Charity’s Closure Demonstrates Importance Of Trustee Responsibilities

Advice ‘A Necessity’ For Organisations And Trustees

16.06.2014

Legal experts who specialise in providing organisations and trustees with guidance on keys issues related to trust administration have said the recent case of the former charity Aiding Children has put a spotlight on the need for all involved in such work to recognise their key responsibilities.

Aiding Children recently closed after being removed from the Charity Commission following an investigation which concluded that six per cent of the organisation’s income had been used for charitable purposes.

The Charity Commission found that trustees claimed donations of £3,500 had been made to Children In Need and Plan International, although no meeting minutes could clarify the decision and only a £1,480 donation to the latter could be confirmed.

In addition, the operational compliance report into the charity concluded that the charity’s activities amounted to a “betrayal” of its “privileged status”.

Irwin Mitchell’s specialist Will, Trust and Estate Disputes team said the developments were an important reminder to trusts and those responsible for their operations of the important responsibilities they hold in such a position.

Expert Opinion
A case of this nature serves to demonstrate the significant position of trust that trustees find themselves placed in.

"However, we have seen through our work several instances where people have taken on such roles without insurance or a proper understanding of the risk and liability related to such work.

"Considering their position, there is undoubtedly a high level of pressure on trustees and this level of accountability is emphasised by the fact there has been an increase in the number of claims we have seen on the issue.

"We would urge organisations and anyone given trustee status to consider very carefully whether they understand the very serious implications that such operations entail. Seeking legal advice should be an absolute priority to ensure that compliance is met and that, where possible, any potential risk of problems further down the line can be mitigated."
Paula Myers, Partner