Guidance

Trusts and unincorporated associations: changing your governing document

Updated 7 March 2024

Applies to England and Wales

• Publication for Northern Ireland
• Publication for Scotland

Follow different rules for changing your charity’s governing document if it is a:

• charitable company
• Charitable Incorporated Organisation (CIO)
• Royal Charter charity
• charity governed by an Act of Parliament

If your charity is a trust, its governing document is usually a trust deed. It can be a will or a conveyance.

If your charity is an unincorporated association, its governing document is usually its constitution or rules. It will also have members.

Trusts and associations may also have a governing document called a scheme made by the Charity Commission.

You should regularly review your governing document and keep it up to date. This will help to make sure your charity works well now and in the future.

You can amend your governing document, but you must:

• only make changes that are in the best interests of your charity
• follow the right rules to make your changes
• have received Commission authority before certain changes can take effect

You should also:

• keep a record of any information or evidence you have used to make your decision
• if appropriate, consult your charity’s members, beneficiaries and other stakeholders about the change you are making

Use our decision-making guidance to help you to make decisions in a way that complies with your trustee duties. This will also help you to:

• explain your reasons for all changes you make to your governing document
• show that you have acted properly

You must tell the Commission about all changes you make to your governing document.

This guidance is not about changing the type of legal form that a charity takes. For example, from a trust to a Charitable Incorporated Organisation (CIO). If you want to change your charity’s legal form, read our guidance about changing your charity’s structure.

Check if your charity has permanent endowment, designated land or special trusts.

For example, a building which must be used as a school or investments where only the income can be spent.

Check if these assets are included in your charity’s governing document or have a different governing document that says how your charity must use them.

Make sure you understand which governing document you are changing.

The powers you can use

You need to understand the powers you can use to change your governing document. You will use either:

• a power that comes from charity law. In this guidance we call this ‘the statutory power’
• a ‘power of amendment’ set out in a clause in your governing document

Be clear about which power you can use and when. This will help you to follow the right rules.

Whenever you use either power, you must make sure that:

• you use the power correctly
• you make decisions that are in the charity’s best interests

Use our decision-making guidance to help you.

Using the statutory power

All trusts and associations have a statutory power to make changes to their governing document.

If you use the statutory power, certain changes need Commission authority before they can take effect. These are called ‘regulated alterations’, and more information about each of them is included below.

But you can use the statutory power to make most changes to your governing document without Charity Commission authority. For example, changing how your charity:

• appoints trustees
• admits members (if it has a membership)
• communicates with its members
• arranges and runs meetings

Using a power of amendment in your governing document

Before you make your changes, check your governing document to see if it includes a power of amendment.

If you do have a power of amendment, you can choose whether to use this power or the statutory power to make your change.

If you wish to use a power of amendment in your governing document, ensure that you:

• check that it covers the change you want to make
• follow any conditions or steps that it sets out

For example, it may say that the change you want to make must be authorised by:

• the Charity Commission
• a higher than usual percentage of your charity’s trustees or members
• the local community
• a third party, such as your charity’s founder
• a religious authority

A power of amendment in your governing document may allow you to make regulated alterations without the Commission’s authority.

If your charity is a trust, a power of amendment in your governing document must specifically refer to purposes for you to use it to change your charity’s purposes.

Changes the Charity Commission must authorise

If you use the statutory power to amend your governing document, you must ask for Commission authority to:

• change your charity’s purposes
• allow trustees, members, and people or organisations connected to them to benefit from your charity
• change what happens to your charity’s money or property if you decide voluntarily to close it
• change restrictions that make property permanent endowment
• make a change that will affect the rights of third parties
• make a change that would have required the approval of a third party had you made it using a power of amendment in your governing document
• add a power to your governing document to enable you to make any of these regulated alterations without Commission authority

If your charity is an unincorporated association and you are using the statutory power, you should ask for Commission authority before you agree regulated alterations with your charity’s members.

If you use the statutory power to make these regulated alterations, you must have Commission authority before they can take effect.

Changing your charity’s purposes

You should keep your charity’s purposes under review to make sure they continue to be an effective way of using your charity’s money and property.

If it becomes clear that, for example, you cannot further your charity’s purposes effectively, cannot further them at all or cannot further them in part, you must take steps to change them.

