Your board meets quarterly. Between meetings, dozens of financial decisions happen. Then someone asks: Should the board have signed off on that?

The line between proper delegation and governance failure isn’t always obvious. Your Finance Director processes a £15,000 invoice. Routine or board matter? Your Chief Executive agrees to a three-year software contract. Within their authority or not?

The Charity Commission updated its decision-making guidance, (CC27) in September 2024 but for many trustees, things are still a bit unclear. Let’s take a look at which financial decisions sit with the board, which can be delegated safely and how to document that split.

What Trustees Cannot Delegate by Law?

Some decisions cannot be pushed to staff, committees or individual trustees. The Commission’s essential trustee guidance, (CC3) establishes that trustees cannot delegate ultimate responsibility for the charity’s affairs. You can delegate tasks. You cannot delegate accountability.

CC27 sets out seven principles that apply to all trustee decisions:

• Act within your powers
• Act in good faith
• Manage conflicts
• Be sufficiently informed
• Consider relevant factors
• Ignore irrelevant ones
• Make decisions within the range a reasonable trustee body could make.

When you delegate, whoever receives authority must be able to meet these standards. That’s why some decisions simply cannot be delegated. Staff might lack the perspective to weigh strategic factors or the decision involves conflicts which only the full board can properly manage.

Reserves Policy: Why It Stays With the Board

Reserves policy involves strategic judgements about risk appetite, future plans, and how much to hold back versus spend now. The Commission’s guidance on reserves, (CC19) requires annual board review for good reason: your financial position and risk profile change.

Finance staff can prepare an analysis covering operating costs, income volatility, strategic plans requiring reserves and risks that reserves might mitigate. The board uses that analysis to set policy. Minutes should record not just the target level but the reasoning behind it.

Once set, the board monitors reserves through regular management accounts. If reserves fall significantly below target or rise well above it, the board decides what action to take.

For guidance on determining appropriate reserve levels for different charity sizes, see our detailed analysis.

Property Transactions: When Boards Get Involved

The Commission’s guidance on acquiring land, (CC33) doesn’t mandate board approval for every property decision but most warrant it, given the sums involved and long-term commitment.

Before buying property, the board needs an independent valuation, legal advice on condition and restrictions, and financial projections covering purchase and ongoing costs. The decision involves strategic judgement about whether ownership serves the charity better than leasing and what happens if the programme needs change.

Selling property requires board approval in virtually all circumstances. The board must satisfy itself that the charity obtains the best price reasonably obtainable. Property held as a permanent endowment or subject to certain restrictions needs Charity Commission consent before proceeding.

For leases, the threshold depends on significance. A small organisation taking its first office lease needs board involvement. A large charity renewing standard terms on existing premises might delegate that decision to staff within pre-approved parameters, provided the commitment doesn’t materially affect financial position.

Borrowing and Material Financial Commitments

Any loan agreement needs board approval. The commitment to repay debt, interest costs, and risk to financial stability require direct trustee involvement. The board needs projections showing the charity can service debt, an understanding of the security being offered and an analysis of alternatives.

Beyond formal borrowing, other commitments might need board approval based on materiality. A contract committing 20% of the annual budget generally warrants board approval, even if technically within a Chief Executive’s delegated authority.

Many boards use a simple rule: any commitment exceeding 10% of annual income automatically requires board approval, regardless of other delegation arrangements.

Investment Policy vs Investment Decisions

The Commission’s guidance on investing charity money, (CC14) allows boards to delegate day-to-day investment management to professionals. What stays with the board is establishing investment policy: approach, risk appetite, ethical considerations and restrictions on investment types.

Once policy is set, investment managers operate within those parameters. Significant changes to strategy or moving between asset classes outside the approved policy come back to the board. Understanding financial accountability in this context helps distinguish between policy-level decisions and operational implementation.

Grant-Making and Programme Funding

The board approves grant-making policy covering assessment criteria, due diligence requirements and approval thresholds. This policy then guides individual grant decisions.

Many grant-making charities use financial thresholds: grants below £10,000 get staff approval, £10,000 to £50,000 need grants committee approval, above £50,000 come to the full board. Specific thresholds depend on your size and grant-making volume.

A small foundation making 20 grants annually might bring everything to the board. A large grant-maker processing hundreds of applications needs more delegation.

