What a charitable trust trustee does for a family giving vehicle

A charitable trust trustee is the person or company that holds the assets of a giving vehicle and decides, within the trust deed, which causes receive money and on what terms. For a family that wants its giving to outlast any single generation, the trustee is the part of the structure that makes generosity repeatable: requests are assessed against written criteria, payments are approved and recorded, and someone answers for the result.

This page looks only at the trustee's work. It does not compare countries or explain trusts from scratch; it follows what happens once a charitable trust exists and requests begin to arrive.

Why the trustee matters more in a giving vehicle

A family trust has beneficiaries who can ask questions, challenge a distribution and read the accounts. A charitable trust has purposes instead. No individual owns the outcome, so discipline has to come from somewhere else. In practice it comes from three places: the wording of the purposes in the trust deed, the people who watch the trustee, and the trustee's own working habits.

Where the trustee is a professional established in Switzerland, the law treats the activity as a regulated one. Under the Financial Institutions Act (FinIA, or LEFin in French), a person who professionally manages a separate pool of assets for a beneficiary or for a defined purpose, on the basis of a trust deed within the meaning of the Hague Convention, is a trustee (Article 17(2)). The same law says the trustee manages those assets, keeps their value intact and uses them in line with their purpose (Article 19(2)). For a charitable trust, "purpose" is the whole point, so this duty is the legal anchor for everything below.

Starting point: a grant request

The most useful way to understand the service is to follow a request. A hospital foundation, a school or a local association writes to the family asking for support. Without a trustee, that letter lands on a relative's desk and is answered on instinct. With a trustee, it enters a process.

Each stage leaves a document. That is the real product of the service: not only the grant, but a file that a successor trustee, a protector or a supervisory authority could read years later and understand why money moved.

What the service covers

Defining the charitable purposes

Many giving vehicles fail quietly because their purposes are either too narrow to use or too vague to apply. The trustee works with the family and its adviser so that the deed describes causes in terms that can be tested: what counts as inside the purpose, what falls outside, and who decides in a doubtful case. Wording is a legal matter and depends on the governing law of the trust, so this stage ends with an individual analysis rather than a template.

Charitable trust or foundation

Some families hold both: a trust for flexibility and a foundation for a public face. The trustee can describe how each is run day to day, who signs, who is accountable and where records sit. The detailed comparison between structures belongs to the legal adviser; the trustee's contribution is a realistic picture of the administrative load each one creates. The page on combined structures shows how a trustee works when several vehicles sit side by side.

Grant policy and selection criteria

A grant policy is a short written document. It states the causes supported, the geographic or thematic limits, the kinds of recipient accepted, the approval route and how refusals are communicated. The trustee drafts it with the family, then applies it. A good policy also says what the vehicle will not do, which spares both sides awkward conversations.

Family involvement in giving

Families often want younger members to learn from the giving. The trustee can set up a structured role: an advisory group, a yearly discussion of priorities, or a small allocation that the next generation proposes and the trustee reviews. The line between advice and decision stays explicit, so that family enthusiasm never overrides the deed. Where a protector is appointed, working with a protector explains how that role fits alongside the trustee.

Due diligence on recipient organisations

Before money leaves the trust, the trustee checks who is receiving it. Typical questions: is the organisation lawfully established and recognised for the purpose; who runs it; how are decisions made; where do its own funds come from; and how did it use earlier support? The trustee also checks the payment details through an independent channel, because fraudulent changes of bank details are a known risk for any grant maker. Anti-money-laundering rules (AMLA, or LBA) apply to the trustee's work and shape these checks.

Example: a family fund with a yearly budget

Illustration only. A family settled in Lausanne sets up a charitable trust funded for a yearly giving budget. In the first year, the trustee and the family agree a policy: education and local health projects, no individual grants, no political bodies.

During the year, a regional association asks for support towards a training programme. The trustee logs the request, confirms it fits the purposes, reviews the association's statutes and accounts, and asks for a project plan. One family member is enthusiastic, another is doubtful. The trustee records both views and decides, with reasons, to grant part of the request on condition of a short report.

When the budget is nearly used, a second request arrives that fits the purposes well. The policy says the trustee may not exceed the yearly budget without a written amendment, so the request is deferred to the next cycle and the applicant is told why. That is the system working as intended: the constraint was agreed in advance, not improvised under pressure.

Records, reporting and supervision

A giving vehicle should produce a clear paper trail: the grant register, the due diligence file for each recipient, minutes of decisions, the correspondence with applicants and the reports received afterwards. If these are missing, an independent review of the trust will often find the gap first.

A professional trustee in Switzerland is also supervised. The Swiss Financial Market Supervisory Authority (FINMA) grants the authorisation, and ongoing checks on compliance are carried out by a supervisory organisation that FINMA has itself authorised and oversees (Article 61 FinIA). An annual audit by an audit firm also applies (Article 62). What this means for you is covered in FINMA and SO-FIT: what trustee approval means; the routine tasks that follow are described in compliance and reporting duties and the yearly compliance review.

What this service does not cover

• It does not decide the tax treatment of gifts or of the vehicle in any country; that depends on residence, the recipients' location and the structure, and needs individual advice.
• It does not replace the legal adviser who drafts the deed.
• It does not promise that a grant will achieve its aim; the trustee manages the process and the evidence, not the recipient's results.
• It does not give a commercial or promotional role to the family's name.

What a confidential assessment establishes

The assessment looks at your situation and sets out, without commitment, whether a trustee in Switzerland can run the vehicle you describe. It typically clarifies the purposes you want to serve, the existing documents, the people who should have a say, the likely volume of requests, and the records you expect. Fees depend on the structure and are indicated after that assessment. If you are still comparing candidates, how to choose a trustee in Switzerland sets out a decision method, and what a trustee owes the beneficiaries is useful background even when the beneficiaries are causes rather than people.