A charity trustee is one of the people with ultimate legal responsibility for running a charity. The Charity Commission describes trustees as having "independent control over, and legal responsibility for, a charity's management and administration". You must be at least 18 (or 16 for a charitable company or CIO), not disqualified, and you are normally unpaid. The Commission's guidance, The essential trustee (CC3), sets out six key duties.
The role is different from being the trustee of a family or private trust. A private trustee manages assets for named beneficiaries under a trust deed and trust law; our guide to the duties of a trustee covers that role. A charity trustee governs an organisation that must pursue its charitable purposes for the public benefit, under charity law and the regulator's supervision.
Who counts as a charity trustee
The title does not matter. Under CC3, everyone properly appointed to the body with "ultimate authority and responsibility for directing and governing the charity" is a charity trustee in law, "whatever they are called (trustees, directors, committee members, governors or something else)". The directors of a charitable company and the management committee of an unincorporated association are therefore trustees. If you are unsure, the charity's governing document — its constitution, trust deed or articles — will say which body has that authority.
The rules below are for charities in England and Wales. Scotland and Northern Ireland have their own regulators and guidance.
The six duties in CC3
- Ensure the charity is carrying out its purposes for the public benefit. Understand the purposes in the governing document and be able to explain how every activity furthers them. Spending funds on the wrong purposes can leave trustees having to reimburse the charity personally;
- Comply with the governing document and the law. This covers charity law and every other law that applies to the charity, from employment to data protection;
- Act in the charity's best interests. Make balanced, adequately informed decisions, avoid conflicts of interest, and take no benefit unless it is properly authorised;
- Manage the charity's resources responsibly. The duty of prudence: use assets only for the purposes, avoid undue risk, do not over-commit, and take special care when investing or borrowing;
- Act with reasonable care and skill. Use your skills and experience, take advice where needed, and give the role enough time, including preparing for and attending meetings;
- Ensure the charity is accountable. Comply with the statutory accounting and reporting requirements and be able to show the charity is well run.
Who can be a trustee
The minimum age is 16 for a charitable company or a charitable incorporated organisation (CIO), unless the governing document sets a higher age, and 18 for any other type of charity.
Some people are automatically disqualified. The reasons listed in CC3 include:
- Director disqualification. Being disqualified as a company director;
- Dishonesty offences. An unspent conviction for an offence involving dishonesty or deception;
- Insolvency. Being an undischarged bankrupt, or subject to a current IVA or similar arrangement with creditors;
- Previous removal. Having been removed as a trustee by the Commission or the court for misconduct or mismanagement;
- Sex offences. Being on the sex offenders' register.
The rules were widened by section 9 of the Charities (Protection and Social Investment) Act 2016, fully in force from 1 August 2018. That reform added further specified offences, such as terrorism and money laundering offences, and extended disqualification to senior manager positions at chief executive and chief finance officer level. It is the function, not the job title, that counts. In most cases a disqualified person can apply to the Commission for a waiver, but the Commission cannot give one where the charity is a company or CIO and the person is disqualified as a company director. Acting while disqualified is normally an offence, and the Commission can order repayment of anything received from the charity during that period.
Are charity trustees paid?
Normally not. CC3 calls this "the voluntary principle": trustees "usually volunteer" their services and receive no payment for their work. Trustees can claim reasonable expenses, such as travel and childcare, so that nobody is out of pocket. Paying a trustee, or someone connected to them, for services or as an employee needs legal authority. The payment must be in the charity's best interests and the conflict of interest must be managed. A trustee who receives an unauthorised payment or benefit must repay it, and the Commission cannot relieve them of that duty.
How trustees make decisions
Trustees act collectively. CC3 says no one should be able to "direct the trustees or drive decisions through" without proper consideration. Decisions do not usually have to be unanimous, depending on the governing document, but once the board has decided, every trustee must abide by the decision, including those who disagreed. Conflicts of interest or loyalty must be declared, prevented from affecting the decision and, as good practice, recorded.
Personal liability
The Commission describes personal liability as "extremely rare, but not impossible". It can arise in two ways:
- To the charity. Trustees can be liable for a loss they cause by acting improperly, but the Commission and the courts can relieve trustees who acted honestly and reasonably, and rarely enforce liability against an unpaid trustee who made an honest mistake;
- To third parties. In an unincorporated charity the trustees sign contracts personally, and may have to meet any shortfall if claims exceed the charity's assets. Incorporation as a company or CIO generally puts that liability on the charity itself.
The best protection is the ordinary discipline the duties already require: regular minuted meetings, conflicts dealt with properly, reliable financial reports and accounts filed on time. Indemnity insurance and indemnity provisions in the governing document can add to that.
Support for trustees
Many trustees join for the cause and inherit the accounts. Our guide to accounting for charities explains the SORP and the reporting thresholds, and the Gift Aid guide covers the most common tax relief. Acumon's accountants for charities prepare trustees' annual reports and accounts, and our charity audit team provides independent examinations and audits so trustees can meet the accountability duty with confidence.