For charities funding their own programmes rather than making grants, the board approves overall budget allocation between programmes annually. Day-to-day programme spending within approved budgets sits with staff, monitored through management accounts. Launching new programmes or ending existing ones needs board approval because these decisions affect the strategic direction.

Effective fund accounting helps boards track programme spending against budgets and identify variances requiring attention.

Executive Compensation and Trustee Payments

Setting your Chief Executive’s pay needs board approval or a remuneration committee of trustees. If your Chief Executive serves as a trustee, they cannot participate in this decision.

The board should receive benchmarking data from similar charities, consider the skills required, understand the labour market for those skills and balance this against what the charity can afford.

The Commission updated trustee payment guidance, (CC11) in 2025, introducing clearer provisions around when trustees can receive payment for services. Any such arrangement needs board approval, often with Commission consent. The full board approves this, with the affected trustee not participating.

This applies even when arrangements seem sensible. Your treasurer is a qualified accountant and you want to pay them for bookkeeping? Board decision with proper conflict management.

When Conflicts Trigger Board Involvement

According to the Commission’s guidance on conflicts of interest, (CC29) decisions involving conflicts need heightened scrutiny. This often means board involvement, even when the decision might otherwise fall within delegated authority.

A trustee’s business providing services to the charity. A trustee’s family member applying for employment. A trustee sitting on another charity that’s applying for a grant. These conflicts typically need board handling regardless of transaction value, because conflicts compromise the “acting in the charity’s best interests” principle.

The conflicted trustee declares their interest before discussion begins, leaves during deliberation, and doesn’t vote. For significant transactions, get alternative quotes to demonstrate value for money and seek independent advice on whether terms are reasonable. Minutes must record how the conflict was managed.

The board should maintain and annually review a register of trustee interests covering business interests, other trusteeships and family connections to staff or suppliers.

What Can Be Safely Delegated

Staff can approve expenditure within approved budgets and delegated authority limits. Supplier payments, payroll processing, routine costs don’t need board approval, provided they fall within the approved annual budget.

Moving money between budget lines can often be delegated to the Finance Director within certain limits. The board might require approval for virements above certain amounts or those affecting restricted funds.

Spending restricted funds according to their designated purpose operates within staff authority, provided expenditure aligns with the restriction and approved budgets.

For instance, let’s say a donor gave £10,000 for youth services. Your Youth Programme Manager can approve spending within that restriction without bringing each invoice to the board. The board monitors through regular reporting showing restricted fund balances and expenditure.

When to Seek Professional Advice

Property decisions need independent valuation, while investment decisions benefit from professional advice.

Be careful here. “Independent” means genuinely independent. A professional valuer with no connection to the charity or transaction, not your treasurer’s friend who’s an estate agent.

If unsure whether your governing document permits a decision, seek legal advice before proceeding. Confirming authority costs less than defending a decision that turns out to be ultra vires (beyond your powers).

Charity accountants understand sector-specific requirements around reserves calculations, fund accounting, and financial planning that mainstream accountants might miss. When facing complex financial decisions, selecting the right charity accounting firm means finding advisers who partner on strategic decisions rather than just handling compliance.

Getting the Balance Right

The distinction between board decisions and delegated decisions forms the foundation of effective charity governance. Certain financial decisions cannot be delegated: reserves policy, property transactions, borrowing, investment policy, grant-making frameworks, senior remuneration and conflict transactions.

These affect strategic direction, carry significant financial risk, or involve governance principles that individual staff members cannot properly assess.

Day-to-day financial operations, spending within approved budgets and implementing board-approved policies can be safely delegated provided you have clear frameworks and monitoring.

Yet, the board’s responsibility doesn’t end with delegation. You remain accountable. This means establishing clear authority limits, monitoring through regular management accounts and creating systems that flag unusual transactions.

The goal is clarity, so trustees, staff, and advisers all understand which decisions need board approval and which can be delegated.

At Charity Accounting Partners, we work with trustee boards to strengthen financial governance and clarify decision-making authority. From developing schemes of delegation to providing management accounts for effective oversight, we help trustees fulfill their duties with confidence.

Frequently Asked Questions

What expenditure threshold should trigger board approval?

A threshold representing 5-10% of annual income often works as a starting point. Below that level, delegation to senior staff within approved budgets operates effectively with strong monitoring.

Do trustees need to approve the annual budget?

Yes. The board must approve the annual budget, which sets the framework for delegated spending. Staff operate within that budget, with significant variances requiring board approval.