The RAFAC is a youth organisation sponsored by the RAF, not an armed forces’ charity but more like the Scouts etc.
This is more a power grab by HQRAFAC and their placemen within the civil side of the RAFAC, ask how many Civ Com chairs are ex-uniformed staff at Wing and above level who want to retain their privileges?
edited to add:
A charity is excepted if its income is £100,000 or less and it is in one of the following groups:
churches and chapels belonging to some Christian denominations (see section 5)
charities that provide premises for some types of schools (see section 9)
ok. Still not a church though. The point is the withdrawal of excepted status for anyone except certain churches isn’t clear from the published uk gov sources.
I still think the best option is to do their plan of amalgamating everything (but have separate accounts, not 1 account with separate budget lines) or let us register as full charities in our own right.
So I heard on the grape-vine that there was another meeting recently to discuss these changes. Absolutely no information other than that. Anyone have an update? I’m talking about the actual changes to CWCs rather than the email/mailbox issue.
I have an update letter sent to our sqn chair which they shared with me. It isn’t protectively marked so I can’t see any harm in sharing the content, not that it says very much really. Let me dig it out.
Review of the Charitable Status of Wings and Squadrons 2021 -22
Charitable Status Update
Following my update in December 2022, I am pleased to be able to report further progress on the journey towards a simpler Charitable system.
In that review I asked for a Volunteer Region to trial the new financial system, and for each Region to nominate a Wing to lead their Region. These nominations were in place by January this year
A review led by the Regional chair for LaSER reported in January on the best Charity setup for Wings and Regions in the future. Their recommendation was for Wings to become Charitable Incorporated Organisations (CIOs) in the future. As there are TWO types of CIOs, I have appended their report for individual Wings to consider their best way forward.
The roadmap and timescale for the changes has now been finalised following my request for volunteer units, and is as follows:
Lead Region will be North Region and will trial the new structure based on the Xero accounting programme (and also iron out any issues that arise) between 1st April 2023 and 31st December 2023. The Region will be mentored by South and West Yorkshire Wing, as lead Wing.
Following on from this stage, from 1st January 2024, the nominated lead Wings from each of the other regions will be trained by North Region until 31st March 2024.
From 1st April 2024 these lead Wings will then mentor the rest of their individual Regions, completing this stage by 31st December 2024.
There will then follow a three month review period which will allow the new structure to be fully implemented by 1st April 2025.
Notwithstanding the above timescale, Wings are encouraged to start absorbing any Squadrons with financial issues as soon as possible. This will ensure that such Squadrons are already being successfully supported prior to the introduction of the new structure.
Wings should also start to move forward to becoming CIOs within the next one to two years. As more Squadrons become allied to Wing financial systems, it follows that the
Wings themselves will start to exceed the £100,000.00 income requirement and will need to move to full Charitable status in any case.
I hope that this update clarifies our progress for you, and gives you an idea of the pathway forward. If you have any questions please direct them through your Wing and Regional Chairs
Reference: Finance Reorganisation -PF dated 7 Dec 22
Introduction
At Reference, many questions were posed as to the future construct of an ATC Wing or Region level charity to replace those charities currently supporting individual ATC squadrons. This paper will address many of the issues raised and to give recommendations where appropriate. It will not address the need for change. The author has 11 years of governance and operational experience with military and other charities.
Charity Structure Options
As stated in PF’s paper, there are four main options to consider: a charitable trust; an unincorporated association; a company limited by guarantee; and, a charitable incorporated organisation (either by association or foundation).
a. Charitable Trust. Although charitable trusts are still commonplace, they are becoming less preferred and tend to be used mainly by individuals, families and grant making institutions where extraordinary close scrutiny can be applied. Theirmajor disadvantage is that trustees are liable for any financial mismanagement including fraud no matter the proof of negligence. As a result, this option should be discounted as it affords no protection to trustees.
b. Unincorporated Association. An unincorporated association is an organisation set up by a group of people for non-profit activities. There is no protection for the members, and each is personally responsible for the efficient and safe running of the association and holds financial liability. It cannot own property in its own right and cannot enter into contracts in its own right. As a result, this option should be discounted.
c. Company Limited by Guarantee. This structure is a legal entity and does protect its directors from liability to the limit defined in its articles – normally £1. It can own property and enter into contracts. It must be registered with Companies House and HMRC and complete mandatory tax reporting and payment. It does not have shares and is run by an elected board of directors representing the membership as defined in its articles. This is a good solution for not-for-profit organisations where commercial activity occurs and or raising funds through providing a service. It would not be optimal for the ATC as charitable fundraising could prove problematic. Raising funds through subscriptions would be permissible and accepted practice for such an entity however.
