Paid Trustees – have times moved on?

charity trustee and governance

There is a massive shortage of financial expertise on boards of charities.  This particularly affects smaller charities and can be a real hindrance to the operation of the charity.  Given the Charity Commission is now placing higher demands on trustees with the new Charities Act coming into force in 2016 and increasing calls for trustees to ensure good governance and build reserves’ resilience, the role of trustee is no longer something that can be done a leisurely pace in one’s spare time.

Trustees are facing greater demands on their time and there is a higher level of regulation to be faced that there was even five years ago.  So is it still fair to expect trustees to carry out their roles “pro bono”?

The trustees of bigger charities can appoint executives and delegate accordingly.  Trustees of smaller charities may not have enough funds to afford them this luxury and these charities often rely on the goodwill of the trustees.

The common argument against having paid trustees is that it may affect the decision making process as the paid trustees are no longer completely independent.  I would argue that more harm is done to a charity by not having the right people in place.  It is currently possible to have paid trustees but this involves a lengthy discussion with the Charity Commission and their express permission is required.

A further issue is that of which trustees are paid and which are not.  This will potentially create divisions within the trustee board and the organisation will not function well with some people receiving payment and others not.  The smaller charity will not have the funds to pay everyone on the board of trustees – so another tricky problem.

I would further argue that if the Charity Commission are looking for higher standards of governance of charities, paid trustees are going to be the price to pay for this.  However, this in turn diverts funds away from charitable causes.  Is this the price worth paying for increased protection of charitable funds?