What do charity trustees need to know?

  • It can be difficult for trustees to keep up-to-date with current regulations and best practice
  • However, it is crucial that boards know how to act in the best interests of their organisation
  • We share some of the best Charities Commission guidance on how to help ensure boards perform well

These are challenging times for charities. High profile media stories about charity wrongdoing, such as the cases of the harassment of Olive Cooke and the collapse of Kids Company, have highlighted bad practice and encouraged many to question how organisations are run.

Trustees have a responsibility to oversee all areas of activity, from fundraising to recruitment. They should always act in the charity’s best interests and ensure their charity is carrying out its purposes for the public benefit.

Guidance produced by the Charity Commission (the regulator of charities in England and Wales) seeks to educate trustees of charities and non-profits of all sizes.

We share some of the guides it has produced to help ensure your board is performing well and leading your charity forward.

1. Healthcheck your organisation

The Charity Commission’s 15 questions to ask checklist contains suggestions about financial health, governance, strategy and using resources.

It is intended to be used when reviewing how a charity operates, either during informal discussions or as items on the agenda at trustee meetings, AGMs, away-days or planning meetings.

The checklist also links to additional reading and sources of help.

2. Making decisions and managing risk

This guide to charity trustees and decision making includes the principles of how decisions should be made and recorded. It covers the principles of good decision making and includes examples of acting in the interests of the charity and avoiding ‘irrelevant factors’.

3. Types of risk

Taking decisions involves risk. This page on how to manage risks in your charity looks at types of risk, such as reputational risk or receiving less funding or donations, and how to manage them.

4. When things go wrong

The Charity Commission’s Fraud Advisory Panel report, ‘Tackling fraud in the charity sector’ states that: “Building a fraud-resilient charity is a job for everyone, everywhere, and at every level.”

The report outlines the three stages of the fraud-risk management framework – prevention, detection and response – and describes the importance of building an ethical culture.

5. Know your duties

Whether you are a new or long-standing trustee, it is important to be fully aware of your duties. The Essential Trustee guide sets these out as:

  • Act in your charity’s best interests
  • Manage your charity’s resources responsibly
  • Comply with your charity’s governing document and the law
  • Ensure your charity is carrying out its purposes for the public benefit
  • Act with reasonable care and skill
  • Ensure your charity is accountable

If you are a trustee of a charity based in Northern Ireland or Scotland, read the guidance produced by the regulators there.

All trustees should be aware that they can be held liable to their charity for any financial loss they cause or help to cause. This applies to any type of charity, whatever its legal form.

Our recent guide to protecting trustees from personal liability looks at indemnity insurance for trustees. It also links to our series of guides about risk including reputation, major incidents and cyber risks.

6. Recruiting and building the team

Building a good team of trustees is key to the effectiveness of the organisation. The Charity Commission’s guide on finding new trustees describes who can and who can’t be a trustee.

To support recruitment, Knowhow Nonprofit has a series of sample job descriptions for the various roles on a board. Its online Trustee Training course covers recruitment as well as a self-assessment toolkit to help build board effectiveness.

7. Developing new skills

For many trustees, it can be difficult to keep up with the challenges of running a modern organisation.

The Charity Commission’s new resource aims to help trustees understand the role and potential of digital. It highlights the main questions trustees should start by asking to assess what their organisation is doing or could be doing.

In a similar vein, the Institute of Fundraising has produced a handbook for trustees. The Trustees and Fundraising guide includes an introductory video as well as a PowerPoint presentation for boards to use.