When there is no advantage: where there is an unfavourable financial comparison with an outside supplier, and no weight of special expertise or knowledge that would tip the scales, the charity should use the supplier who is not a trustee. This disclosure must also include the total amount of expenses paid, the nature of those expenses and the number of trustees who were paid expenses or had expenses paid on their behalf. Not every trustee will always be able to give their time freely, and the commission accepts that in some cases, particularly where loss of earnings will cause hardship, an element of financial compensation might be justified. In some cases, payment will be made on a continuous basis whenever these duties are carried out; or it may take the form of a periodic or annual allowance; or it may be made on an occasional basis, intended to reflect only a certain aspect of the trustee role, or to enable a trustee to attend a specific meeting or event. Payments of up to $55.00 for a trustee and $75.00 for the chair to attend a board meeting are defined as “expenditure incurred in the production of the payment” and are exempt from withholding tax. The concept of unpaid trusteeship has been one of the defining characteristics of the charitable sector, contributing greatly to public confidence in charities. This means they should be satisfied that the service is required by the charity. This list explains some of them: applicable SORP is the term used to describe the SORP to be used by the charity to prepare its accounts on an accruals basis which is in effect for the financial year for which the accounts are being prepared. The commission can also require the charity to withhold further payment. Where a charitable company does not have any members, or enough members who are not trustees to form a quorum to consider an amendment to remove a prohibition, the commission’s consent will be needed. Expenses must be necessary for the operation of the plan. The short answer. For greater transparency, the commission recommends any withdrawals from relevant meetings by the trustee-employee are clearly minuted. There is a general expectation that charity assets should be used directly for the purposes of the charity. This means they need to include: any trustees connected to persons or businesses receiving payment, any trustees who are receiving payment for serving as trustees, trustees who are also paid employees of the charity, trustees receiving any other form of trustee benefit. This also includes any decision on whether it is in the charity’s interests to continue with the post. Where a power in a charity’s governing document is: more restrictive than the statutory power, for example, if it only allows payment for professional services, the charity can use the statutory power, provided there is no prohibition against payment for other services in the charity’s governing document, less restrictive than the statutory power, the charity can rely on its own power. If it is proving difficult to recruit new trustees without payment, the board should normally provide evidence that it has made a serious attempt to recruit trustees on an unpaid basis. 2.2. The power to do this, and the conditions attached to using it, were introduced by the Charities Act 2006 as a change to the Charities Act 1993 (now replaced by the Charities Act 2011). Expenses are refunds of legitimate payments which a Trustee or Local Governor has had to meet personally in order to carry out his or her duties to the Trust or Local Governing Board. but a form of wording that says ‘All trustees must act gratuitously’ would also be a prohibition, scheme: a legal document made by the commission or the court which either sets out all the rules for running a charity (and is therefore its governing document), or which amends the powers of a charity (thereby forming part of its governing document), trustee: a charity trustee; charity trustees are the people who are responsible for the general control and management of the administration of the charity. Need for openness: trustee boards should be aware of the possible need for authority, and ensure no improper influence has been brought to bear in the charity’s decision to employ a firm or individual. If trustee boards are in doubt about the need for authority, the Commission recommends they take advice from their own legal advisers. In urging charities to seek greater diversity on their trustee boards, the commission recognises the advantages of recruiting and retaining trustees who have a particular knowledge of the communities and areas in which their charity operates. • Seek professional advice when in doubt. whether the functions to be carried out are genuinely those of a trustee - as distinct from functions of an employee or a consultant; has the charity made the right balance between its executive and non-executive functions? Identification with a particular cause or purpose, a sense of serving the community, or the opportunity for personal development, can all attract people to trusteeship. They are generally always permitted as an expense of the charity and therefore do not need an express authority Otherwise, no approval is needed – though any potential conflict of interest still needs to be managed. In contrast, payment for trusteeship means that a trustee receives payment from a charity for carrying out his or her normal trustee duties. Many charities already have a specific power to do this in their governing documents. Not in all cases, but there can be distinct advantages in having one. Advantage to the charity: the circumstances in which a trustee board may wish to consider this type of payment are where a potential or existing trustee: brings particular skills or perspective which are valuable to the charity, cannot afford to serve as a trustee because his or her employer does not pay for time spent on charity business during working hours, is self-employed, and would lose out financially by carrying out trustee duties in normal business hours. The same is true for other expenses: If your medical expenses qualify for a deduction, you can write off current ones as well as back bills your trustee pays off. It is also a condition that, before entering into this type of agreement, trustees must ‘have regard to’ the commission’s guidance on the subject. Trustee boards should note that the commission cannot authorise any payments retrospectively, but can only authorise new or continuing payments. We’ll send you a link to a feedback form. The trustee board should ensure any potential conflict of interest is declared and recorded in its minutes, and that the trustee concerned does not take any part in the board’s discussions and decisions concerning the terms and conditions of the connected person’s employment.