As many of you will know, The Positive Herd Project has been pursuing registered charitable status for over a year now. We originally aimed to become a Charitable Incorporated Organisation (CIO), which required a written constitution, a board of trustees and registering with the Charities Commission. We worked extremely hard to write policies, balance the books and conduct board meetings. After submitting our application to the Charities Commission in August 2019 we have been operating as an unregistered charity while we waited to hear from them. We finally received a response in February 2020 highlighting issues that they required us to rectify.
First of all, they explained that providing a sanctuary for animals was not wholly a charitable activity. In their response the Commission stated ‘to be regarded as charitable, organisations promoting animal welfare will need to show elements of mental and moral improvement for mankind itself. An institution formed simply to promote the welfare of animals is not charitable.’ They agreed that the rescue, rehabilitation and rehoming of horses in distress was charitable, but that ‘caring for well-looked after animals is not, on its own, charitable.’ The sanctuary aspect of The Positive Herd Project is one of our underpinning aims, and we feel that we owe it to those horses to make sure they’re safe and happy for the rest of their days. What’s more, the sanctuary herds are vitally important to our therapeutic and educational activities. We need our familiar and reliable horses to be accessible to the public and beneficiaries if they are to safely access our therapy, workshops and other services. Therefore this is unfortunately not something that we would be willing to compromise on.
There was concern raised about the conflict of interest of myself and Rachel being related and also in us receiving payment for providing services. A conflict of interest arises wherever there is likelihood that decisions might be made that are not in the best interest of the proposed charity. The Positive Herd Project first took form as a family run organisation, with all of the work and financial strain being spread between family members. It functioned in this manner for years with none of the members receiving any profit or personal gain, it was enough for us to know that the horses were safe, secure and happy. As neither Rachel nor I were on the board of trustees for the charity we hoped this would address the conflict of interest sufficiently. However, the Commission stated that it was unacceptable for anyone to set up a charity with the assumption that themselves or anyone connected to them be paid. We realise the importance of such measures to protect charities from malpractice, but that in turn meant that we would essentially have to start the organisation without any chance of being able to support ourselves in the future. This dilemma seemed an impossible hurdle as the project has been our life’s work, and something we feel so passionate about.
The issue of offering a livery service was also an issue, as it is not on its own a charitable activity. The purpose of offering livery spaces is both to raise funds to support the organisation’s charitable aims, and to offer natural and therapeutic livery spaces to horses who would otherwise struggle to cope in a more conventional livery. As livery income makes up a substantial proportion of our business plan it was possible that the income could surpass the charity’s trading limit, so might require us to set up a separate social enterprise for the trading section of the organisation.
With all points considered and lengthy deliberation from the board members it was eventually decided to change to become a Community Interest Company (CIC). We were unwilling to sacrifice big areas of what we believe makes the organisation so unique and beneficial, such as our sanctuary herds. In changing to a CIC we are able to address the issues of conflict of interest from the start, and restrictions on trading would also not be an issue as long as the organisation delivered on its aims and operated for the community’s benefit. CIC’s are a lot easier and quicker to set up, so we could be ‘off the ground’ sooner than if we continue pursuing a CIO. It was a difficult decision to change course after so much work, energy and devotion was put into pursuing charitable status, but for the good of the organisation we feel now that this is the best strategy.
Our work towards becoming a charity was also not in vain. We have learnt a considerable amount and are already operating as a transparent and ethical organisation. We have extensive policies and procedures that safeguard our customers, volunteers, beneficiaries and the public. Our constitution is already well embedded in the organisation and has been transferred over to the CIC, so that we continue to operate with the same charitable aims. We’ve accessed a wealth of advice, guidance and training which has made us more efficient, knowledgeable and informed on governance issues. With everything we’ve learnt on this journey we’re now in a very strong position to build an incredibly ethical and effective CIC, and deliver on our aims.
Community Interest Companies essential function as normal incorporated companies, with a few acceptations. Firstly, CIC’s must agree to an ‘asset lock’, in that any profits or assets must not be transferred to any individual for personal gain. Instead, all profits are put back into the organisation with the intention of furthering the contribution to the community. This is something that we have always been wholeheartedly committed to do. Everything we do at The Positive Herd Project is to offer benefits to horses and people alike. Secondly, the organisation has to register with companies house as well as the CIC regulator, and must pass the community interest test before it can become a CIC. Annual reports must be submitted detailing the work that the organisation has done for the interest of the community.
Overall it was not an easy decision. In the future we would not disregard the opportunity to set up a charity perhaps just for the solely charitable aims, which benefit from the existing CIC. However, if this decision is reached it will be a long while yet. For now we are excited to get the ball rolling as a CIC and begin helping as many horses and people as we can as soon as possible. As always thank you for your continued support, we couldn’t do this without you!