Policy background
NHS charities are charities regulated under charity law, but which are also linked to NHS bodies and bound by NHS legislation. They are charitable trusts established under NHS legislation and have as their trustee an NHS body, such as a foundation trust, or trustees appointed by the Secretary of State for an NHS body. The Secretary of State also has statutory powers to transfer trust property NHS charities hold. As such they are distinct from independent charities established solely under charity law.
	Funds donated to the NHS must be held separately from exchequer funding provided by the taxpayer. NHS bodies’ statutory remit is derived from NHS legislation, which allows NHS bodies to hold property on trust both for the purposes of their linked NHS body (usually an NHS trust or foundation trust), or for any purposes relating to the health service. NHS bodies which can hold charitable funds are NHS trusts, special health authorities, foundation trusts, clinical commissioning groups, and the NHS Commissioning Board (known informally as NHS England). The default position is that the board of the NHS body acts as corporate trustee of the charitable funds, though those charitable funds may also be held by trustees appointed by the Secretary of State for the NHS body in question.
	Since 1973, the Secretary of State has had powers to appoint so-called "special trustees" to manage charitable property on behalf of hospital boards; in 1990 powers for the Secretary of State to appoint trustees in relation to NHS Trusts were enacted, which have since been extended to the other NHS bodies. These powers are now set out in the National Health Service Act 2006 (as amended).
	Trustees appointed by the Secretary of State have powers to hold trust property on the same terms as NHS bodies. The Secretary of State has directed the National Health Service Trust Development Authority, a special health authority, to carry out his functions relating to the appointment and removal of trustees, in accordance with orders made by the Secretary of State under the National Health Service Act 2006. Corporate trustees who considered that the appointment of separate trustees might be appropriate, e.g. to separate trustee and exchequer responsibilities, or to harness expertise in administration of charitable funds, could approach the Department of Health to ask the Secretary of State to use his powers to enable the appointment of separate trustees. The Department of Health would consider the business case for doing so, taking account of factors such as the size of the funds involved. As an example, guidance issued by the Department of Health in 2011 said that assets of more than £10 million and annual income/expenditure of £1 million would provide a clear case for appointment of separate trustees.
	As at March 2015, there were around 260 NHS charities, with a combined income of £327 million and asset value of £2 billion. The top 30 NHS charities accounted for over two-thirds of total NHS charity income/assets. The vast majority of NHS charities use the corporate trustee model. The Secretary of State has appointed separate trustees to 20 NHS charities, including most of the largest charities.