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Can I receive a wage if I step down as trustee?

Finance

Helen Lacey ceo at North Wales Horse Watch Posted 2 years ago

Hello i am the founder, trustee and ceo of a small charity. 
I deliver workshops as a facilitator for the charity to organised groups and would like to start receiving a wage.
If  step down as a trustee will i still be able to receive payment for my services?
Many thanks
H
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Simon Hickman

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Hi Helen
From a governance perspective it will be easier to you to receive payment if you step down from being a Trustee.

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Michael McKillop

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Simon Hickman   legally not that easy

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Short version: depends on your charity's constitution. 
 
Generally you can't be an employee and a trustee. So you would need to step down from the Board.
 
More generally you'd need accept that you no longer "own" the charity, and that whoever is on the Board may take it in a different direction - indeed, maybe even employing someone other than you at some point. This can be difficult for founders to handle. 
 
If the constitution allows, it may be possible to remain on the board and receive payment for services, as a contractor not an employee. You'd have to have a robust conflict of interest procedure in place. 
 
But really...too many hats. You need to let go of the strategic direction and be an employee, or keep control of it, find someone else to get paid, and find some other job for your bread and butter. 
 
Good luck. 

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Andrew Studd

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at 2 years ago

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Edward HibbertI  agree with this analysis but watch out you can still get caught by the rules even if you step down. The rules dictate you should not receive a benefit as a result of your trusteeship so any involvement at all about the role prior to resigning and you could be disqualified. There is guidance on the CC website on this point - see Trustee expenses and payments - GOV.UK (www.gov.uk) section 6

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I put together a suite of form on this issue years ago (dont k how if they are still there). Generallyr it's about your motivation and continuing control. If you still insist on say on strategic decisions then you drag the whole trustee body down with you through vicarious responsibility should you be wrong

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Jon Benjamin

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You MUST step down as a trustee if you take on a paid position. You should not have been receiving payment as a trustee if that is what has been happening.
As others have noted, trustees can receive a payment in certain situations, but this would be for a one off or very occasional service, and not a regular salary. Even then the other trustees would have to make the decision and you would have to be the best person for the job and charging a fair market price. The same would be true if you cease being a trustee and are then employed. The process would have to be managed fairly and transparently by the remaining trustees in the best interests of the charity.

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Jon Benjamin   Generally yes, but you need Court permission to be paid as a trustee...it can happen

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Michael McKillop   yes, there are less common exceptions and a court or the Commission can allow schemes that permit payment, but I was trying to give a more general view.

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Jonathan Grosskopf

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Freelance Chartered Accountant specialising in helping charities at as above 2 years ago

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The Charities Act 2022 appears to allow a trustee to sell/give a service to a charity under certain circumstances. At present I do not think that that section has come into force.

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Jonathan Grosskopf   no it came in 1993

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Jonathan Grosskopf    You don't need Charity Commission's authorisation. That is the change when it comes into effect.

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Technically, yes. However, your current role as a trustee may not be used for personal benefit, and that would include appointing yourself to a paid role. Therefore, the remaining trustees would need to reach (and potentially demonstrate how they reached) an impartial decision that you were the best person for any paid position. They may also need permission from the Charity Commission.
 
I thought the CC had specific guidance on this, but I can't seem to locate it right now. In the meantime, I suggest reviewing the following: 
  • https://www.gov.uk/government/publications/conflicts-of-interest-a-guide-for-charity-trustees-cc29
  • https://www.gov.uk/guidance/payments-to-charity-trustees-what-the-rules-are
 

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Ian McLintock

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Trustees can be paid for delivering services and staff can be paid as employees, but you need to manage the conflict of interest and to seek Commission approval, unless the amount is very small. 

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Michael McKillop

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Ian McLintock   Last time I worked it was a £2500 one of transaction or a £1000 a year collectively for the trustees in total.

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Michael McKillop   I'm not aware that's changed, so looks good to me. 

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