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Guidance and good practice for Charity Trustees

Published: 04/04/2016
Updated: 04/04/2016

We have updated our guidance to reflect the practical experience of many Scottish charities.

The law and charity trustees duties have not changed.

What we are trying to do is set out in a more straightforward way what charity trustees must consider, so that they meet legal requirements, ensure that their charities are well-run, and avoid some of the common problems that can arise.

 

You can download a pdf version of the guidance here.

Download a large print version here (point 18 font). 

 

This guidance explains what the law says charity trustees must do or must not do. The charity trustee duties are set out in The Charities and Trustee Investment (Scotland) Act 2005 referred to in this Guidance as the 2005 Act.

In this guidance, we explore the general duties and specific duties of charity trustees in the 2005 Act. We give you examples of how these might work and share good practice from our experience as Regulator and from other organisations in the charity sector.

We, the Scottish Charity Regulator, are responsible for regulating Scottish charities and their charity trustees.

 
Charity Trustee Duties

Charities make a big difference in all aspects of our society. Achieving this requires the hard work and commitment of thousands of charity trustees who give their time and energy to Scotland’s charities.

Charity trustees are the people who have general control and management of the charity and are responsible for making sure that the charity works to achieve its charity’s purposes (the reasons the charity exists).

The role of a charity trustee is extremely important and can be very rewarding. It is important for both you and your charity, that you know what your responsibilities are, and understand what you are expected to do. This guidance will help you do this.

 

 


All charity trustees have legal duties and responsibilities under the 2005 Act. A duty is something that you must do, and all the duties must be met. These duties are separated out into general duties, that set out a broad framework that all charity trustees must work within, and specific duties detailed in the 2005 Act.

The general and specific duties apply equally to all charity trustees and to all charities registered in Scotland. All of the charity’s trustees should work together to make sure that these duties are met.

We, the Scottish Charity Regulator, work with charity trustees to make sure these duties are understood and complied with. We also have powers to take action where we have concerns about particular charities and their trustees. See our Inquiry Policy for more details.  

In this section we explain what the duties are, what the law says you must do and ways that you can meet the duties.

Charity trustee duties  - Being a charity in Scotland
 

Knowing what your governing document says and understanding what it means, having well run charity meetings and keeping good records of the meetings are all important factors in making sure that you are carrying out your general charity trustee duties set out in the 2005 Act.

As a charity trustee, you must put the interests of the charity before your own interests or those of any other person or organisation including those responsible for your appointment. Where you cannot do that, there may be a conflict of interest.

A conflict of interest exists when your duty to act in the interests of the charity conflicts with:

  • The interest of the person or organisation that appointed you as a charity trustee (an “appointment conflict”), or
  • Conflicts with your own personal or business interest in relation to that matter (a “personal conflict”).

Conflicts of interest can and do come up: it is how you manage them that is important.

In this section we explain how you as a charity trustee can prepare for potential conflicts of interest, what you could do if a conflict arises, and highlight common examples of conflicts of interest.

In this section, we explain the legal requirements and good practice for protecting your charity’s finances. The section splits into two areas of charity finance:

  1. Financial Records: Charities have specific duties under the 2005 Act to maintain financial records, prepare annual accounts and submit these accounts to us. It is the responsibility of all the charity trustees to make sure that these requirements are met.
  2. Financial Controls: The 2005 Act requires you, as charity trustees, to act with care and diligence when managing the affairs of the charity. This means that you must make sure you have suitable controls over financial procedures to protect the assets of the charity.  

The 2005 Act sets out when charity trustees (and people who are connected to them) can receive payment from the charity for services provided to it. A charity must not pay charity trustees, and people who are connected to them, unless the charity can satisfy the conditions set out in the 2005 Act.

This section explains what those conditions are and gives examples of when it is and is not appropriate to pay charity trustees and people connected with them.

The rules on paying charity trustees do not apply to reclaiming expenses, like train fares to get to a charity trustee meeting.

Making sure that people know you are a charity is one of the specific charity trustee duties set out in the 2005 Act. You must provide certain charity details in certain external documents (hard copy and electronic). What you need to tell people and how you need to do this are set out in specific Regulations (see Legal Note below). This section sums up what you need to do, and gives suggestions about how best to do it.  

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