Charitable Trusts – the Trustee – Not for Profit Resource

Understanding the Role

A charitable trust exists to advance one or more charitable purposes, not private benefit, and its trustees are those legally responsible for making that happen. If the trust is incorporated as a charitable trust board, the board becomes a legal entity, but the individuals on it still have governance duties very similar to company directors. If the trust is also a registered charity, trustees are also “officers” under the Charities Act which brings additional regulatory expectations.

At the most basic level, trustees must use the trust’s assets prudently and only for the purposes set out in its trust deed. They must also ensure the trust complies with wider law – including the Trusts Act 2019, the Charitable Trusts Act 1957, the Charities Act 2005 (if registered), and general obligations like tax, employment, and health and safety.

Legal duties and liabilities

The Trusts Act 2019 sets out a series of mandatory and default duties that apply to all trustees, including charitable trustees. Mandatory duties include: knowing and following the terms of the trust, acting honestly and in good faith, and exercising powers only for proper purposes. Default duties (which usually apply unless modified in the deed) include the duty of care, the duty to invest prudently, to avoid conflicts of interest, to act for no personal profit or reward unless authorised, and to act unanimously with co‑trustees.

Trustees who breach these duties can be held personally liable where the trust’s assets are insufficient, especially if they have been negligent, acted outside their powers, or allowed improper private benefit. For registered charities, DIA Charities Services also expects officers to be “fit and proper” – serious dishonesty, persistent non‑compliance or misuse of charitable funds can lead to removal from office and deregistration. Even after resigning, some responsibilities can linger where past decisions are challenged, so stepping down does not automatically erase past liability.

Practical expectations of trustees

Anyone agreeing to become a trustee should be willing and able to do more than simply lend their name. At a minimum, trustees should:

Read and fully understand the trust deed, including its charitable purposes, decision‑making rules and any special powers or restrictions.
Know and understand the legal requirements of being a trustee
Attend meetings regularly, come prepared, and actively question, monitor and review reports from staff or volunteers.
Help set strategy, approve budgets, monitor financial performance, and ensure annual financial statements and returns are prepared and filed on time.
Ensure that conflicts of interest are declared and managed properly, and that any related‑party transactions are transparent and clearly in the charity’s best interests.
Oversee key risks – for example safeguarding, health and safety, data protection, and reputational risks – and make sure appropriate policies and controls are in place.

Trustees should also expect an induction: good practice guidance from Charities Services and sector bodies recommends that new officers receive basic governance training, key documents (deed, recent accounts, strategic plan), and clarity around their role.

Choosing and appointing trustees

Those appointing trustees should treat the process as seriously as appointing directors to a company board. Some practical considerations include:

Skills and experience: Aim for a mix of governance, financial literacy, legal or risk awareness, and sector or community knowledge relevant to the trust’s purposes.
Time and commitment: Check that candidates genuinely have time for meetings, preparation, and occasional extra work during busy periods or crises.
Character and integrity: Given trustees’ fiduciary role, integrity, sound judgment and willingness to challenge constructively are critical; background checks may be appropriate.
Eligibility and conflicts: Confirm that potential trustees are not disqualified (for example due to certain criminal convictions or insolvency) and that any significant or potential conflicts of interest can be managed.

Before appointment, it is good practice to provide candidates with the trust deed, a summary of legal duties, recent financial statements, and any key policies (for example a conflicts policy and trustee code of conduct). Written consent to act should be obtained, and changes in trustees must be notified to the Companies Office (for incorporated boards) and Charities Services for registered charities.

When you should think twice

Not every invitation to become a trustee should be accepted. Warning signs include: lack of clear charitable purpose, a vague or out‑of‑date trust deed, poor financial records, a dominant individual unwilling to share information, or trustees being asked to “rubber stamp” decisions rather than govern. If concerns arise, it may be wise to seek independent legal or governance advice before accepting, or to propose conditions (such as updated rules, better reporting, or training) as part of your appointment.

For both prospective trustees and those appointing them, the central question is whether the person can help the trust meet its charitable purposes while complying with its legal and ethical obligations. If the answer is yes – and both sides go in with a clear understanding of duties, expectations and support – trusteeship can be a rewarding way to contribute to the community while upholding high standards of governance.

Sources:

Charitable Trusts – the Trustee

Published by NFP Editor on 22 December 202522 December 2025

Understanding the Role

Legal duties and liabilities

Practical expectations of trustees

Choosing and appointing trustees

When you should think twice

“Donor-Controlled” Charities

Bank Accounts for Non-Profit Organisations

Members’ Meetings – Members’ rights

Charitable Trusts – the Trustee

Published by NFP Editor on 22 December 202522 December 2025

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