d. Charitable Incorporated Organisation (CIO). A CIO is a legal entity and as with the company limited by guarantee protects its trustees from any liability as defined by its constitution. However, it is not a company and therefore is not subject to company regulation and neither its existence nor charges it creates have to be registered with Companies House. It must be registered with the Charity Commission and adhere to charity law. There are two types of CIO – Foundation and Association. A “Foundation” charitable incorporated organisation has no separate members from its charity trustees (meaning the trustees are the members). An “Association” charitable incorporated organisation has separate voting members other than its charity trustees. The charitable incorporated organisation’s members may resolve to amend its constitution but not so that the charitable incorporated organisation ceases to be a charity; any amendments are not effective until registered with the Charity Commission. Administration of a CIO, be it Foundation or Association is relatively light with a Trustees Annual Report and Accounts submitted to the Charity Commission and an audit is needed where the gross income exceeds £500,000. An audit will also be needed if total assets (before liabilities) exceed £3.26m, and the charity’s gross income is more than £250,000. A charitable incorporated organisation must have at least one trustee: the Charity Commission recommends that trustees be individuals (who must be over 16 years old. It is strongly recommended that the ATC adopt the CIO model.
e. Foundation or Association . Either model could work for the ATC restructure. The big benefit of the Foundation is that the trustees are the members. It reduces administration, arrives at decisions more rapidly and is ultimately more flexible and responsive in its decision making. Trustees can be recruited from within the Wing/Region to represent the squadrons. If the Association model is chosen, then its advantage is that each squadron could be considered as a member with voting rights at any members’ AGM or EGM rather than relying on certain trustees. There are pros and cons to both but owing to its ability to act more adroitly a Foundation CIO is recommended. Careful consideration must be given to the composition of Board of Trustees, and this has to be stated within the constitution.
Governing Document and Other Issues
Constitution . A CIO’s governing document is a constitution. It is relatively straightforward to create – the Charity Commission provides a template which can be tailored to meet specific needs. But most importantly, the charity’s objects or purposes must be agreed and must meet with the Charity Commissions approval. Again, the Charity Commission provide detailed and helpful guidance on objects. A constitution could be produced in draft form within a week or so and should be circulated across the Wing/Region for comment. Each Wing/Region charity will be a separate legal entity and will not be subordinate or superior to any other charity. The constitution will also state the requirements for trustees in terms of numbers, term of office and the Board’s composition and recruitment. It will also set out the number of meetings and how meetings are organised and chaired. It is the ‘turn-to’ document for any higher-level governance issue. Trustees of one charity will have no responsibilities or liabilities for other ATC charities, unless, of course, they are trustees of multiple ATC charities.
Advice. The Charity Commission provides extensive easy to follow, self-help guides which enable the lay-person to set up a charity at very little cost. Each charity will need to be established individually although the same constitution can be used, tailored if necessary to fit a particular Wing or Region’s circumstances. It is not anticipated that there will be any need for significant differences between charities and their constitutions. The creation of the charities could be sub-contracted to a commercial firm although charity lawyers cost anywhere between £400-£800 an hour depending on grade. Much of this work can be done from within the ATC.
Investments and Financial Strategy. Similar to the creation of a constitution, financial strategies and investment policies can be created nationally for charities to adopt. But it is down to individual charities to adopt and follow such strategies and policies. ?
Charity day-to-day Operations . As the Wing or Region charity will be significantly larger and with a concomitant higher work-load and tempo, it is recommended that each charity employs a manger or director. And, that each charity retains a book-keeper of some description. The number of employees may well differ due to the size of the charity and this can be identified at a later stage.
Summary
Of the four options open to a non-profit organisation the CIO Foundation model is recommended although the CIO Association is also a strong contender. The governing document, the constitution, can be drafted for each charity – which are standalone legal entities in their own right and share no joint responsibilities or liabilities – although in practice will be very similar as will be any policies and or strategies. Time spent on determining the charity’s objects is critical as will be the agreed composition of the Board of Trustees.
Are Wings going to be taking on accountants to manage all this? And will they be doing things like chasing subs from parents or payment for activities?
I would expect these to be the sort of things that the trial Wings will need to figure out. Whatever the expectation it’s bound to change as the system goes into play.
I’m actually quite impressed that they have given it a decent lead time with a genuine and serious plan as to how it’s going to be rolled out.
And who is going to pay for them and a director. Will it be centrally funded from the RAFAC, or will a lean be put onto Squadrons to pay up before anything else happens? If it comes from the RAFAC would that not be a civil servant with civil service T&Cs and therefore ineligible to handle monies received or disbursed?
If people are employed to manage this, who many will they employ as just one person will not be enough when you consider annual leave, sickness etc and at that point who deals with payments in and out, in particular reimbursements to Squadrons and CFAVs for expenses already incurred?.
If the Wing/Region employ people they will be responsible for pay, NI management of income tax payments, HR issues, workplace accommodation hours worked and working conditions. As I said above who is paying?
Assuming those on the Wing committee actually remain in post and don’t upstakes and leave due to all the added responsibility and as importantly the time required.
