Something isn't working. What are we actually trying to fix?

England and Wales: This page sets out the diagnosis in full. Scotland: the same three questions and the same answer about pausing, but different routes once you know which problem you have — one consent gateway, and a separate rule for becoming a SCIO. Northern Ireland: the same diagnosis; there is no CIO, but every route this hub describes for closing or merging already exists in Northern Ireland.

Can a struggling charity go dormant?

No. A charity in England and Wales has no dormant or paused status. For the trustees of a struggling charity, that is the place to start. This page comes before every other page in this hub: it tells you which of them you need. A pause is the option most boards weigh first. The law points the other way. Charities Act 2011 s.34 (England and Wales), verbatim:

“The Commission must remove from the register— (a) any institution which it no longer considers is a charity, and (b) any charity which has ceased to exist or does not operate.”

That “must” is a duty on the Charity Commission, not a choice. A charity that stops operating is exactly what the section is aimed at.

The Commission also looks. Its Revitalising Trusts Programme exists to find charities that are inactive or ineffective. It offers them three ways out: transfer the assets to a similar charity, close, or change the purposes so the charity can work again. If the trustees do not respond, the Commission can use its statutory powers.

Filing nil returns does not create a status either. It may keep you off one list. But nil filing is not recognised as dormancy. Every normal duty carries on until the charity is closed or removed. That covers accounts, returns, trustee duties and the register.

So the real choices are to carry on, to change something, or to stop properly. Waiting is a decision to carry on with nobody doing anything.

Scotland now has its own express removal power. It is in the Charities and Trustee Investment (Scotland) Act 2005 s.45A, in force in Scotland since 1 April 2024. OSCR may remove a charity that has failed to send its accounts and does not respond to OSCR’s notice in time.

The three questions: purposes, structure, stopping

Ask the three questions separately. The problem usually arrives as one lump: fewer users, less money, tired trustees, a founder leaving. Take it apart before you decide anything.

1. Purposes. Ask whether your purposes still describe what you should be doing. If the need has moved, the purposes may need to change. A purposes change is a regulated alteration in England and Wales, and the hardest change on this list to get.
2. Structure. Ask whether your legal structure is causing the problem. Take an unincorporated charity whose trustees carry the risk personally, or which cannot sign a lease in its own name. That charity has a structure problem. New purposes will not fix it.
3. Stopping. Ask whether to stop. Closing, or merging into another charity, is a proper answer. It is not a failure, and it has its own steps.

Write down which one it is. Most boards find it is one, occasionally two. It is rarely all three.

The most common misdiagnosis: structure or cash treated as purposes

The most common mistake is treating a structure problem as a purposes problem — or treating a cash problem as either.

Changing the purposes can feel like the constructive response to decline. It sounds like a fresh start. But a charity that cannot pay its bills does not need new objects. It needs to know whether it is insolvent, and it needs to know now.

That is the job of a later step in this hub, recognise financial distress early.

The point to take from here is short. If creditors are going unpaid, do not spend the next months on an amendment application. Put the charity’s finances on the agenda of every trustee meeting. Take advice from someone who deals with insolvency.

The route for each answer, by legal structure

Once you have named the problem, the route depends on your legal structure. The same words hide different processes.

Purposes. England and Wales has four amendment routes, one for each structure, not one. Check which amendment route your charity uses sets them out. Change your charitable purposes covers the purposes change itself.

Amend your governing document covers the smaller changes trustees can make themselves. The wider review of the document belongs to the governance hub: review and, where needed, amend your governing document.

Structure. A charitable company can convert to a CIO by a statutory process. The same legal person continues. An unincorporated charity cannot convert at all. It sets up a new CIO, transfers everything and closes the old charity.

No route leads back: nothing in the law turns a CIO into a charitable company. See convert a charitable company to a CIO and move an unincorporated charity to a CIO.

Stopping. Merging starts with assess whether a merger is the right answer. Closing starts with financial distress and runs to the end of the hub, through decide to close.

Scotland and Northern Ireland change the routes, not the diagnosis

Scotland. The three questions are the same. The routes are not. Most of the big changes go through one OSCR consent gateway rather than four structure-specific routes.

For structure, a Scottish charitable company can convert to a SCIO under the Charities and Trustee Investment (Scotland) Act 2005 ss.56–58. That conversion needs OSCR’s own consent. An unincorporated Scottish charity cannot convert at all. It has to form a new SCIO and transfer its assets — the same shape as in England and Wales.

Northern Ireland. Northern Ireland has no CIO form. Part 11 of the Charities Act (Northern Ireland) 2008, which would create it, has never been brought into force. People often read that as meaning a Northern Irish charity cannot close or merge. It does not mean that.

Two laws already give a working route for winding up and strike-off. They are the Insolvency (Northern Ireland) Order 1989 and the Companies Act 2006, as they apply in Northern Ireland. The Charities Act (Northern Ireland) 2008 gives small unincorporated charities a transfer power. The three-question diagnosis applies unchanged.

The problem statement, agreed and minuted

Write the diagnosis down and agree it: one page, agreed at a trustee meeting and minuted. It is short, and it matters:

• The problem in one sentence — what is going wrong.
• Which of the three it is — purposes, structure or stopping — or, if it is cash, that it is cash.
• What you ruled out, and why. Include “pausing” and record that it is not available.
• The next step in this hub, and who is taking it.

The statement stops the board drifting back into the wrong question at the next difficult meeting. Then open the page for your answer. For a purposes or structure change, check which amendment route your charity uses. For a merger, assess whether a merger is the right answer. If the problem is cash, recognise financial distress early.

Common mistake: treating a structure problem as a purposes problem, or a cash problem as either

The three questions arrive tangled together. And “change our objects” feels like the constructive response to any decline.

A charity that cannot pay its bills does not need new objects. It needs the two insolvency tests and a standing agenda item — both in recognise financial distress early. Effort spent on an amendment application while creditors go unpaid is effort spent in the wrong step.

Common mistake: reaching for the fourth option — “let’s just pause for a while”

It feels like the low-risk middle path between carrying on and closing. No such status exists. Charities Act 2011 s.34 requires the Commission to remove a charity in England and Wales that does not operate. And the Revitalising Trusts Programme exists to find inactive and ineffective charities.

Filing nil returns is not a recognised dormancy status. Every normal obligation continues until the charity is closed or removed.

Worked example

Wrenfield Village Hall’s bookings have fallen away and the bank balance is dropping. At a trustee meeting, one trustee proposes new objects “to attract funding”.

The chair asks the three questions in order.

Purposes. The objects still describe what the hall does. Nobody thinks the village needs something else.

Structure. Being an unincorporated association is not what is causing the decline.

Cash. The balance is falling. That is an insolvency question, not an amendment question.

A second trustee suggests pausing until things pick up. The chair notes that the status does not exist, and the minute says so.

The outcome is a written statement, agreed by the trustees: the problem is cash. The distress step, Recognise financial distress early, is next. The amendment idea is parked, and the dormancy option is minuted as unavailable.