Being a charity trustee is a privilege but it comes with significant responsibilities. In our experience, particularly in small charities, Trustees often don’t really understand what those responsibilities are or what they mean. So we thought it might be helpful to set it out here in a short, simple article.

Who are the Trustees?

Over the years there has been lots of research that shows that most Trustees in small charities don’t even know they are trustees. This is because many charities don’t call the role “trustee”, instead using terms like council member, committee member or board member. However, just because the role isn’t called trustee doesn’t mean it isn’t a trustee role. Under section 177 of the Charities Act 2011, the legal definition of charity trustees is ‘the persons having the general control and management of the administration of a charity’. So the people on the board, management committee or similar (i.e. the governing body of the charity) are the trustees. They have ultimate legal responsibility for the direction and strategic leadership of the charity.

Trustee duties

Being a trustee comes with important legal duties, which you can find described in much more detail in Charity Commission guidance. In short they are to:

1. Ensure your charity is carrying out its purposes for the public benefit (and does not go beyond them). This means trustees need to understand the charity’s purposes (often called objects), plan how it should carry them out and be able to explain how the charity’s activities further those purposes for public benefit. If the charity’s money is spent on activities that do not further its purposes, trustees could be required to reimburse that money out of their own pockets.

2. Comply with your charity’s governing document and the law. This means charity trustees must know what the governing document says (usually a constitution, trust deed or articles of association) and follow the rules it sets out. Trustees should take reasonable steps to understand what laws apply to the charity, for example by reading Charity Commission guidance or seeking professional legal advice.

3. Act in your charity’s best interests. This really means that you must act in the best interests of your charitable purposes. In practice that means trustees must take decisions that are in the best interests of the charities current and future beneficiaries. It also means trustees should avoid conflicts of interest and they and people close to them should not benefit personally from the charity without proper authorisation.

4. Manage your charity’s resources responsibly. This means acting reasonably and responsibility, exercising sound judgement and getting professional advice where you need it (e.g. for investment decisions). Trustees must make sure the charity’s assets are only used to further its charitable purposes and are not exposed to undue risk (e.g. by putting in apace appropriate financial controls).

5. Act with reasonable care and skill. This includes committing sufficient time to the role, making use of any specific skills and experience a trustee may have and seeking advice when it is needed. Trustees should act collectively; no single trustee or small group off trustees should have undue influence over decision making.

6. Ensure your charity is accountable, including complying with statutory accounting and reporting requirements to demonstrate the charity is well run. It also means seeking reasonable assurance that staff and volunteers are performing well and within delegated authorities set by the trustees. But this does not mean that trustees should be responsible for, or meddle in, the day to day management of the charity, except perhaps in very small charities where they have significant volunteer management roles as well as trustee responsibilities.

To find out more about the governance support and training we offer, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.