The Duties of a Charity Trustee
In Scotland, being a charity trustee brings with it responsibilities.
A trustee has been defined as a “person[s] having the general control and management of the administration of a charity”, so therefore extends to all those in charge of charities however constituted and includes, for example:-
- For unincorporated charities and SCIOs, members of the executive or management committee;
- For limited company charities, the directors or members of the management committee.
All trustees have duties under the Charities and Trustee Investment (Scotland) Act 2005, and you need to know and fully understand your legal obligations. These duties are separated out into general duties and specific duties.
As a charity trustee there’s an overriding duty to act in the best interests of the charity. In particular this means that:-
- You must act in a manner consistent with the charity’s purpose.
Every charity registered in Scotland has to set out a charitable purpose in its governing document or constitution. This purpose must be consistent with the purposes listed in the 2005 Act and includes aims such as “the advancement of animal welfare” or “the prevention or relief of poverty”. All actions by trustees must be carried out with regard to the stated purpose or purposes.
- You must act with care and diligence.
A trustee must act with the care and diligence that’s reasonable to expect of a person who’s managing the affairs of another person i.e. a higher standard of care is expected for trustees. For example, when investing, this may mean that the law requires trustees to be able to show that they took more care than they would have done in managing their own investments. When investing the charity’s assets, a trustee must show that they took additional care, which may mean taking a more moderate level of risk than they would be prepared to take with their own investments.
- You must manage any conflicts of interest.
If there’s a potential conflict of interest between the charity and a person who appoints you as a trustee, you must put the interest of the charity before those of the person appointing you. Where a decision must be taken where one option would be in the interests of a trustee and another in that of the charity, a trustee should make sure the other trustees know of the conflict and shouldn’t take part in the discussion or decision. This also includes any personal conflict of interest where your own interests (or the interests of a connected person or organisation) are involved.
As a charity trustee you must also comply with the specific duties set out in the 2005 Act, which include:-
- Updating your charity’s details.
The Office of the Scottish Charity Register (OSCR), who is the independent regulator and registrar for Scottish charities, keep a register of charities. Trustees must ensure OCSR hold up to date information about their charity on the Register.
- Reporting to OSCR.
Trustees have a duty to provide certain information to OSCR. This includes:
- Annual Monitoring: every year trustees must send OCSR their charity’s Annual accounts, Trustees’ Annual Report, External Scrutiny Report and Online Annual Return.
- Charity Accounting: trustees must prepare charity accounts for OSCR and make sure they’re properly scrutinised.
- Making changes to your charity: trustees must seek consent and/or notify OSCR of changes to the charity. For example, a trustee must notify OSCR if the charity changes their principal contact or governing constitution and must seek prior consent for changes to their name and/or charitable objectives.
- Financial record keeping and recording.
Trustees have a duty to keep proper accounting records and prepare a statement of account, including a report on its activities, at the end of each financial year. The accounts need to be independently examined or audited, and then sent to OSCR no later than 9 months after the end of the charity’s financial year.
It is the trustees’ duty to manage how their charity fundraises.
- Providing information to the public.
Trustees need to ensure that their charity meets legal requirements when referring to their charitable status, for example when they’re advertising their charity on television or in magazines.
The general and specific duties apply equally to all charity trustees and to all charities registered in Scotland. All of the trustees should work together to make sure these duties are met.
If you don’t comply with your duties
If charity trustees fail to comply with their duties, this is misconduct. OSCR have powers to take action against charity trustees and their response will be proportionate depending on the situation.
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