LIONS CLUBS INTERNATIONAL MD 105

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1 LIONS CLUBS INTERNATIONAL MD 105 CHARITY PACK FOR CLUBS IN ENGLAND AND WALES Contents: PACK 1: FOR NEW CHARITABLE TRUSTS (Charities Act 1993 as amended by the Charities Act 2006) 1. Why does a Lions Club need a separate Charitable Trust? 2. Notes for Guidance on setting up a Charitable Trust 3. Draft Trust Deed 4. Draft club resolution to indemnify Trustees 5. Standard document for evidencing change of Trustees If the Trust has an income in excess of 5,000 then it must be registered with the Charity Commission. Clubs should contact the charity commission for a pack to register a Charity, which will include the Application for Registration and the Trustee Declaration referred to in the notes that follow and also an Application for Registration: Guidance Notes which will assisit in completing the forms. The easiest way to get these is from the Charity Commission Website. At the time of writing, the direct link to the pack is here: but this address may change. If it does not link you to the pack, then go to the main website at and follow the links to publications. Other contact details for the Charity Commission are set out in paragraph 16 of the notes for guidance that follow. Mike Greenway MD Legal Adviser updated September 2009

2 LIONS CLUBS INTERNATIONAL MD 105 Why does a Lions Club need a separate Charitable Trust? 1. A charity must have exclusively charitable aims. The starting point for the Charity Commission in assessing whether an organisation is capable of being a Charity is the Objects of the Charity. These are set out in a Lions Club in the Club Constitution under Objects or Purposes. These objects are not of a wholly charitable nature, and accordingly a Lions Club cannot in itself be a charity. Therefore it is not possible for a Club to apply to the Charity Commissioners (in England and Wales) for registration as a Registered Charity. The answer to this is for Clubs to form a Charitable Trust, which runs alongside the Lions Club, but separate from it. 2. What is a Charity? A charity has for the very first time been defined by statute. Prior to the Charities Act 2006 there was no statutory definition and case law had to be relied on together with a preamble to an Act passed in 1601! 3. A Charity is now defined as one formed for the purposes of any one or more of the following purposes, subject to the overriding requirement that it must be for the Public Benefit. 1. the prevention or relief of poverty. 2. the advancement of education 3. the advancement of religion 4. the advancement of health or the saving of lives 5. the advancement of citizenship or community development 6. the advancement of the arts, culture, heritage or science 7. the advancement of amateur sport 8. the advancement of human rights, conflict resolution or reconciliation, or the promotion of religious or racial harmony or equality and diversity. 9. the advancement of environmental protection or improvement 10. the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage 11. the advancement of animal welfare 12 the promotion of the efficiency of the armed forces of the crown, or the efficiency of the police, fire and rescue services or ambulance services. 13. other purposes that are currently recognised as charitable or are in the spirit of any purpose currently recognized as charitable.

3 4. Multiple District Recommendation The Multiple District recommendation to Clubs is that they consider forming a Charitable Trust which is established for charitable purposes only and which can be registered as a charitable body. The reasons behind this advice are as follows:- 4.1 Awareness by the public that the Lions Club has organised its affairs to have largely charitable status. Without such status Clubs may well be looked upon by the public as inferior. 4.2 Acceptance by Local Authorities, supermarkets etc. of Clubs' charitable status. This may help in obtaining permission to run events or undertaking collections. 4.3 The tax advantages which are available to Charitable Trusts are not available to Clubs e.g. gift aid 5. In their publication CC21 Registering as a Charity, the charity Commission list the benefits of Charitable status as follows: The main advantages are that charities: do not normally have to pay income/corporation tax (in the case of some types of income), capital gains tax, or stamp duty, and gifts to charities are free of inheritance tax; pay no more than 20% of normal business rates on the buildings which they use and occupy to further their charitable aims; can get special VAT treatment in some circumstances; are often able to raise funds from the public, grant-making trusts and local government more easily than non-charitable bodies; can formally represent and help to meet the needs of the community; are able to give the public the assurance that they are being monitored and advised by us; can seek advice from us; and can get information from us, for example, our range of free publications

