Charities

What is a Charity?

The Charities Act 2006 gives the definition of a charity as a body set up under the law of England and Wales, established for exclusively charitable purposes and for the public benefit.

 

The Charities Act 2006 sets out the following descriptions of charitable purposes:

  • the prevention or relief of poverty;
  • the advancement of education;
  • the advancement of religion;
  • the advancement of health or the saving of lives;
  • the advancement of citizenship or community development;
  • the advancement of the arts, culture, heritage or science;
  • the advancement of amateur sport;
  • the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
  • the advancement of environmental protection or improvement;
  • the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;
  • the advancement of animal welfare;
  • the promotion of the efficiency of the armed forces of the Crown or of the police, fire and rescue services or ambulance services;
  • other purposes currently recognised as charitable and any new charitable purposes which are similar to another charitable purpose.

Who are Charity Trustees?:

  • Charity trustees are the people who form the governing body of a charity.
  • They may be known as trustees, directors, board members, governors or committee members.
  • Trustees are responsible for controlling the management and administration of a charity.
  • The great majority of trustees serve as volunteers, and receive no payment (other than to repay necessary out-of-pocket expenses incurred).
  • Trustees should work together as a team, and have collective responsibility for their charity.

Governance

A charity may be a trust, an unincorporated association, a company formed under the Companies Act or by Royal Charter. If a company, there will be additional legal responsibilities as a director under the Companies Act.

The charity's governing document may be the Memorandum and Articles of Association of a company, the Charter, the constitution, the declaration of trust or simply the rules. The governing document sets out the objectives of the charity and the method of appointment and powers of the trustees and regulates the conduct of the charity in general terms. The trustees should be familiar with the terms of the governing document and ensure that the charity does not move away from those terms without due consideration. The document should be reviewed regularly to ensure that its provisions continue to be practicable and appropriate.

Whatever their title, individuals responsible for controlling the management of the charity under its governing document are charity trustees and as such have duties and responsibilities in law and can be held personally liable to make good any loss to the charity caused by their failure to meet their obligations.