Charity Preschool running out of funds

[PreschoolChair2024]

Hi everyone, I’m the chair of a charity run preschool and we are in a bit of a unique situation. We are in the process of transferring the preschool to an Educational Trust and merging with the primary school but unfortunately it has been delayed several times.

As a result of all the delays we are now desperately running out of funds as each month we have more wages to pay more insurances to renew etc and very little income in the way of fundraising as the committee is hanging on by a thread. Each time there is a delay there it is only by 6 weeks or so at a time so does not allow us much time to adjust.

We are extremely hopeful that the transfer will finalise at the end of Feb but this also coincides with how far our current funds will take us. My question is if we are to wait it out and we have yet another delay and we run out of funds completely would the trustees be personally liable for any outstanding costs? Would we be acting unlawfully if we do not act now by closing down the charity whilst we still have funds to settle all outstanding payments?

We are reluctant to close the preschool and risk staffs jobs and children’s placements if all is going ahead in time BUT we also don’t want to intentionally carry out any wrong doing or risk the trustees being liable.

any advice at all would be greatly appreciated. We want to save our preschool x x

just to add I am very inexperienced, I was thrown in at the deep end well into the process of the merger with many problems to solve along the way and I’m desperately trying to hold it together to see the merger through.

[NewName24]

I would speak to the Early Years Team at your Local Authority.

Or even, potentially PACEY to see what they say.

[PreschoolChair2024]

Thank you for your advice, we’ve given our local Early Years Team and they are going to get back to us x x

[Heavenssakes]

What is the format /entity of your charity?
I assume this is a charity , registered with the Charity Commision?
But is there a Charitable Incorporated Organisation? Or a limited not-for-profit Company? If there is, the liability of the Charitable Trustees is limited.
If there isn't, the Trustees may have personal financial liability.

It's crucial that the charitable Trustees behave legally correctly in this situation.
Please, ring the Charity Commision tomorrow morning to seek advice.

Contact CentreOur advisors are available Monday to Friday, 9am to 5pm, except for Wednesday between 11:00am and 1pm when we are closed for staff training.
0300 066 9197

https://www.gov.uk/guidance/financial-difficulties-in-charities

[PreschoolChair2024]

Thank you so much for your guidance, this is the clarification we needed to know how to proceed.