A trust is a legal relationship which imposes, in some circumstances, the requirement that a ‘trustee’ hold the ‘trust property’ for the beneficiaries or in the case of a charitable trust for use in furtherance of the purpose.
A charitable trust is usually created by a trust deed for a specified charitable purpose. There are a number of elements it must have to be charitable and to be eligible for registration as a charity under commonwealth and state laws to attract relevant tax and other concessions.
Some trusts are income tax exempt and have DGR status and also have concessions under State government law.
With the introduction of the ACNC, there has been a suggestion that compliance by trustees with relevant regulatory requirements is poor.
- Do your trustees understand the Trust’s Act, their duties at common law and under the ACNC legislation?
- Does your trust have individual trustees – has it considered whether a corporate trustee may be more appropriate, both from a liability perspective and succession
- Is the board of the Foundation as effective as it could be – does it have rules which require the directors to self-evaluate and for there to be a healthy turnover after fixed terms and independence in the process of recruitment and selection?
- Has the trust expanded its services to include activity which is not charitable – is it at risk of non – compliance with the law?
- Does the board need some assistance to resolve issues created by the tensions or dynamics of human relationships
- How long is it since you reviewed the trust deed and other governance documents to ensure they are relevant, up to date and comply with the law, for eg does it talk about delegated responsibility?
- Would your organisation benefit from induction processes for the board, a board charter
- Could conflicts of interest be managed better ?
- How long is it since the board updated on the law relating to charities including fiduciary duties, competition and consumer law, fund-raising, private benefit restrictions
- Has the trust recently considered it ATO concessions and endorsements – is it correctly claiming – for example is it a fund or an institution?
- Does your Foundation have all of the governance documents it needs to comply with the ACNC legislation
Lesleigh has extensive knowledge and experience working with charitable trusts and Foundations to facilitate the identification of issues and to help the organisation develop strategies, relationships, frameworks, processes and documents to resolve those issues.
