As AGM time comes round again for many charities – churches included – the Charity Commission for England and Wales has issued a reminder, well worth reading in its own right, about the need for charities and their trustees to think very hard about their operations. The Commission suggests that if they have not already done so they should read Charity trustee meetings: 15 questions you should ask [updated March 2017] – the principles of which are equally apposite to Scotland and Northern Ireland even though they have separate and rather different legislation.
In brief, the questions are as follows:
1. What effect is the current economic climate having on our charity and its activities? What do we see in the future? How can we best reflect this in any scenario or forward planning that we do? Are we focusing on the right things, or have we drifted into activities that are over and above our core charitable aims? If we have, is it justified?
2. Are we financially strong enough to sustain our operations?
3. Do we know what impact the economic climate is having on our donors and support for our charity?
4. Do we have any reserves? Do we have a reserves policy? If not, why not?
5. Have we reviewed our banking arrangements and, where relevant, our investments?
6. Have we reviewed our contractual commitments, for example office leases, rental agreements, equipment hire? Do we know what our contractual commitments are?
7. Have we reviewed any contracts to deliver public services?
8. If we have a pension scheme, have we reviewed it recently?
9. How can we make best use of any permanent endowment investments we hold?
10. Are we an effective trustee body? Have we recently reviewed our performance as a trustee body? Have we recently reviewed the skills, knowledge and experience we have as a trustee body? Have our needs changed?
11. Do we have adequate safeguards in place to prevent fraud? Do we have proper financial controls and procedures in place to prevent fraud? Do they need reviewing and updating?
12. Are we making the best use of the financial benefits we have as a charity? Do we understand how to make the most of Gift Aid? Are we making the most of our potential tax relief as a charity?
13. Are we making the best use of our staff and volunteers? Are we aware of our obligations as employers and do we know where to go for further information?
14. Have we considered collaborating with other charities? Are there activities that we think could be run more effectively by working with others, such as sharing equipment, sharing staff, running joint training sessions, or sharing back office services?
15. Are we making the best use we can of our property? Have we thought about how we use any assets, such as buildings or equipment we own or rent? Could we use them differently, share them with others, re-negotiate terms or sell them?
When people are asked to become trustees of a religious charity (or to stand for election to the PCC, which has the same effect) the duties imposed on them by charity law will not necessarily be uppermost in their minds. In a church context, religious folk tend to think in religious terms and it would be rather surprising if they did not. However, trustees of religious charities – like trustees of any other kind of charity – are bound by charity law to act, first and foremost, in the best interests of the trust and to observe the terms of the trust’s governing document.
So, for example, a group of church trustees might not think it necessary to have “adequate safeguards in place to prevent fraud”. Until someone defrauds them: the recent experience of St Boniface, Plymouth, is an awful warning of what may go wrong, in that case to the tune of £90,000. Equally, they might feel that some particular course of action would be right and proper in religious terms without considering whether it might nevertheless be wrong in charity law. For example, in relation to donations outside England and Wales the Charity Commission points out that
“If trustees simply pass funds to another organisation without controlling the way funds are spent, this will not be charitable. So giving cash donations to a hospital without controlling what the money is spent on is not charitable, whereas buying a new piece of medical equipment is”.
It also depends on the terms of the charity’s governing document. If its object is to give grants for the repair of churches in Wiltshire, it is difficult to see how that could include a grant to repair a church in Cape Town – or even in Manchester.
In short, trustees need above all to be careful – and a first step in being careful might be to reflect on the Commission’s 15 questions.