Understanding your duties as a charity trustee
Becoming a trustee of a charity can be very exciting, particularly if it is a cause you feel passionate about. However because of this it can be possible to lose sight of what your key legal duties are.
However, understanding the responsibility which comes with such a role is incredibly important. I therefore thought it would be useful, in our first charity newsletter, to set out some clear guidance about what your duties are as a charity trustee.
1. The charity is carrying out its purposes for the public benefit
This may seem obvious, but you and your co-trustees must ensure that the charity is carrying out works for the purpose it was set up, and for no other reason. To do this, you should fully understand the governing documents for your charity which set out the charity’s purpose(s). You should carefully plan what your charity should do and what you want to achieve from it. This also means that you will always be able to explain how the charity’s activities support these purposes, and how they benefit the public.
As a trustee, if you authorise any of the charity’s funds to be spent on the wrong purpose, you could potentially be personally liable to reimburse that spending back to the charity.
2. You need to comply with your charity’s governing document and the law
As with the above, the starting point is to be fully aware of the charity’s governing document, ensuring that the charity is complying with what has been set out.
It is your responsibility to take reasonable steps to find out and comply with any legal requirements that affect the charity. This includes taking legal advice when needed. If your charity is registered, it must ensure that the details on the register are kept up to date and the correct financial information is sent to the Charities Commission in its annual return or annual update.
3. Act in the charity’s best interests
Again, this may seem obvious but it is a key responsibility to ensure that you and your co-trustees make decisions that are only ever in the charity’s best interests. Decisions must be made in an informed and balanced way, considering both the long and short term effects of those decisions.
It is also important to avoid placing yourself in a position of conflict between your personal interests/loyalty and your duty to the charity. In addition, you cannot receive any benefit from the charity unless it has been properly authorised and is in the charity’s best interests. This not only includes you but anyone connected to you, such as a partner, dependent child or business partner.
4. You must be responsible
Being a charity trustee means that you have to act responsibly, reasonably and honestly. This is known as the duty of prudence which is about exercising sound judgment. This involves ensuring the charity’s assets are only used to support or carry out its purpose, that there are no unnecessary risks, that the charity is not over-committed, to take special care and advice when investing or borrowing funds, and to ensure compliance with any restrictions on spending funds.
You should ensure that safeguards are in place to protect the charity from fraud or theft.
5. Act with reasonable care and skill
As a trustee, you should always demonstrate reasonable care and skill and ensure that you utilise any relevant skills or experience. You should allow time to carry out your role as a trustee, including attending and actively participating in all trustees’ meetings. Being a trustee should not be seen as a way to enhance your CV but allow you to be actively involved in something you are passionate about.
6. Your charity is accountable
There are statutory account and reporting requirements with which you must comply. You should therefore be able to demonstrate that your charity is complying with the law as well as being run effectively. You should ensure there is accountability within the charity, particularly if any tasks or responsibility are delegated to other members of staff or volunteers
Article written by Anna Wonnacott, solicitor.