For example, a charity’s beneficiary group has reduced significantly over time, and each year it has more and more leftover funds. The trustees of the charity must consider changing the charity’s purposes. One option is to widen the number of people the charity can help.

To understand if you must change your purposes, and what changes to make, consider for example:

• if the needs and situation of your charity’s beneficiaries have changed
• if there are new circumstances that affect who your beneficiaries are, or how you define them
• if there are new circumstances that affect how you work with or support your beneficiaries

Your new purposes need to be workable now and in the foreseeable future.

Your new purposes must be charitable.

You must have Charity Commission authority if you use the statutory power to change your charity’s purposes.

The Commission will only give authority if we are satisfied your new purposes are in the best interests of your charity. The Commission will consider:

• as far as is possible and desirable, whether the new purposes are similar to the original and current purposes of your charity
• the need for the new purposes to be suitable and effective in current social and economic circumstances

You will need to explain to the Commission why you have decided to change your charity’s purposes, including how you considered the two factors above when deciding on your charity’s proposed new purposes.

Keep a record of any information or evidence you have used to make your decision.

Be aware that:

• even small changes to the wording of purposes can affect their meaning and would need Commission authority
• changes to other sections of your governing document can affect your purposes and if they do will need the Commission’s authority. For example, a clause that defines the area where your charity works or who its beneficiaries are

Seek professional advice if you’re unsure about the right steps to follow.

You do not need Commission authority to renumber clauses.

Ask the Commission to authorise a change to your charity’s purposes. The Commission will only give authority if we are satisfied your new purposes are in the best interests of your charity. You will need to explain:

• what your charity’s original purposes were when it was set up (if you know them)
• how the new purposes are similar to the current purposes of your charity, and if not, why
• how the new purposes are suitable and effective in current social and economic circumstances
• the factors you considered when you made your decision
• how the change to purposes is in the best interests of your charity
• how the change will affect your charity’s current beneficiaries
• how you will further the new purposes, including activities your charity will carry out or funding that you have secured
• whether the change may be controversial or of public interest
• how you have consulted (for example, with your beneficiaries) about the change, and taken into account the feedback you received
• how you have managed conflicts of interest

Changing the purposes of designated land

Designated land is land that must be used for a particular purpose according to the document which explains how the land must be used.

Your charity’s governing document may set out the rules about how you can use designated land. Or the land may be held on a separate trust to be used in the way described and have its own governing document.

You must ask for Charity Commission authority if you use the statutory power to:

• change how your charity can use designated land
• sell or lease designated land in some circumstances

This is because these are changes to the designated land’s charitable purposes.

You cannot usually use a power of amendment in your governing document to change how you can use designated land. Use the guidance in the previous section if you want to change the purposes of designated land.

Seek professional advice if you’re unsure about the right steps to follow.

Changes that allow benefits to trustees, members, and people or organisations connected to them

The law allows certain payments and benefits to trustees, such as for:

• their reasonable and legitimate expenses
• providing goods and/or services in some circumstances
• trustee indemnity insurance

If your governing document has a clause that prevents the benefits that are allowed by law, you can amend it to remove the clause.

But if your charity is a trust, you will need the Commission’s authority to do this.

If your charity is an association, you do not need the Commission’s authority to do this unless there is a conflict of interest you cannot manage, such as when:

• the only members of your charity are its trustees, or
• there are not enough members who are not also trustees to vote on the change

You must have Commission authority if you use the statutory power to make changes to your governing document that would allow benefits other than the above to trustees, members, and people or organisations connected to them (‘connected persons’).

For example, to add a new or amend an existing clause that allows your charity to:

• pay a trustee for doing their trustee role
• employ a trustee, member or connected person
• pay (or increase) interest to a trustee on a loan they provide to the charity

It is possible to add or amend a clause that says a benefit would only be allowed with the Commission’s authority. You must have the Commission’s authority to add or amend this type of clause.

It is also possible to add or amend a clause that allows benefits to people or organisations that do not fall in the category of ‘connected persons’ as defined in charity law. You will need the Commission’s authority if, when you decide to make these changes, there is a conflict of interest that you cannot manage.

Seek professional advice if you’re unsure about the right steps to follow or if you’re unsure whether someone is a connected person.

Be aware that some charities must report payments to trustees, members, and people or organisations connected to them in their accounts and annual return, which becomes publicly available information.