4 LIONS CLUBS INTERNATIONAL MD 105 Notes for Guidance on setting up a Charitable Trust 1. Lions Clubs Charitable Trusts are created by entering into a Trust Deed. The Model Declaration of Trust included in this pack has been approved by the Charity Commission for use by Lions Clubs in setting up a charitable Trust in England and Wales. 2. The use of the model form is not obligatory but has been drafted to assist Clubs. It will speed up the application for Registration if the approved document is used. It may be amended to suit an individual Club's specific requirements but Clubs are strongly advised to seek legal advice from the Multiple District Legal Adviser before amending the deed. If the Deed is amended it will slow down the Registration Process and you will not be able to use the on-line application. 3. Main points in the deed. 3.1 The deed provides for there to be three named trustees initially. Their names and addresses must be inserted in the first section of the Deed All Trustees must be members of the Lions Club. Any Trustee who leaves the club will be deemed to automatically retire as a Trustee. This prevents the situation that frequently arose in the past when trustees left the club, but still technically remained as Trustees The first trustees will retire on the expiration of 1, 2 and 3 years respectively, so that the Club will each year appoint one replacement trustee. A retiring trustee may be re-appointed. Replacement trustees will be appointed for a term of three years. The date of retirement has been set at 30th June to coincide with the change of Club Officers. Clubs are recommended to elect a trustee at the same time as normal club officer elections. It is hoped that when clubs get into the pattern of annual appointments, it will also solve the problem that previously existed of 'lifetime' Trustee being forgotten about, leaving or dying resulting in problems for the Club in identifying the Trustees. 3.4 The President, Secretary and Treasurer of the Club will automatically be trustees in addition to the three appointed. They have the same voting powers as the elected Trustees. 3.5 The club can remove a Trustee by resolution passed by a two thirds majority vote at a club meeting provided at least 7 days notice has been given to the Trustee and he has been given the opportunity to be heard. 3.6 The Trustees must meet at least once a month - this could be before a club meeting if required. 3.7 To maintain control of the Trust Fund by the Club - conflicts between the club and the

5 Trustees have arisen in the past - the trustees must seek the approval of the club before exercising their powers. In return it is recommended that the club indemnify the Trustees from any claims arising out of their actions provided such approval is sought. This should stop the reluctance of some club members from becoming Trustees. 3.8 There are occasions where the Trust Fund needs to raise money itself, rather than through the Lions Club - e.g. to gain concessions as a Registered Charity. The deed accordingly gives the Trustees such power (subject to the approval of the club) but excludes permanent trading. This is at the insistence of the Charity Commission. It will not prevent the Trust from selling donated goods in a Charity shop, but would prevent it e.g. from buying goods for resale as a normal shopkeeper. 4. Once the details have been completed and the draft deed has been approved by the Club, it should be dated and signed by the three named Trustees in the presence of a witness; the witness should also sign the deed and print his or her name and address. The Trustees should also complete and sign the Charity Commission Form Trustee Declaration to signify their acceptance of acting as a Trustee. 5. If it anticipated that the Charitable Trust (not the Lions Club) will work with children or vulnerable adults then all Trustees must be CRB checked. For further guidance on this see the Lions MD Vulnerable Persons Policy (obtainable from the MD Website at and also section D of the Charity Commission Application for Registration: Guidance Notes. To find out how to obtain a CRB check contact your District Vulnerable persons Officer (or failing that the MD Vulnerable Persons Officer). The appropriate sections must then be ticked on the Trustee Declaration Form. 6. If the club has decided to amend the model form deed in any way, it is strongly recommended that a copy of the amendments are first sent to the MD Legal Adviser for approval before signature. 7. Once the Trust Deed has been completed, you should then complete the Charity Commission Form Application for Registration. This can be done either by printing off the Form or completing it on-line (current address for on-line registration is or follow the links from the Charity Commission Home Page). Please note though that the on-line form can only be used when using the approved standard form Lions Charitable Trust Deed. 8. The following points should help you complete the form. 8.1 In Section A you will need to provide evidence that the Charitable Trust income will exceed 5,000 a year. Usually the income of the Charitable Trust will be by way of donations from the Lions Club and if your club had been in existence some time then you should be able to prove that donations are likely to exceed 5,000 by showing the income or donations made by the Club (which will now be placed into the Charitable Trust) have exceeded 5,000 over the last few years. If you cannot show this (e.g. because your club does not raise over 5,000 per year or because you are a new Club) then you will not be able to register as a Charity. You will have to wait until you can show the required level of income. It will be possible in the future to apply to register voluntarily if your income is below 5,000, but that is not (at the time of writing) currently in force. The Charity Commission state on their website:

