Charity trustee responsibilities: legal support for local authorities
As a local authority, what would you do if you discovered that your new neighbourhood amenity was built on land that doesn’t belong to you?
We’ve recently seen a significant increase in local authorities discovering that land, buildings, and other assets they have managed for years as their own were actually entrusted to them for charitable purposes.
Many local authorities are currently facing a challenging combination of funding cuts, staffing shortages, and increased workloads. As a result, they may have unintentionally overlooked the administrative duties that come with being a charity trustee.
This is further complicated by trust deeds that may date back several decades or even centuries, making them difficult to access. In a letter to local authority CEOs, the new Chief Executive of the Charity Commission addressed this matter and emphasised the expectation for local authorities to be compliant with their duties when operating as a charity trustee.
How we can help
At Browne Jacobson, we understand that the overlap between public and charity law is complex and requires specialist advice. Our legal advice helps government organisations modernise. This makes us well-suited to assist local authorities. We help them understand their trustee duties, explore their options, and fix past mistakes.
Our team can assist with the following:
- Upskilling: Providing training to your team on what it means to hold property in trust and what the duties of the local authority as a charity trustee are.
- Inventory: Helping you take stock of the charities your authority is a trustee of and summarising key data regarding each charity. We can assist with digital storage and organisation of all relevant documents in a central repository. We will also liaise with the Charity Commission to request copies of any missing documents lodged with the Commission.
- Report: Sharing our findings following the completion of the inventory for each charity, our assessment of compliance with governing documents and charity law, and our recommendations on how to achieve compliance. Our report will also include options for streamlining the authority’s charitable holdings.
- Strategy: Advising on available options for exercising trusteeships or rationalising them, while balancing donors’ wishes, community needs, and charity law principles.
- Implementing Change: Assisting with implementing a revised strategy and addressing any compliance issues identified for specific charities.
For more information or to schedule a free initial consultation, please contact Peter Ware, Nathalie Jacoby-Danesh, or Vicki Hair. During the consultation, we will assess whether your local authority is at risk of non-compliance with charity law and discuss potential solutions to prevent or resolve any issues.
"This is a well established team with in-depth knowledge of the local government sector, complete with all of its quirks."
Frequently asked questions
Trustees are responsible for important decisions about how a charity is run, ensuring it follows the law, and uses its resources properly. They help guide the charity towards its goals, maintain financial stability, and keep it true to its mission. While usually volunteers, trustees have legal duties to act in the charity’s best interests.
‘Charity trustee: what’s involved (CC3a)’ guidance details 6 steps to make sure trustees comply with the legal obligations:
- Ensure your charity is carrying out its purposes for the public benefit: Trustees must make sure the charity operates according to its intended mission and that all activities serve to benefit the public as outlined in the charity's governing document.
- Comply with your charity’s governing document and the law: Trustees must follow the rules set out in the charity’s governing document and comply with relevant laws, including submitting required reports to the Charity Commission.
- Act in your charity’s best interests: Trustees must make decisions that support the charity’s mission, considering both short- and long-term outcomes, and avoid personal conflicts of interest.
- Manage your charity’s resources responsibly: Trustees are responsible for ensuring the charity’s assets are used appropriately, managing risks, and preventing financial misuse.
- Act with reasonable care and skill: Trustees must use their skills and knowledge to make well-informed decisions, seeking professional advice when necessary.
- Ensure your charity is accountable: Trustees must ensure the charity meets legal accounting and reporting requirements, operates effectively, and remains accountable to its members and staff, especially when delegating tasks or decisions.
The risks of being a charity trustee include personal liability for legal breaches, mismanagement, or failing to comply with charity law. Trustees could be held responsible for financial mismanagement, not following the charity’s governing document, or not fulfilling their duties properly.
Trustees have a duty to act impartially and ensure that no beneficiary is unfairly disadvantaged over another. They must balance competing interests, especially when it comes to distributing income and capital, making sure that all beneficiaries are treated fairly in line with the trust's objectives.
Our people
Peter Ware
Partner
Nathalie Jacoby-Danesh
Partner
Vicki Hair
Associate
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