Before you make changes, you should read our guidance about:

• trustee payments and benefits
• conflicts of interest

Ask the Commission to authorise these types of changes. The Commission will only give authority if we are satisfied it is in the best interests of your charity. You will need to explain why you are making the change, including:

• what your governing document currently says about benefits
• the factors you considered when you made your decision
• how you have managed the conflict of interest

Changing what happens to your charity’s property when it closes

Most governing documents set out what must happen to a charity’s money or property if you decide voluntarily to close it. This is called a ‘winding-up’ or ‘dissolution’ clause.

You must ask for Commission authority to use the statutory power to change what the dissolution clause in your governing document says about how you can use your charity’s money or property in these circumstances.

Read our guidance about managing a charity’s finances if you are closing your charity because it is in financial difficulty.

Usually, the clause will say that before dissolving you must give your charity’s money or property to charities with the same or similar purposes.

You must have Commission authority if you use the statutory power to add a new clause or remove or amend an existing clause that, for example:

• allows charities with different purposes to receive your charity’s money or property on dissolution
• changes the charities that are currently named in the clause as being entitled to receive your charity’s money or property on dissolution

In some cases, adding or amending a power to merge with another charity may be a regulated alteration to the dissolution clause. Where this is the case, you will need the Commission’s authority.

You do not need Commission authority to add a clause (where your governing document currently does not have one) that says your charity’s money or property will only be used for its purposes on dissolution.

If you add a new or amend an existing dissolution clause in your charity’s governing document, you cannot use it to dispose of any permanent endowment or designated land that your charity has.

Seek professional advice if you’re unsure about the right steps to follow.

Ask the Commission to authorise a change to your charity’s dissolution clause. The Commission will only give authority if we are satisfied it is in the best interests of your charity. You will need to explain why you are making the change, including the factors you considered when you made your decision.

Changing how you can use permanent endowment and special trusts

Put simply, permanent endowment is property that your charity must keep rather than spend. For example, money or other assets given to your charity for investment. Only the investment income can be spent.

Your charity’s governing document may set out the rules about how you can use permanent endowment. Or the property may be held on separate trust and have its own governing document. Be clear about which governing document you are changing so that your changes are valid.

Special trusts are money or property that your charity must only use for specific purposes that are narrower than your charity’s purposes.

If you want to change the purposes of permanent endowment or special trusts, use the guidance set out above about changing purposes and apply for the Commission’s authority.

You can also use the statutory power to change what the governing document says about a restriction that makes property permanent endowment. This is a regulated alteration, and you must ask for Commission authority.

Seek professional advice if you’re unsure about the right steps to follow.

Find out more about permanent endowment.

Ask the Commission to authorise a change to restrictions that make property permanent endowment. The Commission will only give authority if we are satisfied it is in the best interests of your charity. You will need to explain why you are making the change, including the factors you considered when you made your decision.

Changing third-party rights

You must ask for Charity Commission authority if you use the statutory power to change the rights of people or organisations (third parties) who:

• are named in your governing document, or
• hold a position in the charity (other than trustee or member) that is set out in your governing document

For example, a right to:

• be a trustee, such as where a bishop has the right to be a trustee of a diocesan charity
• nominate trustees, such as where a parish council has the right to nominate trustees to a village hall charity
• approve changes to governing documents before you can make them (your charity’s founder may have this right)

However, you do not need Commission authority to change third-party rights if the third party has:

• agreed to the change
• died (if the third party is named in the governing document as a specific individual)
• ceased to exist (if an organisation)

Ask the Commission to authorise a change to third-party rights. The Commission will only give authority if we are satisfied it is in the best interests of your charity. You will need to explain why you are making the change, including:

• which clause you have changed
• who the third party is
• what the third-party rights are and how they are being amended or removed
• if a third party has the right to approve changes to the clause you want to amend or remove
• whether the third party knows about the change and has given their approval for you to make it. If you have not contacted the third party, or they have not given their approval for the change, you will need to explain why
• if the third party has died (if a person) or ceased to exist (if an organisation)
• if the third party is a person, their contact details, such as an email address

A third party’s right to approve your changes: when to ask the Commission for authority

A power of amendment in your governing document may give a third party the right to approve your changes.

If this is the case, and you use the power of amendment in your governing document to make your change, you must ask the third party for their approval.

