Last year we posted on 15 questions church charity trustees should ask? and Churches as charities: some basics. In the following cross-post from the Ecclesiastical Law Society website, Catherine Shelley looks specifically at the position of Church of England PCCs – but much of her advice is equally applicable to church charities of other denominations.
PCCs are charities established by the Parochial Church Councils (Powers) Measure 1956, which sets out the purpose of the PCC as “promoting in the parish the whole mission of the Church”. The rest of the PCC’s ‘constitution’ is the Church Representation Rules (set out in Schedule 3 to the Synodical Government Measure 1969). As the annual income of most PCCs will be over £100,000 they should be registered on the Charity Commission website – but even if your charity is exempt or excepted from registration it is still obliged to follow charity law.
The Charity Commission’s six core principles for charity trustees are as follows:
- Ensure your charity is carrying out its purposes for the public benefit
This is following the objects ie Mission, and it is essential to ensure that money is still being spent for public benefit – church is not a private club
- Comply with your charity’s governing document ie PCC Measure and Church Rep Rules – and the wider law ie Church law, charity law and the range of other laws eg health and safety, safeguarding, employment (if applicable), planning etc
- Act in your charity’s best interests
- ie, by making sure that you act for the church and not any conflicting interest, eg a related school;
- ensure that the decisions are yours, not those influenced by others.
- Manage your charity’s resources responsibly
For the charity’s purposes, following proper procedures to ensure affordability, proper investment, proper value and security against theft/fraud. Church law requires an inventory and quinquennial inspection as part of this duty.
- Act with reasonable care and skill
… according to your ability and experience: eg, a lawyer or accountant would be expected to have more knowledge and skill than someone without a professional background. So far as possible, seek to have people with relevant skills – and to train up those who do not have such skills or background.
- Ensure your charity is accountable
Accountability is to the law, the parish and the wider purposes and public benefit of the charity. Decision making is collective (Father does not always know best!). Whilst the PCC Measure requires ‘cooperation’ with the vicar, all votes carry the same weight. If you do not feel that you have sufficient information on which to base a decision or assess whether action has been taken properly, then you are entitled to ask for more information. That includes information about finances.
Making decisions as a trustee
By majority, collectively and in accordance with governance documents, eg in relation to the quorum. When you and your co-trustees make decisions about your charity, you must:
- act within your powers;
- act in good faith, and only in the interests of your charity;
- make sure you are sufficiently informed, taking any advice you need;
- take account of all relevant factors you are aware of;
- ignore any irrelevant factors;
- deal with conflicts of interest and loyalty;
- make decisions that are within the range of decisions that a reasonable trustee body could make in the circumstances; and
- RECORD decisions.
Personal liability… it’s extremely rare…
As a corporate body, a PCC has its own legal identity, so and contractual obligations it enters into or liabilities it incurs are enforceable against it, rather than against its members. And whilst it would be possible for members of a PCC to incur personal liability if they were to act in breach of the duties that they owe to it to act in its best interests (eg because they take a reckless decision which causes it loss), that situation is, fortunately, very rare.
However, if PCC members are concerned about such a possibility arising, they can consider taking out trustee indemnity insurance to cover themselves against it. Further information about the position can be found in the opinion of the Legal Advisory Commission, Parochial Church Councils: Legal Position of Members.
Demonstrating that you are fulfilling your trustee duties
Adopting policies about the following areas of work can help:
- Public benefit – how do you help the public and how are you open to the public? – the statement should be included in the PCC’s annual return to the Charity Commission.
- Conflicts policies and managing those with influence.
- Reserves policy – a balance between using funds prudently so that you can meet operating costs for 6-12 months if something goes wrong BUT also showing that you are spending your money for the purposes of the charity.
- Ensuring that you have adequate insurance.
- Recruitment policies for volunteers, staff, trustees – ensure adequate skills.
- Are your banking mandates and financial controls in order?
- Complaints and grievance policies.
- Data Protection policies.
- Expenses, gifts and hospitality.
- Risk assessment and safeguarding.
Cite this article as: Catherine Shelley, “PCCs and charitable status” in Law & Religion UK, 17 October 2016, https://www.lawandreligionuk.com/2016/10/17/pccs-and-charitable-status/.