6 When the programme of registering all currently excepted and exempt charities has been completed the law will allow charities with income below the thresholds to approach us requesting voluntary registration. In the meantime, it is not our policy to register charities that do not already have the required level of income Clubs with a small income should check with the MD Legal Adviser as to whether or not it is now possible to register voluntarily. 8.2 In Section B you should indicate that the governing instrument is a Trust Deed and at B3 you should answer that the approved governing document was issued by Lions Clubs International MD Since 1 April 2008, the Charity Commission have an obligation to check that any Charity is for the Public Benefit. You will need to show this in Section C. The Charity Commission guidance on Public Benefit is summarised in its Form CC21 as follows: There are two key principles both of which must be met in order to show that an organisation s aims are for the public benefit. Within each principle there are some important factors that must be considered in all cases. These are: Principle 1: There must be an identifiable benefit or benefits 1a It must be clear what the benefits are 1b The benefits must be related to the aims 1c Benefits must be balanced against any detriment or harm Principle 2: Benefit must be to the public, or a section of the public 2a The beneficiaries must be appropriate to the aims 2b Where benefit is to a section of the public, the opportunity to benefit must not be unreasonably restricted: by geographical or other restrictions or by ability to pay any fees charged 2c People in poverty must not be excluded from the opportunity to benefit 2d Any private benefits must be incidental Section C - Object 1 - should be copied from the Trust Deed as follows: for any purpose which is charitable according to the law of England and Wales whether for the benefit of any individual or group of people or for the benefit of any other organisation established for charitable purposes. Clubs should be able to show compliance with the Public benefit requirement by listing the donations made by the Charity (or the Lions Club prior to the Charity Trust formation). A sample wording could be: Donations are made to deserving groups or individuals within the area covered by [xyz] Lions Club together with donations to national and international Charities or Charitable Appeals. Examples of Donations made include: 8.4 In Section D you will need to complete this if the Charitable Trust (not the Lions Club) works with Children or Vulnerable Adults. See paragraph 5 above on how to obtain further information on Vulnerable Persons. 9. After completion the following must be sent to the Charity Commission: The Completed Application Form

7 The signed Trustees Declaration A copy of the Trust Deed (do not send the original) Evidence of income (See paragraph 8.1 above). 10. Upon completion of registration, the Club will be advised of the Charity Registration number. 11. All cheque books and stationery in the name of the Charitable Trust must include the words "A registered charity" or "Charity Registration number??????". This information should not be stated on normal club notepaper or club cheques. If required, the club notepaper could include the words "Incorporating ****** Lions Club Charitable Trust (Charity Number???????)" 12. The charity account must be kept separate from any other Club accounts. No money should be paid from the Charity Account to the Lions Club as this could jeopardise the charitable status of the Trust. Clubs are recommended to retain an "Activity" account to cover advance fund raising expenditure. 13. It is strongly recommended that the club pass a resolution in the form of the enclosed draft indemnifying the Trustees from future claims. 14. The appointment of new Trustees each year and any resignations or removals should be evidenced by the standard form enclosed with these instructions and signed by the club President, or other chairman of the club meeting. 15. Any further queries should be directed to the Multiple District Legal Adviser. 16. Contact details for the Charity Commission are: Website: Telephone: Textphone: Fax: Charity Commission Direct, PO Box 1227, Liverpool L69 3UG Note: Your application may be dealt with by one of the Charity Commission s 4 offices, but there is only one central contact point as above.

