Tougher regulation for charity trustees

The Charity Commission’s new legal powers were introduced in the Charities (Protection and Social Investment) Act 2016.

They include the power to issue an ‘official warning’ to charities and/or trustees, the ability to disqualify a person from serving as a charity trustee or senior manager of a charity and the power to direct that charity property is used in a certain way.

A recent report published by the Charity Commission confirms that these expanded legal powers have been used on 137 occasions since the implementation of the act, demonstrating its tougher approach to regulation.

For example, the Commission has recently issued an official warning to a trustee of Expectations (UK) due to a breach of trust and legal duties. The Head of Regulatory Compliance emphasised: “Charity trustees should at all times consider the needs of their beneficiaries and be driven by their charitable purpose and mission in everything they do”.

It is now more important than ever that trustees comply with their legal duties, including:

• ensuring the charity is carrying out its purposes for the public benefit;
• complying with the charity’s governing document and the law;
• acting in the best interests of the charity;
• managing the charity’s resources responsibly;
• acting with reasonable care and skill; and
• ensuring the charity is accountable.

The Charity Commission’s guidance, ‘The essential trustee’, explains what trustees should be doing to comply with these legal duties, such as taking advice when needed, asking challenging questions about information at trustee meetings and avoiding conflicts of interest or conflicts of duty.

Charlotte specialises in advising charity and not-for-profit clients on various commercial property matters, as well as other charity law matters, such as helping charities comply with their regulatory requirements. For advice on trustees’ legal duties and related issues, please get in touch.

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