Risks of becoming a trustee

[Whoopitywhoops]

I'm thinking of becoming a charity trustee as a local charity are looking for new trustee board members. It's a charity I'd love to help. However, I have heard that there's risks to being a trustee such as getting sued, criminal record etc if it's found there's issues with the financial aspects. Is that right? I have to be completely honest in that I'm not great with understanding money so although I would obviously be 100% honest with my own part in the trust I may not be capable of spotting inconsistencies in the 'books'. This worries me as I only want to do this role to be part of something good but I don't want to put myself at risk in doing so.

Can any experienced charity trustees advise on this? If it's relevant, the charity I'm considering is a very small charity local to me and they have only just become a charity. They've been running for years but only recently became a charity. It feels like a bit of an ad hoc charity but one that could develop and grow and I'd love to be part of it. However, as they're so small does that make it even riskier as they might not have the right support to not make financial errors? Perhaps I'm massively overthinking this?

There is government guidance on being a trustee that it worth looking at in terms of your responsibilities.

I am a charity trustee and spent my working life before I retired advising trustees of occupational pension schemes. Frankly if you have doubts, I would not do it. The responsibilities are heavy and you need to understand fully what's going on.

They should have articles of association that you can request (if they don't volunteer them) that will clearly set out the liabilities of the trustees - usually heavily limited.

If you're considering becoming a trustee is it because you want to support the charity generally, or because you have a specific skillset you're offering? Either is totally valid but have a chat with them about the mix of skills on the Board. It's not uncommon for a Board of Trustees to have specialists - someone from a finance background, someone from an HR background, someone from marketing/publicity background who will 'lead' on challenging any odd decisions the management team make in those areas.

I would only consider it for an established charity personally.

https://www.gov.uk/government/publications/the-essential-trustee-what-you-need-to-know-cc3/the-essential-trustee-what-you-need-to-know-what-you-need-to-do

Every single Scout Group in the country is run as a small charity with a board of trustees. I'm on one and it's fairly straightforward. Although we do get extra support and guidance from Scouts UK HQ. Not everyone who is a trustee is expected to be across the financials, it's mostly the job of the Treasurer to watch over them and explain in simpler terms to everyone else. We also have our accounts scrutinised by an external party. I also know that trustees who are volunteers are not held to quite the same standards as paid trustees. As long as you can prove that you acted in good faith in the best interests of the charity I think you are mostly fine.

I got some basic training before I accepted a trustee role. The local branch of the Council for Voluntary Service runs regular free training for new/prospective trustees, as well as ongoing training.

Google CVS + your local town/city/Local Authority name.

https://en.m.wikipedia.org/wiki/Council_for_Voluntary_Service

I'm a trustee for an established charity with about eight staff and 50 volunteers. It's in a 'difficult' area (not children or puppies) so raising the funds to keep our staff paid and the organisation in existence is not easy, and a big responsibility. The trustees each need to bring something useful to the table, whether it's financial acumen, legal knowledge, PR experience etc, or just being able to represent the volunteer perspective during meetings.

There's insurance available to cover the kind of concerns you have about the ultimate responsibility that trustees have (and yes, it is a bit scary initially).

I wouldn't say it's a thrilling role. Governance is quite dry, and a fair bit of it goes over my head. But others on the board cover that stuff, and I bring different skills and experience.

As a PP said read the constitution of the charity to see what the trustees are liable for. Also ask specifically if they have trustee indemnity insurance.

I’ve recently undertaken a free trustee training course. I’d recommend something like that to understand your full responsibilities. Trustee training

Make sure the charity you are looking at is a charitable company, an incorporated charity. You can find this out by looking up the charity's number on the charity commission site.

I would NOT consider being a trustee of an unincorporated charity - as this comes with massive personal risk. Such as if they charity is wound up through lack of funds creditor's can and do come after individual trustees to pay up.

If the charity is incorporated this then becomes a risk only if the charity is acting illegally. You would want to be able to show that you followed correct procedure such as your accounts were checked by someone with proper financial skills/qualifications - rather than needing to have those skills yourself etc.

A well run charity it is easy and rewarding to be a trustee - if a little time consuming. Start ups tend to be more time consuming and can have bigger issues as they try to do everything in-house without having the skills.

Seconding @LittleOwl153 on the incorporated bit.
If this is a new charity, and especially if it doesn't have full time paid staff, I would be more concerned.

Ours has a CEO and employs a finance officer, admin, funding expert etc. So the trustees are there for governance and to be experienced critical friends, not to actively do that work.

This has been really helpful. Thank you so much. I think I'll say no to this charity but may keep my ears open for similar with a more established (possibly bigger) charity. Thank you so much everyone.