David Porter has started a series of monthly information to all those involved in charities. Here is June 2015's edition.                                                                     

CHARITY CHAT

Edition 3

The aim of Charity Chat is to make Trustees, Directors, Governors and Committee Members aware of their obligations and the processes that have to be followed to run the Charity correctly. The references I make are to the Charities Act 2011 (the Act) unless stated to the contrary. If there are matters they wish to raise please let me know.

Who is responsible for running the Charity?

Section 177 states …..“charity trustee means the person having the general control and management of the administration of the Charity”. Who this is will depend on the size of the Charity. In very small charities the trustees will be the people who formed the Charity and who deal with its day to day affairs.

As the Charity gets bigger, the Trustees, Directors, Governors and Committee Members (the Trustees), who are appointed from time to time to manage the Charity, will have the general control and management of the administration of the Charity. Trustees are expected to bring their own particular expertise to that general management. If a CEO and staff are appointed, they will be tasked with the running of the Charity, but the responsibility for all that goes on still lies with Trustees. The responsibility cannot lie with the CEO and staff, as they are paid and the Trustees cannot be paid.

Appointment of Trustees

The Charity Commission publication ‘Trustee Board: People and Skills’, available from its web site, explains in considerable detail what needs to be done in order to appoint Trustees. Clearly the Trustees need to be interested in the Objects of the Charity. To that end, they will have to be supplied with a copy of the governing document and the last set of accounts. The Charity will need to make sure that the constitution and the accounts are understood. It would make sense, every now and again, to spend a little time, at a meeting, to re-iterate what the Charity is about.

The Trustees need to be careful about who is appointed. Often one trustee asks a friend and in smaller charities nobody usually objects. In a larger Charity it is necessary for the proposed new Trustee to meet with a sub-committee of the Trustees and for his or her application to be considered in detail.

Removal of Trustees

Once appointed it is not very easy to remove a Trustee. The fact that a Trustee may be difficult at meetings would not be a ground to remove him or her unless the Charity is being brought into disrepute or the behaviour is totally unacceptable. In fact, it is very useful to have a Trustee, who does raise objections, as many Trustees are reluctant to do so.

Before looking to remove a Trustee, you need to consider your constitution. Most Trusts, Memorandum and Articles and Declarations of Trust, require the Trustee who wishes to retire, to apply in writing. The fact that he or she might have agreed to leave the charity as a result of a meeting or telephone call would not suffice if he or she then refused to put this in writing.

If the Charity is a company limited by guarantee, section 168 of the Companies Act 2006 requires that a special notice (21 days) is to be served on the recalcitrant Trustee requiring him or her to attend an Ordinary Meeting at which the decision is to be made by the majority attending. Otherwise, an application can be made to the Charity Commission under section 80. Neither of these remedies should be pursued except in the most exceptional of cases.