Developing your governing document: guidance for faith-based charities
This is guidance to help you when you are completing key parts of your governing document in preparation for registering as a charity. It is designed for use in conjunction with the Commission’s model governing documents which contain the basic governing provisions which many charities use. Using model documents and agreed forms of words for certain clauses of your governing document may speed up the Commission’s consideration of your registration application. However, it is important to ensure that any standard material you select is suitable for your organisation’s individual circumstances. This guidance is aimed at those organisations whose primary focus is religious worship and associated activities, but the principles are equally applicable to organisations with a mix of religious and secular purposes.
1. How do we set up as a charity?
If you are setting up a charity, you should read our guidance in Registering as a Charity (CC21), Choosing and Preparing a Governing Document (CC22) and Registering as a faith-based charity. On our website you can also find extensive information about which types of organisations can be charities and general advice and guidance about setting up and Registering a Charity. Our Online Application for Registration service provides a quick and easy means of getting the registration application form and governing document to the Commission.
2. What is a governing document?
Before you can start to apply for registration you will need to have a suitable governing document. This is your rule book for the way in which you will operate as well as the legal document which sets up a charity. It contains key information about what the charity is set up to do, how it will do those things, who will run it and internal arrangements for meetings, voting, looking after money etc. Our publication Choosing and Preparing a Governing Document (CC22) gives guidance on the different types of governing document that a charity might use, our recommended standard provisions for governing documents, and the procedure for formally adopting your governing document. Some large national charities produce an approved governing document that can be used by organisations associated with that charity. These approved governing documents contain both agreed objects and administrative provisions that are specific to a particular type of organisation.
3. Which type of governing document should we use?
It is important to choose the most appropriate legal form for your organisation. This will involve consideration of the size of assets, nature of activities and whether or not the organisation wishes to involve a membership as a means of shaping its agenda, objectives and future. Choosing and Preparing a Governing Document (CC22) provides more guidance about this.
4. Why use model governing documents?
We produce model forms of the most common types of governing document:. These are Model Memorandum and Articles of Association for a Charitable Company (GD1), Model Trust Deed for a Charitable Trust (GD2), Model Constitution for a Charitable Association (GD3), and a model constitution for setting up a small charity, income under £5,000. This last form is only available to charities which don’t own a building.
Our models contain administrative provisions which are suitable for each common type of organisation. However, it is still necessary for anyone using those models to insert the objects of the organisation, complete blank spaces left in certain clauses, select some clauses where options are available and to consider the suitability of the clauses generally to the individual circumstances of the organisation.
- adopt any one of the example objects in this guidance or on our website; and
- carry out activities that are consistent with the objects; and
- show that the objects are and will be carried out for the public benefit; and
- show that any private benefit is incidental and properly managed; and
- use one of our model governing documents,
can normally expect to have their application decided on in 15 working days. Other applications will take an average of 30 working days to decide.
Available on the Commission’s website is a range of public benefit guidance including Charities and Public Benefit which explains in general terms what the public benefit requirement means. The Advancement of Religion for the Public Benefit is about how the principles of public benefit set out in Charities and Public Benefit relate specifically to charities concerned with advancing religion.
What are a charity’s objects?
‘Objects’ is the term we use to describe and identify the purpose for which the organisation has been set up. They do not say what the organisation will do on a daily basis.
A charity’s objects must be exclusively charitable. They are usually set out in a single clause or paragraph of the charity’s governing document. If the objects clause allows the organisation to do something which the law does not recognise as charitable, or the wording used is unclear, the organisation is not considered to be a charity and could not be registered with us.
5 (b) What are example charitable objects?
Our model governing documents do not include objects.
We know that preparing the objects of a charity can be very difficult to get right, so we have set out some example charitable objects to help you.
If one of our example objects is suitable for your organisation, you can copy it into the correct part of your governing document. For example, in our model governing documents this will be either clause 3 or clause C.
5 (c) Which advancement of religion clauses should our charity consider?
