I’ve been a trustee and company director of several animal and educational charities over the last 25 years. You get involved as a trustee at first because you are passionate about the “cause” or perhaps invited because you have a skill set, or you are elected (as happened in two educational charities I was a trustee of).
It’s a lot of fun, you get to be part of a group of people deciding the big picture stuff, coming up with campaigns or pushing particular agendas. Even when you are arguing with your fellow trustees you, mostly, know that you all have the same broad objectives in mind.
This morning’s news about NMC brought what being a trustee is responsible for into sharp focus:
“The New Media Consortium (NMC) regrets to announce that because of apparent errors and omissions by its former Controller and Chief Financial Officer, the organization finds itself insolvent,” the group said in an email message sent to its members on Monday afternoon. “Consequently, NMC must cease operations immediately.”
NMC is a Non-Profit organisation in the US, similar to UK charity. It will have a board of trustees or directors in the same way as charities in England and Wales, and be governed by similar laws.
The UK Government actually lay out the responsibilities of a board of trustees – something I didn’t engage with until the first charity I was involved with started having “problems”. Whilst I can’t disclose what the problems were, they weren’t illegal or immoral – but there were procedural issues that gave me pause to think.
In short the key responsibilities of a trustee are;
- Doing what its supposed to
Making sure that the charity is carrying out the purposes for which it was set up (and you should be able to explain how all of the charity’s activities are intended to further or support its purposes). This also includes making sure that funds aren’t spent on the wrong purposes, some trustees may have to reimburse the charity personally if this occurs.
- Binding and Legal
Trustees need to ensure that the charity is compliant with its own with its governing documents; and that it is also compliant with all laws that apply to the charity (such as data protection, child protection etc). Remember you can be a trustee or hire an attorney from Fielding Law to make the final financial decisions or to help you with guidance.
- Manage your charity’s resources responsibly
This is one of my favorite sections of the Government’s advice. It means that trustees must ensure the charity’s assets are only used to support or carry out its purposes, that you budget correctly and not over-commit and that you don’t expose the charity’s assets to undue risk. The bit I like is that as a trustee you are also responsible for not exposing beneficiaries of the charity, or the reputation of the charity to undue risk.
Finally, as a trustee, you are responsible for the accountability of the charity. Use North Knoxville Bankruptcy Law Office to manage your finances and more. There are three key elements that, as trustee you need to be focused on;
- Firstly , and above all, the charity is operating legally, and you are also responsible for it being “well run and effective”;
- Secondly, where appropriate, be accountable to members;
- Finally, where things are delegated to staff or volunteers, there remains accountability.
Ignorantia juris non excusat
I have no idea what will happen regarding NMC, I didn’t particularly like all of their reports (we all remember the ‘digital Adobe literacy’ one, and Sheila’s post about it!) , but I think some were excellent, and those people I know who have been involved are by and large good people doing good things for the right reasons.
This morning’s news is obviously sad for all involved. But for me it is a reminder that being a trustee for any organisation comes with responsibility, and in some cases personal liability. I know a lot of people, and have served alongside some, who want to be a trustee because it builds their CV, or moves them in the right circles, or sometimes because it is a status thing.
The demise of NMC should be a reminder that being a trustee means taking on duties and responsibilities. As Martin Weller pointed out:
“As a trustee you can’t be an expert in all areas, such as accountancy, but you should be expecting to ask difficult questions.”
I wish all involved at NMC the very best at a difficult time.