Alter and modernise

Sometimes a problem can crop up if money or property has been donated for a charitable purpose but, for some reason, it cannot now be used for that purpose. This may happen where:

• An existing charity has fulfilled its purpose or become defunct, and there are surplus funds.
• A charity's original purpose is now provided for in other ways.
• The assets of a charity are too small for it to carry out its purpose.
• Money is left in a will for a charity which turns out not to exist, or to have been wound up prior to the death of the donor.

How charities may be altered or modernised

The charity may be allowed to alter its governing document to take on new charitable purposes as similar as possible to the existing ones, or one charitable organisation may amalgamate with another, or the money or property might be allocated to another but similar charity.

If the legal conditions for this type of solution are satisfied, the Charity Commission or the court will formulate a scheme for the application of the funds to another charitable purpose as near as possible to the original purpose.

A scheme for changing the administrative machinery of a charity can also be approved. It might be necessary to change the constitution of the charity's governing body where this is no longer appropriate. Another option is to enable the trustees to take some action which their governing document does not presently empower them to do.

Three steps to registration

If you're based in England and Wales:

• Send the Charity Commission a copy of your governing document, a completed application form - APP 1 - and a declaration form - DEC 1 - which should be completed by all trustees. Forms APP 1 and DEC 1 are available from the Charity Commission website - see resources. Make sure you look at the required information for the specific charitable structure you have chosen.
• Within 15 days of receipt you should either receive approval, a request for additional information or a rejection from the Charity Commission.
• If your application is unsuccessful, you will be given a reason and told how to appeal. If your application is successful, you will receive a charitable number and be entered on the register of charities. You will also receive an information sheet reminding you of your duties as a registered charity.

Getting charitable status in Scotland and Northern Ireland is slightly different - follow the links to find out what you need to do.

Find out more about other legal matter issues and examples in the In more depth section.