Charitable incorporated organisations (CIOs) now make up 60% of registration applications received by the Charity Commission and based on the report below, the Commission is struggling to cope.
From next year, it will also become possible for existing charitable companies to convert to a CIO and whilst this process will not represent the establishment of a new charity, it is perhaps likely that the registrations team at the Commission will be engaged in the process, further adding to its burden.
The enthusiasm for CIOs is not unexpected and despite there being some drawbacks to the CIO model there are many cases where a CIO is the logical choice for a new charity, or indeed, an existing unincorporated charity seeking to "incorporate".
Whether we will see a rush to convert charitable companies to CIOs remains to be seen but as I previously stated, trustees of charitable companies should ensure they take specialist advice on the benefits of converting and in particular, whether any genuinely worthwhile benefits exist.
It is hoped that the conversion process will be both straightforward and quick and the extent of the registration team's involvement may therefore be minimal. However, 12 weeks would be a long time to wait to divest of a structure that might be better suited (or just as suited) to your organisation than the new CIO.
The Commission said it has seen significant growth in registration over a number of years, driven largely by the popularity of the new Charitable Incorporated Organisation form, which accounts for three-fifths of new applications, up by nearly 10 per cent compared to last year. “The Commission has seen a huge increase in the number of applications to register a charity in the last few years,” a spokeswoman for the regulator said. “In 2016/17 there were a record 8,368 applications, compared to 5,949 in 2012/13. The number of applications continues to rise.”