Trustee essentials

The Charity Commission recently updated its Charity finances: trustee essentials (CC25) guidance to ensure that trustees understand their basic financial responsibilities.


  1. Making the most of your finances


Financial management

Trustees should take time to review plans in place for achieving the charity’s aims and objectives to ensure that there are adequate finances to support these and also make plans should the charity cease to be able to function effectively and need to wind up.


There should also be an understanding of restrictions in place over funding and what these entail.


Identifying and managing risk

It is essential that charities regularly assess and review the risks faced in all areas and plan for the management of risks identified. A risk management policy should be established alonw with a disaster recovery plan.


Sound internal financial controls

It is the duty of all trustees to safeguard the assets and resources of the charity and to ensure that they are only used to further the charity’s aims. As such, trustees should be considering controls over areas of high risk and communication of delegation to members of staff or volunteers to ensure that they are aware of their responsibilities.


Charity reserves

With regards to the charity reserves, trustees must consider the need for the charity to keep reserves and as such the appropriate level to be held to ensure future development and sustainability of activities.


Managing financial difficulties and insolvency

This area aims to help trustees understand the action required when financial difficulty is faced. The trustees should ensure that they have appropriate skills within the board to ensure that the charity is run properly and can lead the charity through difficult times.


  1. Income generation


Financial investment

This section provides guidance on appropriate methods of investment of charity funds to generate income. Trustees must consider their duty of care when investing surplus funds and ensure that they are acting in the best interests of the charity and reduce exposure to investment risks where possible. Consideration should be made for the appropriateness of the investments chosen in light of the charitable objectives.


Charities and fundraising

When undertaking fundraising activities, trustees must ensure that the charity is compliant with fundraising law and follows good practice. It is essential that trustees consider the impact of chosen fundraising methods on public opinion of the charity itself.


The trustees are legally responsible for all fundraising activities of the charity but they may delegate this to members of staff or external fundraising bodies. In these instances trustees should ensure that they have access to the right information and advice.



Charities and trading

Dependent on the planned trading activities, they may need to be carried out in a trading subsidiary rather than through the charity itself in order to minimise risk to charity assets and ensure that they are organised in a tax efficient way. Trustees should therefore seek advice before commencing trading activities and consider whether proposed activities will further the aims of the charity. There should also be an assessment of the risks involved.


  1. Using other resources


Staff and volunteers

It is essential that charities as employers are aware of their legal obligations and have effective staff and volunteer management policies in place. Legal employment obligations should be understood and professional advice taken where necessary.


Charities and insurance

As part of the duty to safeguard the charity’s assets and resources, insurance should be purchased as necessary. Trustees must consider the appropriate level of cover for all insurances, be aware of any specific insurance requirements in the governing document, identify any risks requiring cover and ensure that volunteers are covered by insurance.


Buying and selling land

Where the charity holds land, this should be safeguarded. Trustees must take appropriate professional advice for all land transactions, comply with the law when disposing of land and confirm whether disposals or other land transactions need the consent of the Charity Commission.


Trustee expenses and payments

Unless the governing document stipulates otherwise, charity trustees usually act in a voluntary capacity. The Charity Act does set out some circumstances where the charity can pay its trustees for the provision of goods and services.


The full guidance can be found at:


If you would like to discuss the above blog in more detail, or you would like to speak with a member of our team, please contact Sarah Ollerton or call 01772 821021 to be put in contact with a member of our Charity team.

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