Find out about making valid trustee decisions that are in your charity’s best interests by clicking on the numbered links below.
It is important to follow these steps when making significant or strategic decisions, such as those affecting the charity’s beneficiaries, assets or future direction. The Charity Commission doesn’t expect trustees to follow them step-by-step for minor decisions
- Follow the principles
- Keep records from the start
- Follow your charity’s rules and the law
- Get the information you need
- Plan your meetings
- Manage conflicts of interest
- Work together to make decisions
- Involve others at your charity
These are the standards that the courts have developed for reviewing decisions made by trustees. Trustees must:
- act within their powers
- act in good faith and only in the interests of the charity
- make sure they are sufficiently informed
- take account of all relevant factors
- ignore any irrelevant factors
- manage conflicts of interest
- make decisions that are within the range of decisions that a reasonable trustee body could make
They must be able to show how they have followed these principles.
From the Charity Commission
Coronavirus continues to have a major impact on charity events and trustees need to consider how and if they can hold meetings.
Charitable companies and Charitable Incorporated Organisations (CIOs) can hold AGMs and other members’ meetings online. This temporary amendment is in the Corporate Insolvency and Governance Act 2020 and also applies to exempt charities that are community benefit or friendly societies. It was extended from 30 September to 30 December 2020 but may be extended again if the government thinks this is needed. We will update with any changes if they happen.
For other types of meetings, or for any other type of charity, trustees need to check if their charity’s governing document allows them to hold meetings online or by telephone. Where it does not, an alternative may be to amend it to allow meetings to be held in this way.
Holding meetings online or by telephone
In the current situation, it may be difficult to hold face-to-face meetings. Some charities have clauses in their governing documents that allow them to meet virtually or to use telephone facilities, so we advise trustees to check their governing document and see if they can make amendments themselves to facilitate changes as to how or when meetings are held.
Generally, if there is no such clause in the governing document and you decide to hold meetings over the phone or using digital solutions, we will understand but you should record this decision and that you have done this to demonstrate good governance of your charity.
In the specific cases of members’ meetings (not trustee / director meetings) of Charitable Incorporated Organisations or charitable companies, held between 26 March 2020 and 30 December 2020:
- they may be held by phone / video or other electronic means, even if the governing document requires them to be held physically face-to-face
- members still have the right to vote, but the charity can require this to be done electronically, or by other means (such as by post)
- members will not have the right to attend a meeting in person or participate in meetings other than to vote
If you rely on these provisions, you must ensure that this decision is recorded in the minutes and that all other meeting requirements are met. You should ensure that you have a robust system to ensure only those eligible to vote can do so and that you record who has voted and the percentages of votes cast.
There may be various reasons for disposing of your charity land. You may, for example, want to relocate the charity to more appropriate premises or release some cash that you can apply to other projects.
Before you start, you and the other trustees must be sure that:
- you have permission to sell or lease the property – either in your governing document or in the law
- there is nothing in your governing document that prevents you selling or leasing the property
- your charity actually owns the title to the property
- the sale or lease is in the charity’s best interests
- if the property is designated for a particular purpose, such as a recreation ground, that the sale or lease doesn’t go against this
It’s usually straightforward to sell or lease charity land and property – most charities don’t need Charity Commission approval. You must try to get the best deal for your charity and follow any rules in the law and your governing document.
More detailed information can be found here
For free property advice, guidance and workshops visit the Ethical Property Foundation
All organisations have a goal which they want to ultimately achieve, but to have any sense of achievement, along the way your organisation needs to assess its progress in manageable chunks called objectives.
Fundamental to any plan is the need to set clear objectives or targets for the organisation against which future service delivery and progress can be monitored.
These objectives should be SMART:
Specific – the situation required should be clearly and precisely
Measurable – standards should be set against which progress can be
Agreed – all Management Committee members, staff and volunteers
should agree to, and be fully committed to, these
Realistic – objectives must be realistic i.e. achievable but not too easy
or too challenging
Time-bound – the organisation must specify a time for completion
The following objectives are clear, precise and measurable:
“We will relocate our services to Derby by moving to suitable premises costing no more than £2,500 p.a. and we will complete the move in six months’ time”
“We will increase the number of Service Users by 15% during the next year”
If you need further help with this, please contact us here
About corporate structures
Some charity structures are corporate bodies. If you choose a structure that forms a corporate body, the law considers your charity to be a person in the same way as an individual.
This gives your charity the legal capacity to do many things in its own name that a person can do, such as:
- employing paid staff
- delivering charitable services under contractual agreements
- entering into commercial contracts in its own name
- owning freehold or leasehold land or other property
If a charity structure is a corporate body, generally its trustees aren’t personally liable for what it does.
If your charity isn’t a corporate body (‘unincorporated’):
- the trustees are personally liable for what it does
- it won’t be able to enter into contracts or control some investments in its own name
- two or more trustees, a corporate custodian trustee or the charities’ land holding service will have to ‘hold’ any land on your charity’s behalf
More information can be found here
The Charity Commission has updated its 15 questions checklist which is a great tool to check you’ve got the basics covered, identify priorities for the coming year, and review your charity’s overall financial effectiveness.
Robust financial management is vital so charities can protect themselves against financial difficulties or abuse, and meet the needs of their beneficiaries.
There’s no better time than the start of the new financial year to assess your charity’s financial situation and financial controls, to see how you can improve them. Doing this is key to making sure that your trustees are able to protect the charity’s assets and resources.
The Charity Commission has recently updated their Charity finances: trustee essentials (CC25) guidance to help trustees and charity staff get to grips with the basic areas of financial management. It also links to more detailed guidance on a number of areas.
There are 6 steps to setting up a charity.
- Find trustees for your charity – you usually need at least 3.
- Make sure the charity has ‘charitable purposes for the public benefit’.
- Choose a name for your charity.
- Choose a structure for your charity.
- Create a ‘governing document’.
- Register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).
More information can be found here
The Charitable Incorporated Organisation – CIO – is a relatively new form of incorporated legal structure that is designed to meet the particular needs of a charity and is only available to charities. A CIO is a corporate body which is not a company incorporated under the Companies Acts; it is therefore not subject to company regulation. Neither its existence nor any charges it creates have to be registered at Companies House.
The corporate structure provided by the CIO meets a demand from the charitable sector for a structure which gives a charity a legal personality of its own, enabling it to conduct business in its own name, rather than in the names of its trustees.
More information can be found on the Government website: https://www.gov.uk/guidance/charity-types-how-to-choose-a-structure
We are often asked the question ‘How do we find trustees?’
Well, there is no need to struggle – just go to this website and you could have all your questions answered.
TrusteeWorks introduces voluntary organisations to talented trustees with the right blend of skills and experience for free.
The matching service is now absolutely free to organisations under £1M turnover
The website also gives you valuable guidance on preparing and information pack for prospective new trustees.