Shares possible in Charities ?

Moorland

I've been told that charities can issue shares or similar to have a say in the running of things. Is this possible....?

Pennywise

Yes, charities can be set up as company's limited by guarantee where a shareholder commits to shares, to get rights to attend general meetings etc., but only pays for those shares if the company goes bust. But, with it being a charity, it's the rights to attend & vote only, there'll never be any rights to dividends or other pay-outs.

Moorland

Thank you for the quick response. I've a lifelong friend now semi retired who took over the running of a local dog charity recently when the original founder died so as to focus more on stopping puppy farming which I completely agree with. However this would eat up all his life savings and prevent him and his wife from going on a world cruise which they have always wanted to do but wouldn't be able to afford both.

So I wondered if I were to buy sufficient shares in their charity could they borrow against them in some fashion to pay for their cruise and expenses etc. ?

p00hsticks

Moorland wrote: »

So I wondered if I were to buy sufficient shares in their charity could they borrow against them in some fashion to pay for their cruise and expenses etc. ?

You're overcomplicating things I think - if you put money into the charity they won't have to, so they can use their own money to go on the cruise.

Obviously they can't use charity money for their own personal holidays. If the charity is for a good cause then they should be looking to raise money from the general public or other sources, not simply be funding it themselves

Moorland

Thank you, but as I said I would like to have a say in the running of things as well if possible because it's such a difficult and subjective issue....

00ec25

no the trustees of a charity cannot use charity assets as security for money borrowed by the charity and spent on personal items such as holidays, that goes without saying...

shares in a charity are not collateral against which any sane lender would offer a loan since the shares are intrinsically unsaleable and thus practically worthless

you seen to have 2 opposing objectives
- you want a say in the running of the charity
yet
- you want them to spend money on themselves

the unrelated solutions are:
a) get yourself appointed as a trustee of the charity
b) give them the money you think they need direct from yourself as a gift

Savvy_Sue

It's not a long-term sustainable situation to use personal funds to keep a charity going: other income must be found. Getting involved as a trustee is a very good suggestion, but is this definitely a registered charity?