You’ve asked, so we’re answering!
Every week we get questions come through our Members Governance Support Line; below are the top 12 most popular that we hear.
A lot of people also use Google to research and ask questions, so we’ve done the leg-work for you. After some of our own research, we’ve included the top 6 questions, with OUR answers, according to Google Trends, below our own list.
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Give us a call or drop us an email if you have a question that’s not covered.
Trust Advice Members Questions:
1. Can we use a restricted fund for something else if the project we raised the money for has been completed?
No, you generally can’t use a restricted fund for something else without the explicit permission of the donors or funders who placed restrictions. It’s crucial to maintain transparency and comply with donor intentions.
2. If our charity needs to close, are the trustees liable for the bounce back loan we took out?
In most cases, trustees are not personally liable for charity debts. You should follow legal procedures and seek professional advice when closing the charity to ensure the loan is dealt with appropriately.
3. Can trustees also be employed by the charity?
In most cases, trustees cannot also be an employee, unless their governing document specifically allows it. This usually also applies to people connected to trustees, such as family members.
4. If we move from an unincorporated trust to a CIO, can we keep the same bank account?
Usually, you won’t be able to keep the same bank account when changing the structure of your charity, however it’s worth contacting your bank to discuss any upcoming changes. In our experience, some banks will allow you to keep the same account.
5. Do we have to appoint a Data Protection Officer because of the GDPR regulations?
You may need to appoint a Data Protection Officer if your charity’s data processing activities are extensive or involve special categories of data. Check GDPR guidelines for specific criteria. The ICO website is an excellent resource.
6. We are a church and one of our projects is a food bank. Should the food bank have the same policies as the church?
Not necessarily. Your policy documents should align with your charity’s unique needs and activities. However, they should still comply with relevant regulations and best practices.
7. How do I sign in to the Charity Commission; have things changed?
From 31 July 2023, you need a new personal Charity Commission Account to access online services. There are different steps for setting up your account depending on your role. Check their website for guidance.
8. Do we need to have our accounts independently examined?
Maybe! Charities with a turnover below £25,000 can usually prepare their own accounts and do not need an examination. Charities over that need Independent Examination and properly prepared accounts. Our friends at iel.org.uk can help with both, so get in touch. If you have income over £1m, you’ll need a full audit.
9. We are concerned about the future and want to keep a larger reserve fund than we typically do. Is that ok?
It’s generally acceptable for trustees to decide on the reserve policy. However, you should ensure reserves are used for charitable purposes and avoid excessive accumulation.
10. Are we allowed to recruit staff on the basis of a particular religious belief?
Recruitment based on religious belief may be allowed in certain circumstances, especially if the role is specific to the religious mission of the charity. A faith-based occupational requirement is a reasonable assertion, for example, in a church. However, be cautious about potential discrimination issues.
11. The trustees are finding it hard to get a date to meet; how often do we have to have a board meeting?
The frequency of board meetings should be outlined in your charity’s governing document or Operational Policy. If it’s not specified, it is good practice to hold regular meetings, typically at least quarterly.
12. Is it okay for one of the trustees to have a car that the charity pays the maintenance and insurance for, as they use it a lot for charity work?
Yes, it can be acceptable to provide a trustee with a car for charity work, but this should be transparent, and expenses should be reasonable and in line with charity policies.
Most Googled Questions:
1. What is the Charity Governance Code?
The Charity Governance Code is a framework of principles and recommendations for good governance in charities. It is not compulsory, but it is widely regarded as the gold standard for charity governance in the UK. The Code covers a wide range of topics, including the role of trustees, board structure and meetings, financial management, and risk management.
2. What are the duties and responsibilities of charity trustees?
Charity trustees have a number of legal duties and responsibilities, which are set out in the Charities Act 2011. These duties include:
- Duty to act in the best interests of the charity: Trustees must always act in the best interests of the charity, and not in their own interests or the interests of any other person or organization.
