Trustee Duties in Charities.
A charity trustee has ultimate responsibility for the affairs of a charity. Each trustee must ensure that the charity is solvent, well-run and delivers the charitable objects for which it has been set up, for the benefit of the public.
Being a charity trustee comes with responsibility.
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A charity trustee’s duties derive from a combination of:
the rules that apply to the particular type of legal structure of the charity depending upon whether the charity is a trust, a limited company, an unincorporated association or CIO – and includes duties in the Companies Act 2006 that apply to charity trustees who are directors of a charitable company; duties in the Charities Act 2011 and the CIO Regulations 2012 which apply to charity trustees of CIOs and duties under the Trustee Act 2000 which apply to the trustees of a charitable trust;
general legal obligations such as those under contract, tort or criminal law and may flow from the particular activities being carried on by the charity;
the fiduciary nature of charity trusteeship which apply to all charity trustees regardless of the legal structure so, for example, a trustee holding donations from members of the public are subject to their own specific trust, separate from the legal general charitable objects of the charity;
the general legal framework that applies to charities such as under the Charities Act 2011.
Examples of duties applicable to all charity trustees include:
a duty to act in the best interests of the charity and its beneficiaries;
a duty to promote the charitable purposes of the charity set out in its governing document;
a duty to operate the charity for the public benefit;
a duty not to profit from his position;
a duty to avoid a conflict of interest with the charity;
a duty to act in good faith;
a duty to act within the charity's objects and powers;
a duty of care or prudence to carry out their duties according to the standard of an ordinary prudent business person; and
a duty to act collectively so usually act by a majority, unless the governing document provides otherwise.
If charity trustees act in breach of duty they may become personally liable for making good any loss caused to the charity as a result. Charity trustees are collectively responsible for decisions that have been made by the trustees.
The above is not intended to be a full description of the duties of charity trustees.
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