Transferring Charity Assets to another Charity

June 6, 2023

Transferring charity assets to another charity can be a great way to support the receiving charity’s purposes. Trustees have the power to gift assets such as cash, property and investments to other charities — so long as the charity’s governing document allows it.

However, transferring your charity’s assets and ensuring they’re used as intended often requires specialist advice to get right. Here’s what you need to know about transferring charity assets.

Reasons for transferring charity assets

Trustees may choose to transfer a charity’s assets for a range of reasons: as part of a donation, incorporation or even when merging with another organisation.

Other times, trustees transfer their assets because they decide to close the organisation — perhaps because they struggle to find new trustees, or simply don’t have enough time to fulfil the charity’s aims.

In this case, a larger charity with similar purposes to yours may be able to put the asset to good use; transferring assets during closure is, therefore, the obvious choice.

How to transfer charity assets

You’ll need to follow different rules on transferring charity assets depending on whether your charity is incorporated or not.

Transferring unincorporated charity assets

If you run an unincorporated charity and want to transfer assets to another charitable organisation, you’ll need to be confident that:

  • transferring the assets is the best way to ensure they’ll be used as your charity intended
  • the charity receiving the assets has at least one purpose similar to your charity’s aims
  • the people currently benefiting from your charity will continue to benefit from the asset once the transfer is complete.

Permanent endowments

Transferring an asset may be more complex, however, if it is a permanent endowment.

As the name suggests, a permanent endowment is any asset that an unincorporated charity was originally supposed to hold forever (as set out in the charity’s governing documents). Examples could include:

  • land
  • buildings
  • cash
  • investments.

While it is possible to dispose of or transfer these assets, you may need permission from the Charity Commission to do so. Trustees must also agree that the transfer is necessary to carry out the charity’s purpose more effectively.

Transferring assets between incorporated charities

When transferring assets between charitable incorporated organisations (CIOs), you’ll need to ensure that the receiving CIO has similar:

  • charitable purposes
  • rules on what happens to property if it closes
  • rules on benefits to trustees, members and connected persons.

Completing an asset transfer

Completing an asset transfer can be complicated, so you should always seek financial and legal advice to make sure you do everything by the book.

Final steps include passing a transfer resolution and, if applicable, asking the Charity Commission to approve the transfer. For transfers of land or property, you’ll also need to give the receiving charity any title deeds and other relevant documents.

If you need approval from the Charity Commission — for example, if there are any conflicts of interest — you must check that it has the latest accounts for your charity on file.

You won’t be able to remove the organisation from the register of charities until the resolution has been passed.

Continuing your charity’s legacy

If you’re unsure about your charity’s future, we’re here to support you.

As specialist accountants for charities, we can help you stay in line with Charity Commission regulations and offer expert advice on managing your finances. We’ll make it our mission to help you fulfil your charity’s purpose, even after you close your doors.

Get in touch with us to find out how we can help you with transferring charity assets.

Ready to talk?

Dick Haffenden JCS

Then we’re ready to listen.

Tell us about yourself, your goals and what you need to achieve them and one of our team of friendly accountants will be in touch to begin the conversation.

020 8643 1166

jcs Accountants

Subscribe to our newsletter

By submitting your details you agree to receive email marketing from JCS Accountants and have read and understood our Privacy Statement. You can withdraw your consent or change your preferences at any time by emailing us or by clicking the link at the bottom of every email we send you.

You have Successfully Subscribed!