Trustee Duties in Charitable Trusts: A Practical Guide | LegalDocuments.co.uk

Overview

A charitable trust is a particular type of charity structure where trustees hold assets and apply them for purposes that the law recognises as charitable. Unlike a charitable company or a Charitable Incorporated Organisation (CIO), a trust is unincorporated, which means the trustees themselves hold legal responsibility rather than a separate corporate entity.

The charity is governed by its trust deed, which sets out its objects, powers and the rules trustees must follow. Trustees are the people who run the charity. They are responsible for its strategy, its finances, its compliance with charity law, and ultimately for making sure it delivers on its charitable purposes.

In England and Wales, registered charities fall under the supervision of the Charity Commission, and trustees have duties under the Charities Act 2011, the Trustee Act 2000 and general trust law. Trusteeship is usually unpaid, although reasonable expenses can be reimbursed. The role is voluntary in the best sense of the word, but the legal responsibilities are very real.

Key steps

1. Read the trust deed properly. Before doing anything else, a new trustee should sit down with the governing document and read it end to end. The deed defines the charity's objects, the powers trustees have to invest or spend money, the rules for appointing and removing trustees, and any restrictions on activities. Understanding what you can and cannot do is the foundation for every decision that follows.
2. Confirm registration and get familiar with Charity Commission guidance. Check whether the charity is registered with the Charity Commission and review its public record. The Commission publishes detailed guidance for trustees, including the essential CC3 guide, which every trustee should read. Knowing what regulators expect helps you spot problems early and keep the charity's reporting and governance in good shape.
3. Understand the financial position and internal controls. Trustees must have a clear grip on the charity's finances, including its income, expenditure, reserves and any restricted funds. Ask to see recent accounts, the current budget and the bank arrangements. Make sure proper financial controls are in place, that more than one person is involved in authorising payments, and that the annual accounts and return are filed on time.
4. Act collectively and keep proper records. Trustees make decisions as a board, not individually, so regular meetings with clear agendas and accurate minutes are essential. Minutes protect the trustees and the charity by evidencing how decisions were reached, what conflicts of interest were declared, and what information was considered. Good records also make succession and handover far easier when trustees change.
5. Manage risk, conflicts and safeguarding on an ongoing basis. Trusteeship is not a set-and-forget role. Boards should maintain a risk register, revisit it at least annually, and treat conflicts of interest and loyalty seriously, including recording and managing them properly. If the charity works with children or vulnerable adults, safeguarding policies and checks must be in place and reviewed regularly.