BEST PRACTICE
Benefits of being a CIO
The Alliance’s Rebecca Elsom explores and explains how being a CIO can feed into your setting’s positive impact and effectiveness in the community
Rebecca Elsom, early years development officer, is responsible for writing and delivering CPD resources that supports best practice for early years providers.
Early education and care charities provide opportunities for families and local communities to play an important role in the delivery of early years provision and be actively involved in their children’s early education. Such charities rely upon families and members of the local community taking on a role as trustee and contributing to the running of the early years setting.
Volunteering can be highly rewarding, offering parents/carers opportunities to learn new skills and build new relationships, and can also be beneficial for future career prospects. However, the level of responsibility can sometimes be daunting,
particularly as, with some charity structures, there are a number of obligations – such as being personally liable for the charity – that can unfortunately be a barrier for families becoming a trustee. Some of these obligations are removed or reduced when the charity operates as a charitable incorporated organisation (CIO).
What is a CIO?
The CIO is an incorporated charity structure that is most suited to small and medium-sized organisations.
Operating as a CIO has the benefit of incorporated status, meaning trustees do not have personal liability for the organisation as they do for unincorporated associations.
In addition, a CIO is solely regulated by the Charity Commission and not also by Companies House, as a charitable company would be, meaning there is less bureaucracy, reduced paperwork and reduced costs. It is, therefore, often the preferred option for most charities.
Benefits of being a CIO
We have already outlined a few reasons that organisations may choose to opt for the CIO structure, but there are a number of other benefits for doing so:
CIOs have a separate identity to trustees/ members: meaning they can directly enter into contracts as an organisation, rather than trustees being required to do this personally, feeding into limited liability for trustees. However, there’s still an obligation for trustees to act responsibly in their role – if they were ever proven to have acted recklessly, negligently or illegally, they could be found personally responsible.
The CIO constitution doesn’t allocate fixed officer roles: these are trustees who are given certain key tasks to perform. These duties are still required to be undertaken, but these responsibilities can be shared amongst trustees.
The Alliance’s CIO model constitution 2013 (which can be found on EYA Central within the Charity Providers Mini-Guides) also carries the following potential benefits:
The charity can run with a minimum of three trustees, unlike charitable companies and unincorporated associations, for which five are required.
A minority of trustees can be staff members – though once the CIO is established, staff members cannot be named as the first trustees during the process of converting to a CIO.
A staff member who is elected as a trustee can be the nominated person with Ofsted – this is beneficial as someone with knowledge and understanding of early years will be the person that liaises with Ofsted.
Early Years Alliance CIO Toolkit
The process of registering as or converting to a CIO can be overwhelming for many, from navigating the application process to making key actions at the necessary times.
That’s why we at the Early Years Alliance have put together our new CIO Toolkits to support you through this process. There are three versions available to purchase: one for those setting up a brand-new charity as a CIO, one for those looking to change their existing unincorporated association into a CIO, and one for those converting their charitable company into a CIO.
The sections within each toolkit aim to provide support and guidance for each part of the process, with key actions, top tips, useful resources and links to important websites. Additionally, Alliance members have free access to Law-Call for any legal support regarding becoming a CIO.
You can find out more information about our CIO Toolkits – and select the toolkit that meets your needs – on EYA Central:
- CIO Toolkit - Registering your new charity as a CIO: bit.ly/U5newcharity
- CIO Toolkit - Registering your existing unincorporated charity as a CIO: bit.ly/U5unincorporated
- CIO Toolkit - Converting your charitable company into a CIO: bit.ly/U5charitable
We also have an upcoming Alliance Insight Charity structures and key elements of becoming a CIO and our Leading an early years charity: A trustee handbook publication that could provide further information and guidance on the subject.
Alliance Insight: Charity structures and key elements of becoming a CIO - 27 Nov 2024 18:30 - 19:30pm
This Insight session focuses on charity structures and the key elements of becoming a Charitable Incorporated Organisation (CIO). This session is a great opportunity to find out about the benefits of being a charity, the role of trustees, the barriers created by different structures, the potential personal liabilities, and how to overcome these: bit.ly/CIObenefits-training
Leading an early years charity: A trustee handbook
This handbook aims to provide readers with an understanding of how early years care and education charities work and their role as trustees in governing them.
This online publication will support both new and existing trustees by providing a comprehensive guide to the fundamentals of running a charity and charity provision, such as charity structures and good governance, the different types and purposes of meetings, managing the charity finances, recruiting and effectively managing a team of early years educators, and the trustees’ responsibilities under the Early Years Foundation Stage: bit.ly/trustee-handbook
Under 5 magazine
The magazine of the Early Years Alliance