10 Key Questions Every Charitable Trustee Should Ask
To ensure you're doing the right thing ...
Everyone loves a charity, and there are quite a lot of them out there. But if you are a charitable trustee, how do you know that you are looking at the right things?
If you're a charitable trustee you have to be seen to be doing the right thing!
copyright: flynt / 123rf stock photo (licensee)
Here are the top ten questions to consider to see if you are doing the right things for your charity.
Firstly, a general point, charity trustees have several duties: to act in the interests of the charity and the charity's beneficiaries, to protect and safeguard the assets of their charity and to act with reasonable care.
"If you are a charitable trustee then you will be expected, and held to account, if you fail in these duties!"
Note that these questions give you pointers to the things you need to be aware of or focus on. The Charity Commission has lots of guidance notes if you need more details on how to be a good trustee and run a good charity, and they are not bad reads either.
Most importantly, charities look after other people's money and it is important to do the right things. It is also important to be seen to do the right thing:
How is the economy affecting your charity and should the charity stop doing stuff or start doing other stuff? What sources of funding are you looking at and how reliable are they? OK, so this is a really obvious question, but have you considered what you can do to look at your funding and also what you can do to lessen and even cut your costs?
Cash is king! How much money is in the account and what does the budget for the next year look like? Do you even prepare a budget? If not do one now! Can the charity meet its commitments and if not can you plan an orderly shut-down? Do you know what commitments your charity has?
Charities have to have policies on reserves. What is your policy and is it focussed on providing services for the beneficiaries. Also, how are those reserves invested and are you making the best use of your reserves? Leaving large amounts of money in the bank is simple and easy, but is it the right thing to do?
Do the people in your charity have the right skills? If not, who do you want to look to invite to join? Getting people to take on the responsibility of being a trustee can sometimes be tough. But you can get people to help without making them trustees.
Are the trustees an effective body? Do you have sufficient oversight and knowledge of what the charity is actually doing? Do you need additional trustees to bring skills onto the board? If you have a manager who does the day-to-day doing, are you properly reviewing what they are doing? This mainly applies to smaller and medium sized charities, where you often have a really committed and enthusiastic person who does a lot of the doing. As a trustee, you need to be careful to delegate and not to abandon your responsibilities.
Does the charity have adequate safeguards to prevent fraud? Do you have financial controls and procedures over your money and data as well as controls and procedures over personal data? Fraud is a hot topic, but in its simplest form, do the trustees authorise expenditure and check income? Do you make sure data is kept safe? Do you have strict password controls on computers? Is your charity even registered with the data protection commissioner?
Are you making the most of Gift Aid? There are several ways to help you to maximise the value you get from Gift Aid, but are you doing the basics properly?
If you have a trading activity, have you thought about organising this through a subsidiary trading company in order to avoid tax liabilities? This isn't appropriate to very small charities, but is certainly relevant to lots of charities. If you don't have a trading activity, then maybe you should?
Are you making the best use of the charity's staff and volunteers? Have you asked them what skills they have that would be useful? Have you asked them how else they would like to get involved?
Can you collaborate with other charities to benefit both of you? Can you share resources like offices or equipment? What about sharing staff or even merging with another charity? Everyone likes to be a bit independent, but sharing resources and even events can be a great way to do more with less.
Charities need to be looked at seriously and treated as a business, even though the output of what you do is charitable. If you aren't taking it seriously, and doing the right things, then how do you know that something isn't going wrong?
"Being a charitable trustee
shouldn't be onerous!"
Fulfilling your duties as a trustee should always be straightforward, but like everything else you need to research and check out and sometimes go on courses to make sure you know what you need to do.
Until next time ...
If you'd like to talk about your charity or look at ways to maximise your charities trading activities, then do call me on 0333 335 0422 as I'd love to talk to you and see how I can help you.
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.
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