8 THIS DECLARATION OF TRUST is made the 20 by of and of and of day of ("the First Trustees" who together with the future trustees or trustee of this deed are referred to as "the Trustees") WHEREAS (1) The first Trustees are three members of the [Name of Club] Lions Club ("the Lions Club") being the club numbered of the International Association of Lions Clubs. in District (2) The Lions Club is not itself a charity but maintains a "Charity Account" which has been established and applied exclusively for charitable purposes according to the law of England and Wales. (3) The Lions Club is desirous of transferring the Charity Account to the Trustees upon the trusts of this deed. (4) There is currently standing to the credit of the Charity Account the sum of which the first Trustees hold on the trusts declared in this deed and it is contemplated that further money or assets may be paid or transferred to the charity account and/or the Trustees upon the same trusts. NOW THIS DEED WITNESSETH AS FOLLOWS: 1. Administration 1.1 The charitable trust constituted by this deed ("the Charity") and its property ("the trust fund") shall be administered and managed by the Trustees under the name of [name of club] Lions Club Charitable Trust Fund or by such other name as the trustees from time to time decide with the approval of the Charity Commissioners for England and Wales ("the Commissioners"). 1.2 In this deed reference to the masculine gender shall include the feminine and vice versa. 1.3 The Trust fund shall comprise the balance standing to the credit of the said Charity Account from time to time together with any other assets or property transferred or given to the Trustees by the Lions Club or any other person to hold upon the Trusts of this deed. 1.4 In this deed "A Lions Club Meeting" shall mean a regular and properly constituted meeting

9 of the Lions Club. 2 Objects The Trustees shall hold the Trust fund and its income upon trust to apply them for any purpose which is charitable according to the law of England and Wales whether for the benefit of any individual or group of people or for the benefit of any other organisation established for charitable purposes. ("the objects") PROVIDED ALWAYS that the Trustees shall not apply the trust fund or any part thereof without first obtaining the approval of the Lions Club at a Lions Club meeting. 3 Powers In furtherance of the objects and upon the prior approval of the Lions Club but not otherwise the Trustees may exercise any of the following powers. (i) to raise funds and invite and receive contributions: Provided that in raising funds the Trustees shall not undertake any permanent trading activity and shall conform to any relevant statutory regulations; (ii) to buy, take on lease or in exchange, hire or otherwise acquire any property necessary for the achievement of the objects and to maintain and equip it for use; (iii) subject to any consents required by law to sell, lease or otherwise dispose of all or any part of the property comprised in the trust fund; (iv) subject to any consents required by law, to borrow money and to charge the whole or any part of the trust fund with repayment of the money so borrowed; (v) to co-operate with other charities, voluntary bodies and statutory authorities operating in furtherance of the objects or of similar charitable purposes and to exchange information and advice with them; (vi) to establish or support any charitable trusts, associations or institutions formed for the objects or any of them; (vii) to delegate to any one or more of the Trustees the transaction of any business or the performance of any act required to be transacted or performed in the execution of the trusts of the Charity and which is within the professional or business competence of such trustee or trustees: Provided that the Trustees shall exercise reasonable supervision over any trustee or trustees acting on their behalf under this provision and shall ensure that all their acts and proceedings are fully and promptly reported to them; (viii) to invest the trust fund in such investments as are authorised by law for the investment of Trust Funds. (ix) to do all such other lawful things as are necessary for the achievement of the objects.

