Most approximations to the exchange-correlation functional of Kohn-Sham density functional theory lead to delocalization errors that undermine the description of charge-transfer phenomena. We explore how various approximate functionals and charge-distribution schemes describe ground-state atomic-charge distributions in the lithium benzene complex, a model system of relevance to carbon based supercapacitors. To understand the trends, we compare Hartree-Fock (HF) and correlated post-HF calculations, confirming that the HOMO-LUMO gap is narrower in semilocal functionals but widened by hybrid functionals with large fractions of HF exchange. For semilocal functionals, natural bond orbital (NBO) and Mulliken schemes yield opposite pictures of how charge transfer occurs. In PBE, for example, when lithium and benzene are <1.5 angstrom apart, NBO yields a positive charge on the lithium atom, but the Mulliken scheme yields a negative charge. Furthermore, the partial charges in conjugated materials depend on the interplay between the charge distribution scheme employed and the underlying exchange-correlation functional, being critically sensitive to the admixture of HP exchange. We analyze and explain why this happens, discuss implications, and conclude that hybrid functionals with an admixture of about one-fourth of HF exchange are particularly useful in describing charge transfer in the lithium-benzene model.