Who are your charity's members and what are they for?

Some forms of charity have Members as well as Trustees. Most commonly these are:

• Unincorporated Members’ Associations.

• Association model Charitable Incorporated Organisations (CIO).

• Charitable Companies Limited by Guarantee (CLG); although sometimes the Trustees and Members are the same people.

The reasons for a charity having a wider membership is usually about accountability of the Trustees to a wider stakeholder or membership group. This can be important for many reasons but the membership needs to be managed carefully and can become administratively burdensome if that it not the case.

In these forms of charity it is important to know:

1. Who are the charity’s Members?

2. What is their role?

The first question may seem trivial, but more often than not we encounter charities who don’t know who their Members are. They may have known once, when they were first set up, but over time it has become a matter of custom and practice (or even mythology) and no proper records have been kept. Moreover, charity’s often call groups of people (or organisations) “members” when they are in fact not the legal members of the charity but rather “friends” or “supporters” of some kind.

Why does this matter?

Here are the main reasons why:

1. It’s a legal requirement to know: for association model CIOs and CLGs there is even a statutory duty for the charity to maintain an up to date register of Members.

2. There are certain things only Members can do: depending on the charity’s governing document this usually includes changing the governing document (often requiring a 75% majority), appointing and removing Trustees and Auditors and deciding to wind up the charity and transfer assets (again often requiring a high majority). If you don’t know who the Members are you can’t do these things securely, which could leave the Trustees open to legal challenges, and personal liabilities, on critical issues.

3. Members have legal duties: it’s not just Trustees who have legal duties, recent case law has established that Members do as well. It’s unfair on anyone to have a responsibility to discharge legal duties if they don’t know they have them and the charity has obligations to support them to do so. The law in this area is still evolving and it is far from clear but the emerging position seems to be that: Members owe a duty to a charity’s purposes (e.g. for CLG Members this is a fiduciary duty and for a CIO it is a statutory duty); a court can direct members how to exercise their votes; and a Member’s duties may be defined by the specific circumstances involved (so they need to know what those circumstances are and be kept up to date with what the charity is doing).

4. Members have legal rights: for example to receive the charity’s annual report and accounts and perhaps more, depending on the charity’s governing document. Not allowing members their rights could leave Trustees open to personal liabilities.

Of course the detailed position is much more complicated and, as stated above, not totally clear as yet, but we hope this short article demonstrates why it is important for any charity with a wider membership to maintain an accurate and secure register of Members and to ensure Members are treated (and used) properly.

To find out more about the issues raised in this article and the governance support and training we offer, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.