Becoming a SCIO is a bit like buying a pair of wellies

‘Look at my really sparkly wellies’. And straight away, ‘Look at my not sparkly wellies’. I laughed - the wee one always copies! But it got me thinking, whether sparkly or not, wellies fulfil the same function; to cover your feet and keep out the rain (or puddles in this particular case – what is it with kids and puddles?) I feel a bit guilty that the wee one doesn’t have sparkly wellies. But her feet will grow soon and then it’ll be off to the shops for a new pair – with sparkles, no doubt. When your charity grows or takes on new areas of work, your constitution, like a pair of boots, can become uncomfortable or simply no longer fit. We’ve seen a rise in enquiries at SCVO from charities looking to become SCIOs (Scottish Charitable Incorporated Organisations) and probably for good reason, as there’s more protection for trustees in an incorporated organisation.

Start by checking your constitution

In the charity world, changing legal form is just like getting new wellies. The Scottish Charity Regulator OSCR recently changed how charities can become incorporated. The steps are more straightforward, but there’s lots to do before you even decide to change your legal form. The process is now:

1. set up a new charity
2. transfer everything from the existing charity to the new one
3. wind up the old charity

This is just a basic overview, yet it’s just like buying wellies - you can’t change their shape when they’re too small, you have to buy new ones! So before you even get started, you (that’s all the trustees) need to sit down and do some planning. First, check your constitution. Make sure you have the power to transfer all assets to a new organisation and have the power to wind up the existing one. And make sure you know how to do this. Make a list of all everything that will have to be transferred or may cause problems – assets, liabilities, employees, other regulators, contracts, landlord, funders, members, supporters, donors, bank, insurance provider, pension provider, stationery. OSCR has incorporation guidance which includes a really useful checklist for this stage. There’s more in-depth guidance on the way. OSCR has convened a group of people from a variety of organisations (myself included!), who are currently working on more detailed guidance on all the things that might need more attention in this process. We’ll let you know when this is all ready. Most importantly, make sure you take the right decision for your organisation. Don’t just get sparkly wellies because someone else has – get what’s right for you.