10 4 Appointment of trustees 4.1. The body of trustees shall consist when complete of 6 persons being: 3 nominated trustees being members of the Lions Club and 3 ex-officio trustees; 4.2. The first trustees shall be the first nominated trustees and shall hold office for the following periods respectively (i) (ii) (iii) From the date hereof until the 30th June in the next calendar year From the date hereof until the 30th June in the next but one calendar year From the date hereof until the 30th June in the next but two calendar year Thereafter the nominated trustees shall be appointed by the Lions Club at a Lions Club meeting. Each appointment shall be made for a term of three years or in the event of a vacancy in the office of a nominated trustee prior to the expiration of his term of office, for such period as the trustee whose place he has filled would have continued in office. The chairman of the meeting shall cause the name of each person appointed to be notified forthwith to the trustees If for any reason trustees cannot be appointed in accordance with the foregoing provisions, the statutory power of appointing new or additional trustees shall be exercisable The ex-officio trustees shall be the President, Secretary and Treasurer from time to time of the Lions Club. 5 Eligibility for trusteeship No person shall be appointed as a trustee: 5.1 unless he has attained the age of 18 years and is a member in good standing of the Lions Club; or 5.2. if he would be disqualified from office under the provisions of the following clause 6 Determination of trusteeship A trustee shall cease to hold office if he 6.1. is disqualified from acting as a trustee by virtue of section 72 of the Charities Act 1993 (or any statutory re-enactment or modification of that provision); or 6.2. becomes incapable by reason of mental disorder, illness or injury of managing and administering his own affairs; or 6.3. is absent from three consecutive meetings of the Trustees and the Trustees resolve that his office be vacated; or

11 6.4. notifies to the Lions Club or to the Trustees a wish to resign (but only if at least two trustees will remain in office when the notice of resignation is to take effect); or 6.5. ceases (for whatever reason) to be a member of the Lions Club; or 6.6. is removed from office by a resolution approved by a two thirds majority vote of the Lions Club at a Lions Club meeting and at least 7 days notice of such resolution has been given to all members of the Lions Club including the Trustee concerned PROVIDED THAT he shall have been given the opportunity to be heard by such meeting before the final decision is made. 7 Ordinary meetings The Trustees shall hold at least one meeting in each month. 8 Calling meetings The first meeting of the Trustees shall be called by the President of the Lions Club or if no meeting has been called within two months after the date of this deed by any two of the Trustees. Subsequent meetings shall be arranged by the Trustees at their meetings or may be called at any time by the chairman or any two trustees upon not less than ten days' notice being given to the other trustees. 9 Chairman The President of the Lions Club shall be chairman of the meetings of the Trustees. If the chairman is not present within ten minutes after the time appointed for holding a meeting or there is no chairman the Trustees present shall choose one of their number to be chairman of the meeting. 10 Special meetings A special meeting may be called at any time by the chairman or any two trustees upon not less than four days' notice being given to the other trustees of the matters to be discussed. A special meeting may be called to take place immediately after or before an ordinary meeting. 11 Quorum There shall be a quorum when at least three trustees are present at a meeting. 12 Voting Every matter shall be determined by a majority of votes of the Trustees present and voting on the question. The chairman of the meeting shall have a casting vote whether he has or has not voted previously on the same question but no trustee in any other circumstances shall give more than one vote.

12 13 Minutes The trustees shall keep minutes, in books kept for the purpose, of the proceedings at their meetings. 14 Accounts The Trustees shall comply with their obligations under the Charities Act 1993 (or any statutory re-enactment or modification of that Act) with regard to: 14.1 the keeping of accounting records for the Charity; 14.2 the preparation of annual statements of account for the Charity; 14.3 the auditing or independent examination of the statements of account of the Charity; and 14.4 the transmission of the statements of account of the Charity to the Commissioners. 15 Annual Report The Trustees shall comply with their obligations under the Charities Act 1993 (or any statutory re-enactment or modification of that Act) with regard to the preparation of an annual report and its transmission to the Commissioners. 16 Annual Return The Trustees shall comply with their obligations under the Charities Act 1993 (or any statutory re-enactment or modification of that Act) with regard to the preparation of an annual return and its transmission to the Commissioners. 17 General power to make regulations Within the limits of this deed the Trustees shall have full power from time to time to make regulations for the management of the Charity and for the conduct of their business, including the calling of meetings, the deposit of money at a bank and the custody of documents. 18 Bank account Any bank account in which any part of the trust fund is deposited shall be operated by the Trustees and shall be held in the name of the Charity. All cheques and orders for the payment of money from such account shall be signed by at least two trustees. 19 Trustees not to be personally interested 19.1 Subject to the provisions of clause no trustee shall acquire any interest in property belonging to the Charity (otherwise than as a trustee for the Charity) or receive remuneration or be interested (otherwise than as a trustee) in any contract entered into by the Trustees).