- Duty to act with reasonable care and skill: Trustees must act with the same degree of care and skill that a reasonably prudent person would exercise in the same circumstances.
- Duty to manage the charity’s resources responsibly: Trustees must manage the charity’s resources responsibly, which includes ensuring that the charity’s money is spent wisely and that its assets are protected.
- Duty to comply with the charity’s governing document and the law: Trustees must comply with the charity’s governing document (such as its constitution or trust deed) and with the law.
- Duty to report on the charity’s activities: Trustees must report on the charity’s activities to the Charity Commission and to the charity’s members or supporters.
In addition to these legal duties, charity trustees also have a number of other responsibilities, such as:
- Setting the charity’s vision and strategy: Trustees are responsible for setting the charity’s vision and strategy, and for ensuring that the charity is working towards achieving its goals.
- Overseeing the charity’s management: Trustees are responsible for overseeing the management of the charity, and for ensuring that the charity is well-run and efficient.
- Protecting the charity’s assets: Trustees are responsible for protecting the charity’s assets from fraud and other risks.
- Engaging with stakeholders: Trustees are responsible for engaging with the charity’s stakeholders, such as its members, supporters, beneficiaries, and staff.
3. How do I become a charity trustee?
If you are interested in becoming a trustee, but you don’t know where to start, there are a few things you can do:
- Contact your local charity support organisation. Many charity support organisations can help you to find trustee vacancies and to learn more about the role of a trustee.
- Search for trustee vacancies online. There are a number of websites that list trustee vacancies, such as the Charity Job Board and the TrusteeHub website.
- Network with other people who are involved in the charity sector. Talk to your friends, family, and colleagues to see if they know of any trustee vacancies.
4. How do I manage my charity's finances?
Managing a charity’s finances is an important responsibility, and it is important to do it in a way that is efficient, effective, and accountable. Here are some tips:
- Have a budget. A budget is a plan for how your charity will spend its money. It is important to have a budget in place so that you can track your spending and make sure that you are staying within your means.
- Keep accurate records. It is important to keep accurate records of all of your charity’s income and expenditure. This will help you to track your spending and make sure that you are accountable for your charity’s finances.
- Have a system of internal controls in place. Internal controls are procedures that are designed to protect your charity’s assets and to prevent fraud. It is important to have a system of internal controls in place to minimize the risk of financial irregularities.
- Invest your charity’s money wisely. If your charity has any surplus funds, you should invest them wisely to generate income for the charity. However, it is important to strike a balance between risk and return, and to make sure that you are not putting your charity’s assets at undue risk.
- Get professional advice. If you are unsure about any aspect of managing your charity’s finances, it is advisable to seek professional advice from an accountant or other financial advisor.
5. How do I manage risks in my charity?
To manage risks in your charity, you should:
- Identify the risks that your charity faces. This can be done by brainstorming with your trustees and staff, and by reviewing the Charity Commission’s guidance on risk management.
- Assess the likelihood and impact of each risk. This will help you to prioritise the risks and to decide which risks need to be managed most urgently.
- Develop and implement risk management plans. These plans should set out how you will mitigate the risks that you have identified.
- Monitor the risks and your risk management plans regularly. This will help you to ensure that your risk management plans are effective and that they are still relevant to the risks that your charity faces.
6. How do I find out more about UK charity governance?
There are a number of ways to find out more about UK charity governance. Here are a few suggestions:
- Visit the Charity Commission website. The Charity Commission is the regulator of charities in England and Wales.Their website has a wealth of information about charity governance, including guidance, templates, and case studies.
- Read books and articles about charity governance. There are a number of books and articles available on the subject of charity governance. You can find these at your local library or bookstore, or online.
- Attend training courses on charity governance. There are a number of organisations that offer training courses on charity governance. These courses can cover a range of topics, such as trustee roles and responsibilities, financial management, and risk management.
- Talk to other charity trustees. Networking with other charity trustees can be a great way to learn more about charity governance. You can meet other trustees at charity events, through online forums, or through your local charity support organisation.