If you choose to use the statutory power to make the change instead, and the third party either does not or cannot give their approval, this is a regulated alteration and so will need the Charity Commission’s authority.

Adding a new (or amending an existing) power of amendment

You must ask for Charity Commission authority if you use the statutory power to introduce a new power of amendment, or change an existing one, that will enable your charity to make regulated alterations – such as change its purposes – without the Commission’s authority.

The Commission will only give authority if we are satisfied it is in the best interests of your charity.

Public notice

We ask you to tell the Charity Commission if you think your planned regulated alteration may be controversial or of public interest. In certain circumstances, the Commission can ask you to give public notice of your changes. We can also choose to do this ourselves.

How to make changes

Using the statutory power - associations

If your charity is an association, it has a voting membership and you must pass two resolutions. These are:

• a trustee resolution passed by a majority of all your charity’s trustees, followed by
• a resolution of your charity’s members

For regulated alterations, you should ask for authority before you agree the change with any members your charity has. This will save you the costs of organising a meeting to vote on a change which the Commission does not authorise.

A resolution of your members must pass by:

• the agreement of at least 75% of your members at a vote you hold at a general meeting
• the agreement of all your charity’s members if you do not hold the vote at a general meeting. For example, a vote you hold in writing, online or by post

You can also pass a resolution without a vote if there are no objections to the change when you put it to your members at a meeting.

Using the statutory power - trusts

If your charity is a trust, you must pass a resolution by at least 75% of all your charity’s trustees to make your change.

You will need to do this in a meeting unless your governing document allows you to make decisions in a different way.

Using a power of amendment in your governing document - associations

You must pass a resolution with the agreement of a majority of the members unless your governing document sets out different voting conditions.

You must also:

• follow rules in your governing document about when and how you can use the power
• check if other people or organisations are required to vote on changes. For example, a spiritual leader

Check your governing document for rules about how you call meetings and hold votes. This will help you to make sure that your resolution is valid.

Your governing document may also allow you to pass a written resolution.

Using a power of amendment in your governing document – trusts

You must:

• follow rules in your governing document about when and how you can use the power
• check if other people or organisations are required to vote on changes, such as beneficiaries or residents in the local area

Check your governing document for rules about how you call meetings and hold votes. This will help you to make sure that your resolution is valid.

Your governing document may also allow you to pass a written resolution.

Send your signed and dated resolution to the Commission. Your resolution should include the following:

• your charity’s name and registration number
• the exact wording of any clause you have amended
• the exact wording of any new clause you have added
• the date and type of meeting(s) (such as trustee, general or extraordinary meeting) where you passed the resolution(s)
• which power you used: the statutory power or a power of amendment in your governing document
• if passed at a meeting, confirmation that the meeting had the quorum required to make valid decisions
• if passed in another way allowed by the power you used to make the change, details about how the resolution was passed (such as in writing)
• for changes that need authority from the Commission or approval from a third party, confirmation that you have the required authority or approval
• a statement that you have followed any extra rules set out in your governing document

You can use our model governing documents to help you to write your new clause.

Who to tell about changes

You must send the Charity Commission a copy of your signed and dated resolution, containing all the information listed in the previous section.

Do this as quickly as possible so we can keep your charity’s entry on the register of charities up to date.

Tell the Commission about all changes you make.

When changes take effect

Your change may not take effect on the day you pass your resolution.

Use the information in this section to help you work out when your change takes effect.

Changes that do not need Charity Commission authority

Your change takes effect on the day you pass a resolution of your trustees or members (if your charity has members).

The change can also take effect on a later date you set out in the resolution. You may choose a later date, so your change takes effect at the same time as another event, such as the end of the financial year.

Changes that need Charity Commission authority

If you use the statutory power to make a regulated alteration, your change takes effect on the day that you have both:

• the Commission’s authority, and
• passed a resolution of your trustees or members (if your charity has members)

The change can also take effect on a later date you set out in the resolution, but this must be after the Commission gives its authority.

If a power of amendment in your governing document says you must ask for Commission authority to make your change, it takes effect on the day that you have both:

• the Commission’s authority, and
• passed a resolution of your trustees or members (if your charity has members)

The change can also take effect on a later date you set out in the resolution, but this must be after the Commission gives its authority.

You should ask for authority before you agree the change with any members your charity has. This will save you the costs of organising a meeting to vote on a change which the Commission does not authorise.