Charity governance structures
Charitable organisations in Ireland can be structured in one of three ways. A charity can be set up either as a charitable trust, as a corporate body or as an unincorporated association.
Charity trustees are the people who control and are legally responsible for managing a charity. Charity trustees have specific duties set out by the Charities Act 2009.
The Charities Regulatory Authority (Charities Regulator) is the statutory body that monitors charities’ compliance with the Act.
Types of charity structure
A charitable trust is established under a deed of trust. This means that the trustees must use all of the trust’s property to advance the charity’s purpose (except for money used to manage the trust).
Charities are often established as companies. These are usually companies limited by guarantee and governed by a constitution (formerly known as a memorandum and articles of association). Companies are subject to company law and must comply with rules about keeping accounts and records. Company law is enforced by the Companies Registration Office and the Office of the Director of Corporate Enforcement.
Some smaller charitable organisations can be established as unincorporated associations governed by a constitution or set of rules. These organisations are like clubs and consist of people bound together by mutual agreement, who meet on a regular basis to pursue a common interest.
An unincorporated association is not a separate legal entity from its members, and it does not have limited liability or a legal personality of its own. This means that it cannot enter into contracts or own property.
The constitution is binding for members of the organisation, but it has no legal effect on non-members. Therefore, anything done by the organisation is done by all the members of the organisation, who are responsible for all the activities of the organisation. Individual members are personally liable for any of the organisation’s debts or obligations.
Charity trustees are the people who control and are legally responsible for the management of a charity. Charity trustees include:
- Trustees listed in the deed of trust of a charitable trust
- The directors and other officers of a company where the charity is a company. A trustee who is also the director of the company has additional duties under company law and common law in their capacity as a company director.
- Officers, or anyone acting officially in control of the organisation such as the board of management, in cases where the organisation is an unincorporated group
You cannot profit from your duties as a charity trustee. You cannot accept a salary or receive other benefits specifically for acting as a charity trustee. However, your charity can reimburse you for any reasonable expenses that arise from undertaking your duties as a trustee.
Duties of a trustee
Your duties as a charity trustee are set out in the governing document of your charity, legislation and common law (the body of Irish law based on established practice and decisions of the courts).
Your general duties as a trustee are to:
- Comply with your charity’s governing document
- Ensure that your charity is carrying out its charitable purposes for the public benefit
- Act in the best interests of your charity
- Manage the assets of your charity
- Make appropriate investment decisions
- Ensure that your charity is registered on the Charities Regulator’s Register of Charities
- Ensure that your charity keeps proper books of account (these must include daily entries of all money your charity receives and pays out, as well as a record of your charity’s assets and liabilities)
- Ensure that your charity prepares and gives its financial accounts to the Charities Regulator
- Ensure that your charity prepares and gives its annual report to the Charities Regulator
- Ensure that you comply with any statutory directions issued by the Charities Regulator
- Ensure that you inform the Charities Regulator if you think that a theft or fraud has taken place at the charity
Who cannot be a trustee?
You cannot be a trustee of a charitable organisation if you:
- Are bankrupt
- Enter into an insolvency arrangement under the Personal Insolvency Act 2012
- Are convicted of an offence
- Are sentenced to a term of imprisonment
- Are disqualified from acting as a director or auditor or from managing a company under the Companies Acts 2014 as amended
- Are disqualified from being a pension fund trustee under the Pensions Acts
- Have been removed from the position of a charity trustee by a High Court order under the Charities Act 2009
If the trustee is a legal entity such as a company, they cannot be a trustee if the company is being wound up.
If you cannot be a trustee because you fall into one of the categories above, you can apply to the High Court and ask to be allowed to work as a trustee of a particular charity or a particular class of charities. The High Court can make an order that allows you to be a trustee if it considers that this would be in the public interest and best interests of the charity concerned.
It is an offence to act as a trustee if you fall into one of the categories above and have not received an order from the High Court that allows you to work as a trustee.
If you are concerned about a charity or its activities, you can raise a concern with the Charities Regulator. The most common concerns are about financial mismanagement, that the organisation is not a real charity and governance concerns.
You can read more about charitable organisations in our document What is a charity?