Trustees’ Legal Duties: Charitable Purposes for the Public Benefit
Understanding your charity’s purpose and that all charities operate for public benefit is essential to the role of trusteeship.
Yet, the legal meaning behind a charity’s operation is often left as a forgotten statement on the Charity Commission’s Register of Charities, a historic paragraph in a charity’s governing document or sometimes the charitable objects clause just seems to be “close enough” to a charity’s day to day operation.
Sometimes, trustees haven’t looked at the charitable objects statement for years and an ever-evolving innovative charity can inadvertently face difficulties where the trustees have acted outside the charitable objects.
Reminding oneself about the meaning of public benefit can be a useful tool for all trustees. The public benefit element sets the charity sector apart from the commercial profit-making world. Benefitting the public sector rather than a few private individuals is what drives the charity sector. Individuals who make a positive difference as trustees or volunteers and funders (whether private or organisational) who fund charitable organisations allow for the provision of services which otherwise would not be available to the public on the same scale (if at all).
What stops public benefit being achieved? Founder’s syndrome, failure for trustees to understand their legal duties, failure to manage conflicts of interest and poor decision-making practices.
What are some best practices to achieve this duty?
Understanding Conflicts of Interest
Conflicts of Interest often trip up charity trustees and the main reason being that trustees are not fully aware of the definition of a “connected person”.
Positive Decision-Making Practices
Ensuring all the trustees are aware of the charity’s objects would be a great starting point but some practical advice is to bring a statement of the charity’s objects to the trustee’s meeting particularly where big decisions are being taken. The trustees can assess whether a decision would be within the charity’s purposes.
Be wary of Founders’ Syndrome
A diverse board with appropriate skills could help. Founders of Charities must remember that no one “owns” a charity. It is set up to benefit the public and its beneficiaries.
Announcement
We are very excited to announce Trustees’ Week also marks the launch of HEY Charity, a new podcast dedicated to spotlighting local charity leaders and providing legal insights for the not-for-profit sector.
In partnership with the HEY Smile Foundation, this podcast will delve into the Voluntary and Community sector, featuring interviews with visionary charity leaders who are making a significant impact in their communities.
The first episode features an interview with Smile’s Chair, Trish Dalby, discussing the vital role of trustees.
"HEY Charity" will be available on all major podcast platforms, including Spotify, Sound Cloud, Mix Cloud, YouTube, and Apple Podcasts.
