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At what point can I become a CEO? (Anonymous post 🤫)

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Ocean King Staff Senior Community Executive at CharityConnect Posted 1 year ago

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This question is from a member of our community that wishes to remain anonymous:
Can I be a CEO of a charity at the founder stage, or does it need to be a foundation? It isn't formed yet.
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Shelley Hart

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CEO at Havering Volunteer Centre 1 year ago

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Hi, Johns reply is very comprehensive and good advice.
As a CIO with a foundation constitution it works for my charity.
I am the founder and CEO and an ex-officio trustee
We have 6 full trustees and I do not have any voting rights on the board.
As mentioned in the comments, you need your constitution to state the vision and mission of your charity and if that is the CEO is the founder this must be mentioned in to Charities Commision on your documentation.
 
Its not scary but you need to get it right and CC is very helpful and will help they have model constitutions and you then add the information regarding your charity.
Good luck
 

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Jon Benjamin

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Charity consultant and lawyer advising on governance, compliance and related issues at MJB Consulting 1 year ago

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Your short post actually poses a number of questions!
 
You say the charity isn't formed yet and refer to a foundation. I'm inferring from this that the intention is to set up a registered charity, but the most appropriate structure for that will probably be a CIO (Charitable Incorporated Organisation) and not a foundation. A CIO is like a company but needs only to be registered with the Charity Commission, and not Companies House, which means there's less administration in future. A CIO is a legal entity in its own right and can employ people, which means that paid staff, such as a CEO, would be employed by the CIO. CIOs, like any charity, are run by their trustees, and trustees cannot be employed (in most cases).
 
Bearing all of that in mind, it's often the concern of those who found charities that they want to run everything and be paid and that's frankly not the way it works. The Charity Commission (and the law) doesn't allow one person to run everything, draw a salary and have no oversight from anyone else.
 
As a paid CEO, you could have day to day control of the charity, but would still ultimately be answerable to the trustees who could decide to retain your services, or not. As a trustee, you couldn't be paid and you would be just one of several (minimum of three) people making decisions, all with the same level of power and responsibility. The trustees must act in the best interests of the charity and that doesn't necessarily mean that employing the founder is the best thing to do, for ever and ever. It may be to start with, but circumstances change.

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Donald Schloss

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Chief Executive at Adult Dyslexia Organisation 1 year ago

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Jon Benjamin   What is the exact word in you need to have in your constitution to have your founder and CEO paid as a trustee?
Also would this work if the chairperson was not the CEO and they had at least three trustees with voting rights?

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Jon Benjamin

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Charity consultant and lawyer advising on governance, compliance and related issues at MJB Consulting 1 year ago

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Donald Schloss   Trustees can't be paid for being trustees. A trustee may have another role within the charity apart from that of trustee and the Charity Commission could be asked to agree a 'scheme' (an arrangement) to permit them to receive a salary for this, but
  • it's highly unlikely to be allowed if the governing document prohibits this, which most do
  • it would have to be shown that this was in the best interest of the charity
  • the trustee being paid cannot have any role in the decision to pay them
  • the paid trustee would have to be in the minority
  • the level of pay would have to be a reasonable market rate and it would have to be shown that the trustee was the best person for the role.
 

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Geoff Roberts

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Trustee at The Aire Rivers Trust and Participate Projects 1 year ago

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The title has no legal basis, so you can call yourself what you like, when you like.

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Andrew Studd

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at 1 year ago

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If its not yet formed then you will be asked as part of the registration post if a trustee or founder is to be paid. you will need to explain why this is necessary. this is required as a charity must be established for public benefit and any private benefit (ie pay to founder) is only incidental to the public benefit. if you also plan to be a trustee (and paid CEO) you will need a specific provision in the charity's constitution to allow a trustee for being paid as CEO. You cannot pay a trustee as an employee using the powers which allow a trustee to be paid for provisoin of certain services

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Jamie Farwell

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Chairperson at EKGC 1 year ago

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Hi - New here ... but I wanted to have a look through some of questions being asked before I start asking my own :) 
Pre amble around this being my advice and not that of any legal entity etc etc 
I am of the understanding that this is fine (and quite common is charity start ups) As the founder and CEO, you would be responsible for setting the vision and mission of the charity, developing its programs and initiatives, fundraising, and overseeing the organisation's operations.
I work in one Charity and Chair the board of another.  I would advise anyone in the early stages to just be mindful of the legal and registration requirements to ensure your compliance.
Hope this is some help

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