Advice to trustees
31 July 2019
The roles and responsibilities of a trustee and the benefit of having trustee liability insurance.
A trustee’s responsibility is to manage the governance of the organisation, using its charitable funds and assets wisely. As a trustee for your church, you can make a real difference to the way its run and the good it can do.
Responsibilities of a trustee
Trustees ensure the organisations property, funds, assets and reputation are protected. They must take care when investing or borrowing money, ultimately making sure it delivers on its charitable objectives.
Trustees can also be found liable for their actions. Some examples of errors made by trustees include:
- a breach of authority
- an omission by an individual trustee
- a form of neglect
- a misleading, libellous or slanderous statement issued by the board of trustees
- bad behaviour or misconduct by employees or volunteers.
Registration with the Charity Commission
Charities with an income of more than £100,000
Many churches incorrectly believe that, because they are a church or a place of worship, they do not need to be registered with the Charity Commission (in England and Wales), the Office of the Scottish Charity Regulator (OSCR) in Scotland. But if your church has an income of more than £100,00, you will need to be registered.
As a registered or excepted charity there are certain things that churches are required to do including preparing accounts and reporting on your work – copies of these and annual returns need to be lodged with the Charity Commission for registered charities only. Your status as a registered charity should also be included on your letterheads and financial documents.
Failure to submit annual documents for registered charities to the Commission is a criminal offence and can often be associated with wider mismanagement and poor governance, including the misapplication or abuse of charitable funds.
Not being registered means that your church risk losing out on some or all of the charity tax reliefs that they are used to receiving.
Charities with an income of less than £100,000
Some charities are ‘excepted’ which means they do not need to register or submit annual returns to the Charity Commission.
If you are an ‘excepted’ charity with an income of less than £100,000 you don’t need to register at the current time. ‘Excepted’ charities qualify for tax reliefs in the same way as registered charities.
Top 10 tips for church trustees
- The board should consist of trustees with a variety of different backgrounds, personal skills and experience to ensure a balanced approach.
- A clear direction about the church or charity’s purpose, missions and values will inform all aspects of the work you do.
- Agreed structures, policies and procedures will help to achieve missions and objectives efficiently.
- Trustees should act with integrity and in accordance with the church’s values and mission.
- Budgets and resources should be planned and managed effectively to achieve full potential from any activities or events.
- Take special care when investing the funds of the church or borrowing funds for the church to use.
- Effective communications and clear allocation individual responsibilities enables empowerment and accountability.
- Changes should be managed appropriately and with consideration to who and what might be affected.
- Seek professional advice on all matters where there may be material risk to the church, or where the trustees may be in breach of their duties.
- Avoid undertaking activities that might place the church's endowment, funds, assets or reputation at undue risk.
Further sources for trustees
There is a dedicated section on the Methodist Church website with a whole range of guidance documents for churches including: the role of a trustee, managing money and an example of a trustee annual report and trustee annual return.