Becoming a CIO

Guidance for Men’s Sheds from the Charity Commission

The following information has been produced in collaboration with the Charity Commission to further help Men’s Sheds understand and navigate the process of registering their Shed as a CIO. It provides simple answers to a range of frequently asked questions.

Are Men’s Sheds Charitable?

Men’s Sheds may take a variety of forms and some of these will be built on exclusively charitable activities, and therefore the Sheds may be established as charities.

The Charities Act says that a ‘charity’ is an institution which is:

• established for charitable purposes only, and
• subject to the control of the High Court’s charity law jurisdiction.

To be a ‘charitable purpose’ (as defined in the Charities Act) it must:

• fall within the descriptions of purposes in the Charities Act, and
• be for the public benefit – the ‘public benefit requirement’

The public benefit requirement applies to each of an organisation’s purposes. A charity cannot have some purposes that are for the public benefit and some that are not. There is further guidance from the Charity Commission here.

The Charity Commission has seen a number of applications to register Men’s Sheds as charities. In cases where the organisation shows a clear charitable purpose and its operation is for the public benefit including being directed to the public at large rather than simply to a narrow membership, for example, it has been registered as a charity.

The regulation of Men’s Sheds which are charities

The Charity Commission registers and regulates charities in England and Wales. If a Men’s Shed is established in England, and wants to become a Charitable Incorporated Organisation (CIO), it must register with the Charity Commission.

If a Men’s Shed applies to the Charity Commission to register as a CIO (or other type of charity) the application and supporting material will be the basis for the registration decision. Once registered a Men’s Shed will need to continue to operate as a charity and fulfil the reporting requirements. Further guidance on these requirements can be found in the Commission’s Guidance on Charitable Purposes and Public Benefit Guides here.

The purposes of a charity

The objects clause in the governing document of a charity must express exclusively charitable purpose(s). The Charity Commission’s published ‘Guidance on Charitable Purposes’, available from the Commission’s website gives more information about charitable purposes here.

A charity cannot have some purposes that are for the public benefit and some that are not. The work of a charity may only further the charitable purposes set out in its governing document. If a Men’s Shed is to be a charity it may only work to further its charitable purposes and it must limit the scope of its operation to advancing those purposes.

When you come to putting together your objects clause for your new CIO constitution, you can read through some examples in our document, Charitable Objects Examples (pdf).

For the Public benefit

As you’ll now understand, a charity must have purposes which are for the public benefit. The idea of doing something which will entirely benefit people is what the public benefit rule is all about. A charity bases its existence on benefitting people. A substantial part of the consideration for registering your Men’s Shed as a CIO (or other type of charity) should be demonstrating that your activities are benefitting the widest pool of people possible, appropriate to your activities and the reasons behind them.

The Charity Commission provides further information about ‘beneficial purposes’ from part 3 of the Charity Commission’s publication: ‘Public benefit: the public benefit requirement’ (PB1), available here.

The online form to apply to register a Men’s Shed charity includes a number of questions which applicants must answer in full and which give the opportunity to explain how the purpose(s) and operation of a Men’s Shed demonstrate all the elements of public benefit. Where a sufficient explanation is not supplied in the registration application the Charity Commission may ask for further information and this will delay our consideration of your application.

In your application form you will need to provide responses which are full enough to enable the Charity Commission to assess whether or not your purpose is for the public benefit and that your Men’s Shed will operate for the public benefit. You should only provide information which is relevant to the questions being asked.

Troubleshooting

From Men’s Shed applications that the Charity Commission has seen there are some key areas where applicants typically don’t provide sufficient information:

A – What do Men’s Sheds do?

In considering applications to register Men’s Sheds as charities, the Charity Commission needs applicants to provide full details of how the Shed achieves its purposes. Tell them:

• what you are doing
• exactly how you do it
• how this furthers exclusively charitable purposes and which charitable purpose/s (from the 13 charitable purposes listed here)
• how this meets the various requirements of public benefit

B – Who benefits?

The name and operation of Men’s Sheds indicate that they are directed to helping men. The Equality Act 2010 makes it unlawful to discriminate against anyone because of a ‘protected characteristic’ (which includes age and sex) in a wide range of areas including employment and the provision of services. There are some exceptions to this, including the Charities’ Exception.

The Charities’ Exception allows a charity to limit its benefits to people who share a protected characteristic. By default, this may exclude people with other protected characteristics. It is allowed if both of the following apply:

• the charity’s governing document only allows people who share a protected characteristic to benefit
• the restriction can be justified using either of the tests described in the Commission’s Equality Act Guidance here.

