TRUSTEE PAYMENT - NEW POWER FOR CHARITIES TO PAY FOR SERVICES PROVIDED BY A TRUSTEE

Charity Commission February 2008

Provided certain conditions are met, the new power allows trustees of all types of charity to receive payment for providing any professional or business services or supplies to the charity over and above the normal trustee duties.

Some charities already have a power in their governing documents or other rules which allow them to make payments in these circumstances.  But where a charity has no such power, it will be able to use the new power without any need for the Commission's approval.

The new power can be used if the following conditions are met:

·      there must be a written agreement between the charity and the trustee or connected person concerned; a note in the charity's records will not be enough - there must be a proper agreement;

·     the trustees must be satisfied that payment is no more than is reasonable for the service provided, and that paying one of their number is in the best interests of the charity;

·      in order to help the charity manage any conflict of interest, a trustee who received payment may not take part in decisions of the trustees about the agreement, and should withdraw from meetings in which the terms of the agreement are discussed.

As a further safeguard for the charity, it cannot be used if the number of trustees who are being paid for any reason from the charity's funds will then be half or more than half of the trustee board.