Trustees join charities usually at the invitation of the other trustees who are interested in the charity's activities and objects. Like any endeavour a little training can go a long way. No one should underestimate the responsibilities of trustees. CC3 The Essential Trustee What's required of a charity trustee, including your responsibilities to your charity.
Trustees fail at their peril. Breach of Trustee duties explained
Some Trusts are ongoing charities attracting donations or subscriptions and paying expenses. Some last (in theory) for a short time for example the executors who are granted probate and complete probate administration and establish the residue of trust funds before becoming Trustees and distributing the residue of the trust funds to the beneficiaries.
Every charity senior management should have two designated individuals
A Chief Executive is a person who is accountable only to the trustees, and who carries overall responsibility for the day-to-day management and control of the charity.
A Chief Finance Officer is a person who is accountable only to the Chief Executive or the trustees, and who is responsible for the overall management and control of the charity’s finances.
Accounts background - Charity Fund Accounting
Its fine to replace the term charitable activities with a more descriptive title for example if your charity is a museum then you could use the description Museum Admissions which is more relatable to the narrative in the Trustees report
Tax background
Gift Aid
Its important to appreciate the difference between public benefit and private benefit. For example much commercial activity will have a positive ethical benefit however that doesnt mean it is charitable. The essence of charitable activity is the disbursing of funds in which the donee of those funds has no interest save that it be of public benefit rather than a named individual.
Trustee duties
"The First duty of a Trustee is to make himself acquainted with the the terms of his trust whether will or deed. His second duty is always to bear those terms in mind. His third duty is never to depart from them. His fourth duty is to take as much care of the Trust property as (being a prudent man of business) he is accustomed to take of his own. The fifth duty concerns investments.
His sixth duty is to give the persons beneficially entitled in the trust complete information as to the state of the Trust funds and otherwise whenever required to do so and furnish such persons with accounts.
The seventh duty of a Trustee is not to make a penny piece of personal profit out of the Trust business unless he is a professional man specially authorised by the Trust, Deed or will to do so.
His eighth duty is to co-operate with his co-Trustee or co-Trustees in a friendly and reasonable spirit and to consult him or them about all matters connected with the Trust and to retire (on being paid costs, charges and expenses) whenever requested so to do by the parties interested.
And ninthly and lastly whenever any question of difficulty actually arises as to the extent of his powers or the nature of his duty to take the opinion of a Judge in Chambers by way of summons."
Legal Responsibilities
UK charity framework
Trustees
Legal responsibilities
Charity regulation
What if it all goes wrong?
**** Learning
Describe what makes an organisation charitable and describe the legal structures they may adopt in the UK
Name the UK charity regulators
Outline the contents of a charity's governing document
Describe how charities operate to fulfil the public benefit
Explain the role of a charity trustee, how to become one and any exclusions that apply
State the duties of a charity trustee
List the main legislation that applies to charities and consider other legislation that may apply
Consider other regulators that may be interested in charities
Identify trustee conflicts of interest and consider how to manage them
Plan what to do when problems arise
**** Links
A Trustee will need to bear in mind various legislation in managing the activities
Managing Board Dynamics
Board effectiveness
A potential problem
Summary
Financial Responsibilities
Trustees and finance
Managing finances
Internal controls
Charity taxation
******
The Role of the Treasurer
A board is not required to have a treasurer; however, it is a useful role as the treasurer pays close attention to the finances and can be useful to the other trustees in answering questions about finances. Boards may find it useful to set up sub-committees designed to interrogate a particular area of governance. One of these could be the finance and audit sub-committee.
The treasurer is not formally required to have accounting qualifications or experience, although it may be a difficult role to undertake without this. Having a treasurer does not remove the need for all charity trustees to be responsible for the charity’s finances.
A key role in the effective governance of many charities is that of the treasurer as an ‘office‐holder’ among the charity trustees. While financial matters are the responsibility of all trustees, it is often the treasurer that the other trustees look to for advice, guidance, and reassurance on all aspects of the charity’s financial management and reporting, control systems, solvency, investments etc.
The treasurer monitors the financial administration of the charity and reports to the board of trustees at regular intervals on its state of financial health, in line with best practice, and in compliance with the governing document and legal requirements.
The main responsibilities and duties of the treasurer include:
Overseeing and presenting budgets, management accounts and annual financial statements to the board of trustees, and advising on the financial implications of the charity’s strategic plan.
Leading in the board’s duty to ensure that proper accounting records are kept, and that financial resources are properly controlled, invested, and economically spent, in line with good governance, legal and regulatory requirements.
Leading in the development and implementation of financial reserves, cost‐management, and investment policies, and monitoring and advising on the financial viability of the charity.
Liaising, where applicable, with the appropriate member of staff responsible for the financial activities of the organisation, such as the Finance Director.
Overseeing the implementation of and monitoring specific financial controls and adherence to systems, and overseeing the charity’s financial risk‐management process.
Chairing any finance committee (if applicable) in line with standing orders and terms of reference, reporting back to the board of trustees, and liaise between the trustee board and the external auditors on specific issues such as the Auditors’ Management Letter and the related board representations.
The extent of these duties and the treasurer’s involvement will vary with the size and complexity of individual charities.
Planning for Success and Impact
Some key terms
Strategic planning
Developing a strategy
Business planning
Strategy
Impact measurement
In practice
Public benefit
Impact
Summary
Risk Management
What is risk management?
Risks within charities
Managing risks
Summary
****
Managing Relationships
A charity's people
Expectations
Golden rules
*****
