Primary Functions of a Charity Trustee
09/10/2024
Charity trustees play a vital role in the governance and strategic direction of a charity. Their responsibilities are legal and ethical, as they ensure that the organization is properly managed and operates in the best interests of its beneficiaries. Here are the key functions of charity trustees:
1. Ensure the Charity’s Compliance with the Law
Trustees must ensure that the charity complies with all applicable laws and regulations, including charity law, employment law, health and safety regulations, and data protection laws.
They are responsible for making sure the charity is registered with the appropriate charity regulator (such as the Charity Commission in the UK) and that annual reports and accounts are submitted accurately and on time.
2. Protect the Charity’s Mission and Purpose
Trustees are the guardians of the charity’s mission. They ensure that all activities, programs, and initiatives align with the charitable purposes set out in the governing documents, for example, the charity's constitution or trust deed. They must also safeguard the charity’s reputation by ensuring that its actions and decisions reflect its values and objectives.
3. Provide Strategic Direction
Senior management work alongside trustees to set the overall strategy and direction for the charity, ensuring that it operates efficiently and effectively to fulfil its mission. They make key decisions regarding long-term planning, fundraising strategies, resource allocation, and major projects or initiatives. This involves regularly reviewing and assessing the charity's performance against its goals.
4. Manage Financial Resources Responsibly
Trustees are responsible for ensuring that the charity’s assets and financial resources are managed prudently and conservatively. This includes overseeing budgeting, financial planning, and investment policies.
They must ensure that the charity's funds are used only for its charitable purposes and that there is proper financial control and risk management in place to protect the charity’s assets.
5. Ensure Accountability
Trustees must be accountable to a range of stakeholders, including donors, beneficiaries, the public, and regulators. They need to ensure transparency in the charity's operations by maintaining accurate records, preparing financial statements, and communicating the charity's impact. They must also ensure that the charity is open to scrutiny and able to answer for its activities, decisions, and performance.
6. Risk Management
Trustees are responsible for identifying and managing risks that might affect the charity’s operations, reputation, or finances. This includes both internal risks (such as financial mismanagement or conflicts of interest) and external risks (such as changes in law or economic conditions). They should regularly review risk assessments and put in place measures to mitigate these risks.
7. Appoint and Support the Charity’s Leadership
Trustees often play a key role in appointing the charity’s executive leadership, such as the CEO or other senior staff. They are responsible for ensuring the leadership has the skills and resources needed to manage the charity effectively. Trustees should provide oversight and support for the charity’s management, ensuring they are held accountable but also given the freedom to lead operationally.
8. Maintain Good Governance
Trustees are responsible for ensuring that the charity operates with strong governance practices. This includes having clear policies in place for decision-making, conflict of interest management, safeguarding, and diversity and inclusion.
Good governance also means maintaining an effective board of trustees, which involves recruiting people with the necessary skills and experience and ensuring that the board works together collaboratively.
9. Act in the Charity’s Best Interest
Trustees must always act in the best interests of the charity, putting its needs above their own personal interests. They need to avoid conflicts of interest and make decisions that benefit the charity’s beneficiaries and advance its objectives. They are required to exercise independent judgment, ensuring that all decisions are made with care and diligence.
10. Oversee Fundraising and Ethical Practices
Trustees oversee the charity’s fundraising strategies and ensure that funds are raised legally and ethically. They are responsible for making sure that fundraising practices are transparent and compliant with legal and regulatory standards. Trustees must also ensure that fundraising efforts do not damage the charity’s reputation or alienate potential supporters.
11. Safeguard Beneficiaries and Stakeholders
Trustees are responsible for safeguarding the people who come into contact with the charity, particularly vulnerable beneficiaries. They must ensure that the charity has appropriate policies and practices in place to protect people from harm, abuse, or exploitation.
In summary, charity trustees are responsible for the charity's governance, strategic direction, financial health, and legal compliance. Their role is critical in ensuring that the charity operates effectively and in line with its mission, while maintaining public trust and accountability.
© Mike Phillips, Purepages Group Ltd 2024