A charitable trust is a legal instrument where the donor signs over assets to a third party, known as a trustee, for the benefit of a charity and anyone else the donor specifies. This provides tax benefits for the donor, and also allows the donor to have control over how assets are distributed.
What is the role of a trustee for a charity?
Charity trustees are the people who share ultimate responsibility for governing a charity and directing how it is managed and run. They may be called trustees, the board, the management committee, governors, directors or something else.
Do trustees of a charity get paid?
Most trustees are unpaid, but all trustees can claim reasonable out-of-pocket expenses. Charities can pay some of their trustees (or people and businesses connected to trustees) for services. But a charity trustee may only be paid for serving as a trustee where it: is clearly in the interests of the charity, and.
How long can you be a trustee of a charity?
The Commission endorses the recommended good practice set out in the Charity Governance Code that there should be a time limit of 9 years on trustee tenure. However, charities must develop their own policies in line with the requirements of their governing documents.
Are trustees of a charity liable?
If charity trustees fail to meet their obligations and they have either acted dishonestly and/or unreasonably, they can be held personally liable and required to compensate their charity for any financial loss caused.
Who Cannot be a charity trustee?
Individuals are already automatically disqualified as charity trustees if they have unspent convictions for offences of dishonesty or deception (the same goes for attempting, aiding or abetting these offences). A spent conviction doesn’t disqualify anyone – the disqualification only applies to unspent convictions.
What are the legal obligations of a trustee?
The trustee acts as the legal owner of trust assets, and is responsible for handling any of the assets held in trust, tax filings for the trust, and distributing the assets according to the terms of the trust. Both roles involve duties that are legally required.
How many trustees should a charity have?
The voluntary Charity Governance Code suggests a board of at least five but no more than twelve trustees is typically considered good practice. A review of trustee board size might lead some charities to change their governing document.
Can a charity employee be a trustee?
Most people are happy to become a trustee out of a commitment to the charity’s cause or a sense of civic duty. … However, a trustee cannot be paid for performing his or her duties as a trustee, such as participating in trustee meetings. Nor are they allowed to become a paid employee of the charity.
Can a charity pay its directors?
A charity can, however, pay its directors/trustees if payment to the directors/trustees is permitted by the charity’s constitution, subject to the overriding requirement that the payment is considered by the directors/trustees of the charity to be in the best interests of the charity.
Who can become a trustee of a charity?
Becoming a trustee
You must be over 18 to be a trustee (or 16 if the charity is set up as a company or Charitable Incorporated Organisation). Charities need committed and enthusiastic people from a wide range of backgrounds.
What skills do charity trustees need?
These might include:
- ‘hard’ skills such as legal or financial knowledge.
- ‘soft’ skills such as team working or negotiation.
- knowledge of the community or services the organisation provides.
Is being a trustee worth it?
Becoming a trustee is both a rewarding way to help your community and a way to learn fantastic new skills. It’s an invigorating and dynamic role, which puts you at the very heart of a charity and its work, liaising with a team of like-minded people.