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Tips for Charities: Get Good Advice Early

Thu Aug. 8th 2013


Charities by their very nature have limited financial resources. For some charities, the well often looks like it is running dry. In such situations there is quite often a temptation to avoid seeking legal assistance. And even if there isn't a crisis looming, some charities attempt significant changes in their structure or amendments to their constitutional foundation on their own, without legal guidance, in order to save money. This can be a fundamental mistake and extremely costly for charitable organisations in the future.

Why?

Because even in the world of charities, the old adage that an ounce of prevention is worth a pound of cure holds true. Therefore, in basic economic terms, charities are better off seeking legal advice at the outset because the benefit of that advice could save them a truck load of trouble later. Even in the absence of conflict, charities should still obtain professional legal assistance when contemplating changes to their structures or improvements to their constitutional processes. And where matters of governance or commercial arrangements are concerned, then getting legal advice early is simply a "no-brainer". We regularly see the mishaps and the occasional carnage caused when charitable boards and officers choose to proceed down some treacherous unlit path without the illumination of legal advice. It's not a pretty sight, especially when the charity is faced with large legal (and tax) bills in the aftermath.

It is not uncommon for charities to attempt their own legal work but quite often the corresponding outcome is the same as trying to perform your own knee operation. Not the smartest way to save pennies. But obtaining legal advice is not as simple as it sounds. There are 2 key requirements:

a)It must be done early; and,

b)It must be given by an experienced practitioner in charities law.

An acquaintance who is the Chief Financial Officer of a large national charitable institution, when inviting our firm to provide legal services, put it best when he said "sometimes you just need a specialist; you don't go to your local GP to get advice on a cancerous tumour". Enough said.

Good advice, early on – simply elementary!