Where a Men’s Shed registering as a CIO uses a charitable object which specifically refers to men, the trustees will need to demonstrate that the restriction is justified in:

• tackling disadvantage; or
• in achieving some other legitimate aim

C – Potentially misleading names

Most Men’s Sheds will have the word “men” or “men’s” in their name. Where the main intended beneficiaries of the organisation are men this is unlikely to be considered misleading. However, where the activities benefit the public in general i.e. both men and women the name may then be considered misleading.

The Charity Commission’s policy on charity names explains this in more detail in particular in sections B8 to B11 and specifically B9.4. It can be found here.

In circumstances where this issue may arise, the applicant should explain why they wish to use the term “men” or “men’s” in the organisation’s name and how it fits with this guidance.

D – Trading

Lots of applications from Men’s Sheds to register CIOs with the Charity Commission refer to selling of products made within the Shed. It may be that this will be a minor part of the operation of the Men’s Shed charity, but if your Shed will be selling goods or services you will need to know how charities may lawfully trade. You will need to explain in detail in your application, how the organisation will trade.

To help you understand this, the Charity Commission have produced helpful the helpful guidance; Charity trading: selling goods and services, which can be found here. You can read the related document, Trustees trading and tax, here.

We have put together a quick reference guide, Charities and Trading to help you refresh your mind and understand the other considerations for trading in your charity.

E – Detriment and harm

The ‘benefit aspect’ of public benefit

To satisfy this aspect:

• a purpose must be beneficial – this must be in a way that is identifiable and capable of being proved by evidence where necessary and which is not based on personal views
• any detriment or harm that results from the purpose (to people, property or the environment) must not outweigh the benefit – this must also based on evidence and not on personal views

In considering the benefit aspect of ‘public benefit’ the Charity Commission has to balance the benefit of activities with any potential or actual detriment or harm.

For Men’s Sheds this might include how your organisation identifies and manages risks associated with the operation of power tools or machinery, or in working with people with specific needs.

You will need to tell the commission what detriment or harm could occur from your purpose, how you carry it out and what steps you have taken to address these e.g. risk management procedures and safeguarding. You can find examples and templates of some helpful documents to assist you in managing risks in our Resource Library.

Applying to become a CIO

The process of applying to become a CIO is handled entirely through the Charity Commission website here.

The following five steps form the process of becoming a CIO:

• Find your initial Trustees – you’ll need at least three to fill the officer roles (Chair, Treasurer and Secretary) and these are often the existing people on your management committee.
• Make sure the charity’s purposes are exclusively charitable for the public benefit. These are determined by charitable purposes as set out in the Charities Act 2011. We’ve given some guidance in the following pages of this document. The Charity Commission will reject your application if your objects don’t comply and you’ll need to revise it before submitting it again. We’ve given some help below and there’s plenty of help on the Charity Commission site too.
• Choose a name for your charity, if you haven’t already. This will likely be your Shed name, but if you have ambitions to start more Sheds in your area, or open your services up to wider purposes, you may wish to change it to become a charity.
• Write your constitution (the governing document). This is the most time consuming part of the process. We find the best approach is to read over constitutions of existing charities (including Sheds) to get a feel for what they include, then start writing your own with the help of the Charity Commission’s model constitutions that can be found on their guidance page here.
• Now all that’s left to do is register.

To do so, you must tell the Commission about:

• Your purpose or purposes
• How the purposes are carried out for the public benefit – including, where appropriate, information relating to any of the issues highlighted above; and the benefits of the Men’s Shed services you provide
• Your trustees

You must include with your application:

• A governing document suitable for a charity and containing exclusively charitable objects for the public benefit. A properly completed Charity Commission model governing document meets this requirement. This can be found here and we have made examples of constitutions from successfully registered Men’s Sheds available to download in our Resource Library.
• A statement set out in the application form confirming that the trustees have considered this guidance document and the linked public guidance.
• Proof of income e.g. evidence of how the new CIO will be funded so that it will be able to operate to further its charitable purposes for the public benefit.
• A Trustee Declaration signed by all the Trustees which includes confirmation that suitable eligibility checks and safeguarding checks required by law have been undertaken. Remember to fill in the organisation’s name as it appears in your governing document.
• The requirements for registration set out in the Charity Commission’s published guidance.

You may where applicable also need to include with your application:

• a copy of your lease or any agreement you have for use of premises

All of the required documents must be attached to your application as PDF files.

Timescales for application decisions are published on the application pages of the Charity Commission website. Applications which deviate from the scope set out in these guidelines may take longer to consider.

Continue reading for a Glossary of Terms.