In a recent speech, David Holdsworth (CEO of the Charity Commission for England and Wales) recently reiterated the Commission’s support for trustees in order to continue maximising the impact that charity has on society. He recognised that charity trustee recruitment remains challenging and against this backdrop, a vital issue for the Commission remains “making trusteeship an attractive prospect – both for current trustees, and for new recruits”.

This raises the age-old question; How?

For some, one solution to the challenge of recruitment is paying trustees for their service. Whilst the current legal position is that charity trustees are unpaid volunteers, there is no denying that the role of trusteeship is complex, demanding and time-consuming. In this article Bethan Walsh explores the key arguments advanced on both sides of the debate.

Attracting and Retaining Talent

Modern charities are complex organisations. Trustees are expected to understand governance, compliance, finance, safeguarding, fundraising regulation, and often, HR and digital strategy. One argument is that paying for trustees would widen the role’s appeal in general, thus attracting a more diverse and professional pool of candidates. This could include people who might not otherwise be able to afford to volunteer their time, such as younger people, working professionals, people with young families and those from underrepresented communities. In this regard, it is disappointing to note that there has been no meaningful increase in trustee diversity since 2017 and so trustees remain disproportionately white, male, retired and relatively wealthy.

But, according to the volunteer recruitment charity, Reach over half of trustees are still appointed after being asked by another trustee or otherwise nominated. So, in order to truly address the challenge of trustee recruitment, charities should start with meaningful advertising. Not only would this make charity trusteeship more accessible, it could also increase board diversity. It is a myth that volunteering is the barrier to diversity when it comes to trustee recruitment. Following analysis by Reach of the diversity of people who are applying for trustee roles through its advertising platform (around 9,299), these applicants were in fact very diverse across a range of characteristics including age, ethnicity, gender and sexuality.

Recognising the Burden

In the complex regulatory landscape within which charities operate, there is no denying that trustees shoulder significant legal and ethical responsibilities. When mistakes are made, trustees may be held personally accountable, with potential reputational and even financial consequences. Some argue it is unjust to expect such responsibility without fair financial reward.

However, it is important to point out that the Commission’s policy on Restitution and the Recovery of Charitable Funds Misappropriated or Lost to Charity in Breach of Trust states that, because most trustees are in fact volunteers and unremunerated for their work, they will not normally be held responsible for honest actions reasonably undertaken even if mistaken. Contrary to this, a higher bar exists for remunerated trustees. A trustee who has acted prudently and in good faith but has made an honest mistake, will not usually be held by the Charity Commission to be personally accountable to the charity.

What about preserving the spirit of charity?

Volunteering is the long-standing principle that remains at the heart of the charity sector. To many, volunteering reflects the selflessness and civic duty which form the foundations of our charities. Paying trustees risks turning this public service into a regular “day job”, which, rightly or wrongly, would likely undermine public trust and confidence in charity. This alone might be the sole argument against paying trustees for their service, given that charities rely on nearly £60 billon in public donations every year.

Financial Strain on Charities

Most charities operate on extremely tight budgets. In a world where raising sufficient funds is becoming increasingly difficult, paying trustees risks diverting vital funds from front-line services. Further, there will be some charities who simply cannot afford to pay their trustees and will be unable to compete with larger charities when it comes to trustee recruitment. Allowing charities to pay trustees risks creating significant conflict and greater inequity amongst charities of varying sizes.

A Middle Ground?

Trustees should feel confident that they can carry out voluntary duties without worrying that they will be out of pocket as a result. So, whilst we talk about preserving the Voluntary Principle, charity law does in fact already allow trustees to be paid in limited circumstances and with Charity Commission approval where required. For example, trustees can be paid for providing goods or services to a charity or they can be remunerated for loss of earnings.

Trustees are also legally entitled to have their reasonable expenses reimbursed by the charity. This can include childcare, travel costs and meals when acting on behalf of the charity. We can advise in detail on this and the circumstances in which trustee payments can be made.

The debate around paying trustees will likely continue, with rational points put forward for both sides. But the Commission’s view as the sector regulator is clear:

“Voluntary trusteeship is the lynchpin of the public’s trust in charity – and we must guard it fiercely.”

What is also clear is that public need for charity support is increasing, and the sector must continue to evolve in order to keep up with this demand. In the meantime, we must strive for charity leadership and governance that is robust, diverse and rooted in the public’s best interest.

If you have any questions regarding charity structures or any matters of Charity Law, contact Bethan Walsh our Head of Charities