to achieve it. These should be clearly defined and broadly interpreted, allowing for flexibility and adaptability. The goals should be achievable and realistic, with a clear timeline and measurable milestones.

The objectives of a charity are the specific, measurable, and time-bound activities or steps that will be taken to achieve the goals and, ultimately, the mission. Objectives should be tailored to the charity's specific focus area and target population. They should be realistic and achievable, with clear indicators to measure progress and success.

When detailing the mission, goals, and objectives, it is important to consider the area of work, the target population, and the expected impact. This includes specifying the location of activities, the beneficiaries, and the intended positive outcomes. Additionally, it is crucial to ensure compliance with legal requirements and consider the strategic direction of the charity to create a cohesive and effective constitution.

Specify the charity's name and whether it will have members

When writing a constitution for a charity, it is important to specify the charity's name and whether it will have members. The name of the charity should be reasonably unique and should not be likely to give the impression that the organisation is connected to the government or local authorities when it is not. It is a criminal offence to use the word "Limited" in the name of a voluntary association or trust if the body does not have limited liability. The name should reflect the area the charity is based in, what it is doing, or both. It could also be catchy so that people easily remember it.

The constitution should outline the purpose of the organisation, the kind of work it intends to do, and how and where the work will be carried out. The charitable purpose must meet one of the 13 or 16 categories listed in legislation. The charity's objectives or objects are a statement of its purposes and must be exclusively charitable. These should include information about the area the charity will be working in, who will benefit from its activities, and how they will benefit.

The constitution should also specify whether the charity will have members and who will be entitled to be a member. Membership fees are not required, but they can make it clear who the members are and raise a bit of money. However, they may put people off, and collecting the money can be fiddly. If there is a fee, the constitution should specify whether it will be weekly, monthly, or yearly and how much it will be. In some organisations, people become members automatically when they move into an area, start volunteering, or use the services provided.

The constitution should outline how changes will be made to it. If there are members, they will have to formally approve any changes, typically through a voting procedure. The constitution must also include a dissolution clause outlining what happens to any remaining funds or assets if the organisation closes.

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Explain how the charity will be run, including meetings and trustees

A charity constitution is a foundational legal document that outlines a charity's principles, operational rules, and structural details. It is a statement of what the charity is going to do and how it is going to do it. It is important because it will serve as a reference and help to resolve problems in times of controversy.

The charity's constitution should outline the purpose of the organisation, the kind of work it intends to do, and how and where the work will be carried out. It should also include the charitable purpose, which must meet one of the 13 or 16 categories listed in legislation. The charitable purpose, sometimes called objectives or objects, are a statement of the charity's long-term goals, what it wants to achieve, and how it will achieve it. This should include information about the area the charity is working in, who will benefit from its activities, and how they will benefit.

The constitution should also outline who runs the charity (the trustees) and who can be a member. It should detail how meetings will be held and trustees appointed, and any rules about paying trustees, investments, and holding land. It should also outline the process for closing the charity (dissolution provisions) and what happens to any remaining funds or assets.

The constitution should be clear but flexible enough to accommodate amendments as the organisation evolves. It should also outline how it can be amended. For example, if the charity is registered, permission from OSCR will be needed before making changes, and members will have to formally approve any changes.

Include a dissolution clause, outlining what happens if the charity closes

A constitution is a statement of a charity's aims and rules, outlining what the charity will do and how it will do it. It is important to include a dissolution clause in the constitution, which outlines what happens if the charity closes. This is a statement that explains what the organisation will do with its assets in the event that it dissolves.

The dissolution clause is important because it ensures that the charity's assets are used for charitable purposes, even after the organisation's closure. It is particularly crucial for nonprofits, as their assets are not owned by any person or group. The clause should detail how the charity will distribute any remaining funds or assets after all debts and liabilities have been paid. This could include transferring assets to another charity with similar purposes or simply to another charity, without specifying its purpose. Alternatively, the clause may state that assets must be distributed for charitable purposes more generally, without naming a specific organisation.

In the UK, the Office of the Scottish Charity Regulator (OSCR) requires charities to seek consent before winding up or dissolving. OSCR will only grant consent if the proposed distribution of assets aligns with the charity's dissolution clause. Therefore, it is important to ensure that the dissolution clause is carefully considered and provides sufficient flexibility to accommodate potential changes in circumstances.

It is worth noting that some states do not require dissolution clauses in an organisation's documents when filing for incorporation. However, these clauses are necessary for certain tax exemptions, such as the 501(c)(3) status with the IRS in the US. An example of an acceptable dissolution clause, as provided by the IRS, is: "Upon the dissolution of this corporation, assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose."

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