Custodians of Trust Property and Funds

Trustees act as legal custodians of all the assets and funds of the trust. They hold and manage these resources for the benefit of the beneficiaries and the fulfillment of the trust’s objectives.

• Ensure all funds are used strictly for charitable or specified purposes
  
• Hold legal ownership of trust property in a fiduciary capacity
  
• Protect trust assets from misappropriation or personal claims
  
• Maintain bank accounts in the name of the trust with joint signatories
  
• Invest funds only as permitted under Section 11(5) of the Income Tax Act

Framing and Implementing Financial Policies

Trustees are responsible for setting internal financial policies and ensuring their execution. These policies guide budgeting, fund utilization, procurement, and accounting practices.

• Approve annual budgets and allocate funds to programs and operations
  
• Frame rules for procurement, payments, and staff compensation
  
• Set up approval limits for expenditure and fund disbursement
  
• Establish audit trails and proper documentation for all transactions
  
• Monitor compliance with regulatory financial norms and ethical standards

Ensuring Legal and Tax Compliance

Trustees must ensure that all financial activities comply with income tax laws and other applicable regulations. They are liable for any breach of compliance related to fund usage.

• File income tax returns, audit reports, and digital declarations timely
  
• Ensure application of at least 85 percent of income for charitable purposes
  
• Maintain separate books for general funds and restricted project funds
  
• Oversee FCRA compliance for foreign contributions where applicable
  
• Track and renew 12AB, 80G, and other tax exemption registrations

Monitoring and Approving Fund Utilization

Trustees have a key role in approving the actual use of funds for trust activities. They ensure that every financial decision aligns with the trust’s mission and serves public interest.

• Approve fund release for projects, purchases, and salaries
  
• Evaluate proposals and budgets before sanctioning disbursements
  
• Ensure funds are not used for personal or unrelated business purposes
  
• Review utilization certificates and progress reports of activities
  
• Prevent conflict of interest in awarding contracts or spending decisions

Overseeing Investment and Income Management

Trustees are responsible for prudent investment of surplus or corpus funds. Their decisions should ensure financial sustainability while complying with statutory norms.

• Invest corpus funds in fixed deposits, government bonds, or approved securities
  
• Avoid high-risk or speculative investments not permitted under trust law
  
• Reinvest earnings from investments for further charitable use
  
• Record all interest or dividend income and ensure its appropriate utilization
  
• Periodically review investment performance and reallocate as needed

Maintaining Transparency and Financial Reporting

Trustees must uphold transparency in all financial matters and maintain accurate records. They are accountable to donors, beneficiaries, and regulatory authorities.

• Approve and publish audited financial statements annually
  
• Maintain detailed ledgers, receipts, vouchers, and income-expense records
  
• Respond to donor queries and submit financial disclosures as required
  
• Ensure the trust’s financials are audited by a qualified Chartered Accountant
  
• Present financial reports to the board and include them in public records if applicable

Safeguarding Long-Term Financial Stability

Trustees must balance immediate program needs with long-term financial planning. They are responsible for maintaining reserves and ensuring the trust’s financial continuity.

• Plan fund mobilization strategies through grants, donations, or endowments
  
• Create reserves for future projects, contingencies, and sustainability
  
• Limit administrative expenses to ensure maximum program allocation
  
• Encourage diversified funding sources to reduce dependency
  
• Review and revise financial plans based on organizational growth and needs