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Dealing with the Charity Commission

Responsibilities of Charity Trustees

The particular responsibilities and liabilities of charity trustees will depend, amongst other things, on the type of constitution adopted by the charity, the terms of the constitution and the activities being carried out by the charity.

The most important duty of a charity trustee is to act in the best interests of the charity at all times. A charity trustee must:

  • Act with integrity, avoiding any conflict of interest between the charity and a trustee's personal interest.
  • Act reasonably and prudently.
  • Use the charity's funds only for the purposes set out in the constitution.
  • Act within the powers of the constitution.
  • Safeguard the charity's assets.
  • Ensure that the charity complies with charity law and with the requirements of the Charity Commission as regulator.

There will also be administrative formalities to observe such as submitting annual returns and accounts to the Charity Commission and, in the case of charitable companies, to Companies House.

Where the charity is also a company or a Charitable Incorporated Organisation then the trustees will have the benefit of limited liability, i.e. any claims will be made against the charity and not the trustees personally, save in certain circumstances such as a breach of trust by the trustee or continuing to operate the charity whilst it is insolvent. For this reason larger charities often seek to "incorporate" so as to reduce the personal liability of their trustees.

Conversely the trustees of trusts and unincorporated associations may have unlimited personal liability in the event that the charity's assets are insufficient to meet any claim. It is sometimes possible to insure against this risk.

More advice on this matter can be found on the Charity Commission's website and from their publications in particular CC3 - The Essential Trustee.

Additional information