13 19.2 Any trustee who is a solicitor, accountant or other person engaged in any profession may charge and be paid all the usual professional charges for business done by him or his firm when instructed by the other trustees to act in a professional capacity on behalf of the Charity: Provided that at no time shall a majority of the trustees benefit under this provision and that a trustee shall withdraw from any meeting of the trustees at which his own instruction or remuneration, or that of his firm, is under discussion. 20 Management of land Subject to any consents which may be required by law, the trustees shall either sell or let any land belonging to the Charity which is not required to be retained or occupied in furtherance of the objects. 21 Repair and insurance The trustees shall keep in repair and insure to their full value against fire and other usual risks all the buildings of the Charity and shall also insure suitably in respect of public liability. 22 Amendment of Trust Deed 22.1 The Trustees may amend the provisions of this deed, provided that: no amendment may be made which has the effect of the charity ceasing to be a charity at law and any amendment must be approved by resolution of a Lions Club meeting and at least fourteen days notice of such resolution must be given to all members of the Lions Club Any amendment shall be made by deed by the Trustees The Trustees should promptly send to the Commissioners a copy of any amendment made under this clause. 23 Trustees Indemnity In the execution of the trusts and powers of this deed no Trustee shall be liable for any loss to the Charity arising by reason of any improper investment made in good faith (so long as he shall have sought professional advice before making such investment) or any mistake or omission made in good faith by him or any other Trustee or any other matter other than wilful and individual fraud wrongdoing or wrongful omission on the part of the Trustee who is sought to be made liable. 24 Failure of Trusts In the event of the failure of the trusts of this deed any assets remaining after satisfaction of the debts and liabilities of the charity shall not be paid to or distributed among the Trustees but shall

14 be given to such other charitable institution or institution having objects similar to those of the charity as the Trustees shall decide. IN WITNESS whereof the parties hereto have hereunto set their respective hands the day and year first before written. SIGNED AS A DEED by the said in the presence of: Witness' name: Witness' address: SIGNED AS A DEED by the said in the presence of: Witness' name: Witness' address: SIGNED AS A DEED by the said in the presence of: Witness' name: Witness' address:

15 TRUSTEES INDEMNITY - LIONS TRUST DEED The following resolution should be passed by your Club to indemnify the Trustees of the Club Trust Fund from any personal liability. The resolution should be noted in full in the minute book. "IT IS RESOLVED that this Lions club shall indemnify the Trustees from time to time of the Lions Club Charitable Trust Fund from and against all claims, demands, damages and obligations made against them arising out of any act or omission carried out in good faith on behalf of the said Trust Fund PROVIDED THAT where required by the Trust Deed or any amendment thereof such act or omission had been duly approved by this Club in accordance with such provisions" A copy of the resolution signed by the Secretary should be given to each Trustee in the following format: [set out resolution as passed] I hereby certify that a resolution in the above terms was passed by this Lions club at a duly constituted meeting of this club on the day of 20. Signed: Secretary

16 MEMORANDUM OF APPOINTMENT of new Trustees under S.83 Charities Act 1993 MEMORANDUM of the choice and appointment of new Trustees of Lions Club Charitable Trust Fund ('the Charitable Trust') being the charity comprised in a declaration of trust made the day of 20 ) by a resolution passed at a meeting of the Lions Club ('the Lions Club') duly convened constituted and held for that purpose on the day of 20 at. WHEREBY IT IS DECLARED that the persons named below were discharged from the office of trustee of the Charitable Trust or were chosen and appointed to be new trustees of the Charitable Trust respectively. 1. Names of Trustees discharged from office Reason for Discharge: Reason for Discharge: Reason for Discharge: 2. Names of Continuing Trustees 3. Names of New Trustees

17 Dated this day of 20 SIGNED AS A DEED by ) ) as Chairman of the meeting at ) and in the presence of the meeting )... held on the day of ) Chairman of the Meeting and in the presence of: ) First Witness (present at the meeting) Witness Second Witness (present at the meeting) Witness

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