Charities Governance

Charitable purpose has a specific meaning in charity law. The Charities Act 2009 sets out four categories of charitable purpose: Prevention or relief of poverty or economic hardship, advancement of education,  advancement of religion and any other purpose that is of benefit to the community. A charity must promote at least one of these purposes and must provide public benefit. A charity’s governing document elaborates on the charitable purpose in the main object clause by describing; What outcomes the charity is set up to achieve, how it will achieve these outcomes, who will benefit from these outcomes and where the benefits will be felt. By law, charity trustees must ensure their charity promotes its charitable purpose only and that it is of public benefit.

Ethics are fundamental in the charity sector. Statements about ethos can undoubtedly play an important role, but it is when these values are lived out that they are at their most powerful. Charity trustees have the power to create an ethical culture and set a tone where agreed values are reflected in everything the charity does. The behaviour of individual charity trustees is very important; they must lead by example.

The most essential resource of any charity is its people. This means people should feel valued and have clarity around their own roles and the roles of others. Charity trustees are responsible for providing leadership to volunteers, employees and contractors. This includes taking their duty of care towards these people seriously and promoting a culture of respect.

All charities, no matter what their complexity, must abide by all legal and regulatory requirements that are relevant to the work they do. The charity trustees are responsible for making sure this happens. Charity trustees must understand that the governing document of a charity is a legally binding document in its own right. The trustees are also responsible for a charity’s funds and any property or other assets that it holds. As much as is possible, they must also consider and reduce risks to which their charity is exposed.

Running a charity well means you need capable charity trustees who work together as an effective team. Board meetings are especially important, as this is where charity trustees exercise their collective authority. It is also important that there is a good mix of skills, experience and background amongst charity trustees and that these are refreshed on an ongoing basis. It is vital that new charity trustees receive a proper induction to the charity.

Accountability for your charity does not just mean accounting for the money you have brought in and spent (although that is clearly very important). It involves being open and transparent about all charity matters. It is about being able to stand over what your charity does and how it does it and justify this to any person or group who queries what your charity has done or is doing. As an organisation set up to provide public benefit, this means you should be able to explain this to anyone who asks.