Trustees’ Dilemma

25 November 2019


The recent debate about military charity reserves set us thinking about charitable objectives and when to consider alternative options.

Trustees are required to comply with the Trust’s stated charitable objectives and these are invariably carefully formulated and specific. They never refer to mergers with other charities. In general terms and particularly among health charities, there are a huge number of small charitable trusts set up for very specific purposes. This is often with a view to addressing a disease which has afflicted a loved one of the founder and, as such, plays a useful role in helping with their grief and targets particular afflictions with great focus.  Hopefully, it allows specific research to be done on ways to combat the disease which otherwise may not be undertaken. However, with the passage of time, these very targeted funds often lose focus and find it hard to raise new money.  Furthermore, the amounts they can raise are often so small they probably make very little difference to the research effort.  Although well meaning, some funds may counterintuitively have a hindering effect because they target research in the wrong area, or divert attention from more promising areas of research.

There are mechanisms available to wind up or merge charities but these can be time consuming and expensive.  Trustees tend to operate with very specific mandates and it may not even occur to them that their efforts could best be served by merging with another charity.  This occurred to good effect a few years ago with the large cancer charities but is perhaps rarer than one would wish for among smaller charities.

It is suggested that as part of their regular strategic reviews, trustees should step away from their day to day responsibilities set out under the trust deed and consider whether there are other ways of fulfilling their charitable objectives including perhaps, even winding up or merging with another charity. 

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