Can a parish council who are custodian trustee's to a charity take over their running of a charity

Question

The parish council gave false information to the chairman of the charity resulting the whole of the charity management committee to resign

Answer 1

Depends what the constitution says, if they are custodian trustees they don’t have any involvement apart from holding the deeds.  Sounds like the charity may need to appoint new trustees.

Answer 2

Charity law and management is a very specialised field but I concur that the Trust deed forming the charity is the first place to look.  Custodian Trustees have no involvement in the management of a charity and the Charity Commission don't like parish councils being the management trustee although many are as a result of historical actions.  A Parish Council, whether custodian trustee or not, can't just "take over" a charity.  The Trust Deed would need to be amended and the consent of the Charity Commission would be needed.  A job for a specialist, I'd say.

Comments

We have just gone through a similar experience and its times like this that you realise that the Charity Commission have little resource to deal with what they see as minor squabbles.  Most constitutions provides for a minimum number of trustees usually 3  so the whole lot cannot resign . LTN 28 provides some guidance

Answer 3

The custodian trustee has no power to involve themselves with the running of the charity.
Does the PC have the power to appoint trustees?

The whole charity management team cannot just resign.  They remain accountable for the charity until the commission has put something else in place (as noted in various CC guidance).   They need to contact the CC and inform them of the situation and the commission will advise them (and or try to make alternative arrangements).  They will also need to get independent financial advice (around £240 hour).  To all resign and leave the charity trustee free is a breach of trust on their part (as is the provision of false information by the custodian trustee - the council).

Resigning due to the actions of the custodian trustee seems a pointless move, and plays straight into the hands of the Chair of the Parish Council?

Comments

The Charity Guidance - It's your decision: Charity Trustees and Decision Making (CC27), is probably the best place to start when considering if the trustees have taken a good decision in resigning over the issue (rather than submitting a complaint to the council, or a code of conduct against the chair, getting legal advice as to an appropriate course of action, or informing the public of their concerns etc etc.