“The willingness of those who run charities to give their time freely for the benefit of others and not for their own financial reward” is the reason given by the Charity Commission to the question – what makes Charities distinctive? So does the suggestion by Lord Hodgson in his 2012 Review of the Charities Act that “large” Charities (those with income over £1m)  should have the automatic power to pay trustees – do away with this fundamental voluntary principle?

It is a question which has provoked much debate across the third sector. Attending the recent ICAEW Charity and Voluntary Sector Group Annual Conference I heard the question raised once more. So why has this proved such a divisive issue? What is it we fear from paid Trustees?

Paying Trustees is in fact nothing new, indeed as Sam Younger, Chief Executive of the Charity Commission, pointed out at that very conference; many Trustees receive payments, albeit with permission from the Charity Commission. The Commission’s guidance notes CC11 ‘Trustee expenses and payments’ – provides excellent advice on how this may be done, not only for reimbursed expenses but also payment for services provided and even payment for Trusteeship Duties. So if even the Charity regulator does not have a problem with payment for the provision of Trustee duties – who could object? A large body of opinion, if the legion of third sector forums is anything to go by!

Would Trustees still have the interests of the beneficiaries at heart if they were being paid – would they not have greater allegiance to those that pay them? This somewhat cynical view does not necessarily follow. If a CEO of a Charity were to be a paid Trustee, for example, would he or she be any less driven to act for the good of the beneficiaries? I think not. In fact it seems to me to make perfect sense that the person who is trusted to run the charity from an operational and very often from a strategic standpoint is also part of the Board that has the legal responsibility for those decisions.

This would also have the effect of reducing “them and us” situations between a Board and the management, providing for better and more effective buy in on decisions.

A recent poll reported in ‘Third Sector’ found that 67% of the sample was opposed to Lord Hodgson’s proposal. From my reading online this seems an accurate split. But I am shocked at the vehemence of the argument against paying Trustees. Lord Hodgson does not advocate the compulsory payment of all Charity Trustees, in his own estimate; it would affect about 3% of Charities. Even here it is only the power to automatically pay Trustees that is being recommended not the obligation.

In my work at Goodman Jones, I come across many talented and dedicated Trustees who provide valuable voluntary support for their chosen Charity; should they be disadvantaged in comparison to those who work in the Commercial sector, purely because of a historical legacy?

Do we really value something we get for nothing?

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Julian Flitter - Partner

E: jflitter@goodmanjones.com

T +44 (0)20 7874 8834

I help charity trustees and chief executives to develop strategies, make sense of their finances and ensure that they can concentrate on delivering the objectives of the charity rather than getting stuck in day to day operational issues.

Working with commercial organisations as well as charities has proved invaluable in assisting Social Entrepreneurs within a range of Social Enterprises from Companies Limited by Guarantee to Community Interest Companies.

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