11 key considerations for charity trustees

1. Finding new trustees

What do you Need for Successful Trustee Recruitment?

  • Clearly defined needs. Exactly what type of expertise would the board benefit from? Define hard skills such as accounting and soft skills such as influencing.
  • Clearly defined role. What does the role entail, what is the time commitment and what impact could they help make?
  • A strategic plan of where to market the role. How wide will the net be thrown? A transparent interview process that lays both parties cards on the table as to what they want out of the relationship.
  • A comprehensive and engaging induction process. A process that gets new trustees up to speed and engaged as early as possible.

2. Internal financial controls

What should you be considering? Here are some areas that will need your attention:

  • Accounting records maintained, making sure they are up to date and accessible to the right people.
  • Regular monitoring and reporting of financial activities.
  • Benefits of independent advice and review.
  • Risks of exposure relating to financial crime.
  • Segregation of duties.
  • Practical issues relating to the safekeeping of income and maximising gift aid.
  • Controls over expenditure authorisation and internal
  • banking access and limits.
  • Assets and investments management.
  • Use of funds and restrictions.

3. Collaborative working & mergers

As a Trustee What Indicators Should I Look for in my Charity That Collaborative Working or a Merger may be Worthy of consideration?

  • Is funding under pressure or being cut? A merger or working with another charity could give access to new funding sources, as some funders may see partnership working better as value for money.
  • Is there a high level of overheads where synergies could be achieved by combining resources?
  • Are there opportunities to knowledge share with a similar organisation?
  • Is there an opportunity to improve your charity’s public profile?

4. Investments

Why do Charities Invest?

Charities usually invest to generate a return to help them carry out their objectives. This ranges from largescale investment by charities wholly reliant on investment income, to the investment of funds that form part of a charity’s reserve buffer.

Increasingly, charities are looking to invest funds not just to generate a return, but also to deliver their charitable objectives. These are known as mixed motive investments. An example is a loan to a subsidiary company where the subsidiary’s activities either directly deliver or support the charitable objective.


5. Trustee meetings & decision making

Top tips:

  • Set the agenda with an estimated time allocation for each item.
  • Be realistic and don’t overfill the agenda.
  • Identify the purpose of the item – is it an update/ verbal report, to be discussed, requires a decision, policy review? This is helpful to ensure everyone is prepared for all items.
  • Prioritise the agenda – leave the less important items to the end, so if you run over you can defer to the next meeting.
  • Include 5 minutes at the end to reflect on what could be improved for future meetings.

6. Trading & tax

How do I Know if I am Doing a Good Job?

  • Make sure the charitable activities of the charity are within those set out in the governing document.
  • Make sure any ancillary trading has not, over time, developed its own distinct customers.
  • Check that fundraising activities are clear in setting out what is a donation and what is a payment in exchange for a good or service.
  • Review the basis of the ownership of a trading subsidiary to make sure that it remains a good investment of charity funds.
  • Commission a charity tax review by your specialist charity accountant.

7. Campaigning, lobbying & political activity

Charities can lawfully carry out campaigning and political activities. In brief the position is that:

  • Charities don’t have an obligation to either campaign or undertake political activity;
  • If chosen to do so, it must be fundamentally to further the charity’s charitable purposes for the public benefit;
  • Activities should be in the best interest of the charity’s beneficiaries; and
  • Remaining neutral at a party political level is essential.

8. Risk management

It is no secret that charities often have limited resources available to invest in a risk management process, and it probably isn’t surprising that the task is sometimes delegated to one or two individuals who may piece together a rudimentary risk register as a desktop exercise.

With such a limited perspective of the organisation, the resulting discussions at board level tend to quibble on the deemed severity or likelihood of risks, or focus on one or two key risk areas rather than standing back and considering whether the overarching framework is fit for purpose.

9. Expenses

As a Trustee, What Should I be Doing?

  • Consider carefully “CC11: Trustee expenses and payments” and “OSCR: Guidance and Good Practice for Charity Trustees”, and the implications of this for your charity.
  • Ensure that your charity has an expenses policy, and that it is fit for purpose.
  • Review the policy on a regular basis, or as circumstances change.
  • Ensure that all trustees are aware of the policy, and adhere to it.
  • Put procedures in place to ensure that the expense policy is adhered to.

10. Fundraising

What are Your Responsibilities as a Trustee? There are six fundraising principles which summarise the responsibilities of a trustee:

  • Plan effectively
  • Supervise your fundraisers
  • Protect your charity’s reputation, money and other assets
  • Identify and ensure compliance with laws and regulations
  • Identify and follow recognised standards
  • Be open and accountable

11. Conflicts of interest

At a glance, trustees have a legal duty to act only in the best interest of the charity. Hence they must not put themselves in a position where their duties as a trustee may conflict with any personal interest they (or their related party connections) have. Of course in reality, many trustees may end up with a conflict. The key is to be aware of any conflict and manage it effectively.

To manage a conflict, trustees should use the following steps:

  • Identify conflicts of interest
  • Prevent the conflict of interest from affecting the
  • decision
  • 3 Record the conflict of interest.

Get in touch

Jamie Davidson

Jamie Davidson

I am an experienced auditor with strong technical skills who provides audit and accounting services to our clients across a wide range of sectors. I trained with a Big 4 firm and after qualifying in…