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Can You Be Disqualified From Running A Charity?

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Essentially, a charity is a company limited by guarantee rather than limited by shares. Therefore, in the same way that company directors can be disqualified for improperly managing a company, those running a charity can be disqualified by the Charity Commission.

The Charity Commission has set rules that automatically disqualify those in a position of power within the charity; this includes trustees and senior managers of the charity. If you fall under these rules, you cannot take a senior role within a charity unless the Charity Commission has granted you a waiver.

What are the legal disqualifying reasons?

The rules are roughly broken down into three different sections. These are specific unspent offences, non-financial offences and financial reasons. 

Specific unspent offences

There are four specific unspent offences that can lead to you being disqualified from running a charity:

  • Unspent financial offences, including: dishonesty or deception, terrorism offences, money laundering offences, and bribery offences.
  • Unspent offences for contravening a Charity Commission order.
  • Unspent offences for misconduct in public office or perverting the course of justice.
  • Unspent offences for aiding and abetting the above.

Non-financial offences

There are six non-financial offences which can lead to disqualification from running a charity:

  • Being on the sex offenders register (even if the offence is spent)
  • Unspent sanctions for contempt of Court
  • Disobeying a Charity Commission Order
  • Being a designated person (under anti-terrorist legislation)
  • Being a person who has been removed from a relevant office
  • Being a disqualified company director

Financial reasons

There is a single financial reason why a person can be disqualified from running a charity: if the person has gone through the insolvency process.

What happens if you’re disqualified?

If you’re disqualified for any of the reasons listed above, you must not take a position of power with a charity unless you have a waiver in place.

If the Charity Commission becomes aware of you acting in a position of power within a charity, they have the following powers:

  • They will advise you to stop acting in your position immediately.
  • They will bring the matter to the attention of the trustees of the charity you are involved in.
  • You can be ordered to repay expenses, benefits, remuneration, or the value of benefits in kind received from the charity you received during the time you were disqualified.
  • They can also refer the matter to the police.

What is a waiver?

In simple terms, a waiver brings a disqualification to an end. Most people who are disqualified can apply for a waiver, and the Charity Commission considers each case on its own merits.

The waiver will only be granted if it’s in the best interest of the charity (or charities) covered in the application. Part of this best interest is the charity's reputation and whether the waiver will damage the public’s trust in the charity.

Any decision made about the waiver by the Charity Commission can be appealed.

One thing to keep in mind is that you can be disqualified again if another disqualification reason applies to you.

Who gets the final say?

Ultimately, it’s down to the charity whether you can be in a position of power. You need to check the charity’s governing documents and whether they allow a person with your type of disqualification to be in a position of power.

For example, if the governing documents state that a person who is an undischarged bankrupt cannot be a trustee, then a waiver cannot override it.

For more information about automatic disqualification and how to apply for a waiver, check out the full guidance from the Charity Commission on GOV.UK.

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