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PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.
Although it clashes with the principle of giving one’s time voluntarily, the demands and responsibilities put on some trustees of charities are such that paying them will be a necessity in order to obtain people with the requisite levels of experience and expertise. This was the claim of Lord Hodgson in a recent public speech at a Charity Commission function.
Trustees are entitled to be repaid their out-of-pocket expenses for dealing with the affairs of the charity. However, a trustee who is paid by their charity has to contend with both ethical and legal problems.
Where a person is to be paid for supplying services as a trustee or for supplying goods to their charity, the legal position is as follows:
- The maximum amount of the payment must be agreed in writing between the trustee and the charity;
- The payment must be reasonable for the service or goods supplied;
- The trustees must have decided before making the agreement that it is in the best interests of the charity for the services or goods to be supplied by the trustee;
- The payment must only be received by a minority of trustees where more than one trustee is involved in the paid-for service; and
- The charity’s constitution or regulations should not prohibit such a payment.
In some circumstances, the permission of the Charity Commission may be necessary where a charity wishes to pay a trustee a sum other than by way of reimbursement of expenses.
If you are a charity trustee and require advice on your legal rights and responsibilities, contact us.