Charitable Incorporated Organisations (CIOs) – What Structure To Use?

If you’ve read our guides on the differences between charitable trusts and CIOs and CIOs and charitable companies and decided that a CIO is the right way forward, the next decision to make is:

Do you want a foundation model or an association model?

A summary of the two is:

A foundation model is where you expect only the trustees to have a say in running the charity

An association model is where the charity has a wider membership, with some say in the running of the charity but the executive decisions are made by the trustees.

More details:

In a foundation model, although the CIO’s constitution refers to members as well, the members are in fact the same people as the trustees. The same people make the decisions, and approve the accounts. This usually suits a private charity, often making charitable donations rather than running its own services and where fund raising is usually not relevant.

In a constitution model, the trustees are the equivalent of directors in a normal limited company and the members are the equivalent of shareholders in a normal limited company. This means that although the trustees deal with the day to day functioning of the charity the members are entitled to receive and approve the accounts and possibly appoint and remove the trustees. A constitution model might suit a sports club, or a charity set up by a wide group of volunteers to run a drama club or a civic centre.