Advancement of religion
- To advance the x faith/religion for the benefit of the public in accordance with [the statements of belief appearing in the schedule] [the following doctrines: …]
- To advance the x faith/religion religion in [insert area of benefit] for the benefit of the public through the holding of prayer meetings, lectures [public celebration of religious festivals] producing and/or distributing literature on the x faith/religion to enlighten others about the x faith/religion.
The objects should make it clear what religion is being advanced and whom the organisation intends to benefit and how.
5 (d) We would like to include a wider mix of objects to cover all of our activities. Are there other examples we can use?
We recognise that many charities with a religious purpose will undertake wider activity. Some will do so as part of the outworking of their religious purpose, and others will wish to have separate objects directed to other charitable purposes. Our website includes example charitable objects for most activities including the following areas which are common for faith-based organisations:
6. Are there any special clauses that we should consider?
It is important that your governing document is suitable for how you wish the charity to be structured and to work. You may want to include special or complex provisions which are not contained in the models and in that event you should consider asking a legal adviser to help you. We may require more time to consider any such specialist changes.
Many faith-based charities include a statement of faith/belief in their governing document and include provisions which require their trustees and members to demonstrate adherence to this statement. Some faith-based charities use their governing document to define the respective roles of their spiritual leaders and ‘lay’ trustees, to reflect particular approaches to finance, to outline how disputes should be resolved, or to set out a particular approach to amending the document or dissolving the charity.
6 (a ) Should we include a statement of faith/belief?
A detailed statement of faith can be given which describes the particular doctrines, denomination, beliefs or practices to which the organisation subscribes. For example Anglicanism within Christianity, Orthodox within Judaism or Sunni and Shi’a the two main branches of Islam. Having a detailed statement of faith or belief can be helpful in the event of any disagreement about the doctrines or beliefs. In the registration process, statements of faith may need to be checked against the test for whether or not a belief system constitutes a religion for the purposes of charity law.
6 (b) We would like our trustees and members to adhere to our organisation’s beliefs and practices. Are there any special clauses we should consider?
If you require your trustees and members to be of a particular faith or to adhere to particular beliefs or practices you will need to make minor amendments to the models. The clauses to be changed will be those which say how someone qualifies to be a member or a trustee, either as an individual or as a representative of another body.
6 (c) What about dispute resolution?
A dispute can have a negative impact on how a charity operates and needs to be resolved quickly by charity trustees.
Trustees may disagree or there might be disagreement between or within the membership and the trustees. The fact that a dispute exists does not necessarily mean that the Charity Commission will become involved. We expect those involved to have exhausted all other means of resolving the dispute before approaching the Commission. Procedures for resolving disagreements may be stated in the charity’s governing document.
If the actions of trustees are lawful, disagreements cannot be settled in court or by referring the matter to the Charity Commission. Trustees should consider whether a clause stating that disputes should go to mediation is appropriate for their charity. Mediation does involve costs but may mean that disputes are solved before they get out of hand and become a drain on charity resources.
The following example clauses allow for mediation of disputes in the following situations:
- Where there is a disagreement within the membership of a charity about the calling or conduct of elections; or
- In a wider range of dispute scenarios such as disagreements between the trustees or about doctrine.
Membership disputes - elections
- If a dispute arises between members of the charity about the validity or propriety of anything done by the members under this constitution, and the dispute cannot be resolved by agreement, the parties to the dispute must first try in good faith to settle the dispute by mediation before resorting to litigation.
- Where a question arises about the interpretation of this (constitution or other governing document type) or the propriety or validity of anything done or purported to be done under it, that question shall be decided by (insert name of mediator)
- If using this clause, it might be desirable to include a threshold trigger, such as specifying a minimum number of members (or persons claiming to be members) who must request such a decision. The usefulness of this provision also depends upon the availability of a third party who is able and willing to undertake the role of arbiter and who will enjoy the confidence of disputants.
7. What else do we need to consider?
You should read our guidance Choosing and Preparing a Governing Document (CC22) which deals with all of the issues you need to consider in relation to your governing document such as how to put your governing document into operation, choosing your charity’s name and naming the first charity trustees.