” As the annual income of most PCCs will be over £100,000 they should be registered on the Charity Commission website”
I very much doubt that the annual income of most PCC exceeds £20,000 let alone £100,000.
You would be surprised, but there are at least a couple of examples in every diocese. These are mostly evangelical-tradition city churches with contemporary services and large congregations who use their building(s) for events and various activities.
I wonder how this fits in with paying Parish Quotas to the diocese, most of which may not benefit the parish in particular. Are PCCs required to make a determination as to whether sending any money at all to the diocese is the best way of meeting the needs of the parish? If so are they required to assess the appropriate amount, taking into account other calls for funding within the parish? Do PCC members need to evaluate what the diocese proposes to spend it on? I’m pretty sure that the Church nationally expects PCCs to pay the amount demanded, as if it were an obligation, which, legally, I think, it is not..
I echo John Hanks’s comment (11.28 on 17 October). When I first read Catherine Shelley’s article in the ‘Harvest’ edition of the Ecclesiastical Law Society’s ‘Gospel & Law’ bulletin, I replied as follows:
“I think Catherine is out of touch with the situation in rural areas when she states the “the annual income of most PCCs will be over £100,000.” None of the five PCCs in my multi-parish benefice in Suffolk has an annual income anywhere near £100,000, and of the 19 parishes (comprised in 8 benefices) in the Sudbury Deanery, only three (Bures, Sudbury St Gregory, and Long Melford) had an income in excess of £100,000 in 2015. The average total income (restricted and unrestricted) of 15 of the other 16 PCCs (I don’t have the figures for one small parish) was £31,799. I would expect this pattern to be replicated in most of the rural benefices in the county.”
Adam says that there may be ‘a couple of examples’ in every diocese (and I have identified three in my deanery), but that is far from being ‘most’ PCCs.
Catherine responded to me as follows:
“The feedback about parish incomes is very helpful; Frank Cranmer and I were speculating about how many parishes would cross the income threshold and therefore be registered at the Charity Commission. Am happy to accept the charge of being out of touch with rural ministry – my various licences have been held in Manchester, Birmingham, London and Southwark!”
My guess (but it’s only a guess) is that the figure is unlikely to exceed 25 per cent overall. Big urban churches with large congregations will no doubt exceed the £100k threshold, but I can’t imagine that many rural parishes will.
Information on Deaneries within our part of the Diocese of Oxford is summarized here. The only caveat is that these data relate to parishes rather than congregations: our £83,709 is for SS Peter & Paul, Wantage and Holy Trinity Charlton.
While indicative of annual income for each parish, these are parish share figures, not the income figures. (The figures I gave for Sudbury Deanery in the Diocese of St Edmundsbury & Ipswich were income figures.) They do, though, appear to bear out the point that PCCs with an annual income over £100,000 are very much in the minority.
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Help! We are using our glebe land for camping in the summer. This raises £20k for the church to help pay its parish share. Our total income doesn’t cover this! (26k well under 100k) we use the camping trading arm to collect camping fees using Stripe which is integrated into a camping booking website called cool camping. Stripe now require heinous details of all their clients of which our church is now one. They demand, and will continue to suspend our account until they have the certificate of registration of our charity – the Church of England. They are based in California and haven’t heard of us. How do I obtain a facsimile of this? I can’t personally access it through the charity commission website. Stripe and similar financial bodies are being leaned on because of money laundering, I suspect.
I suggest that you raise this with your Diocesan Registrar pdq.
In case this is of use to anybody else – a number of smaller PCCs have managed to deal with people like Stripe doing anti-money laundering checks using the exception certificates from A Church Near You. Go to the record for your parish, click ‘more information’ and scroll down on the right – there’s a ‘Download Certificate’ button.
No reply as yet! Thanks. Someone else MUST have needed this info….
I suggest you refer them in the first place to section 3(1) of the Parochial Church Council (Powers) Measure 1956 which, as amended, provides by section 3(1):
“Every council shall be a body corporate by the name of the parochial church council of the parish for which it is appointed and shall have perpetual succession.” The PCC is, therefore, a properly constituted body and a legal entity in English law.
You can point out that a Church of England Measure has the same legal effect as an Act of Parliament and is part of the law of the land. You can add that the functions of a PCC are set out in the Measure (so that there is no need for any separate constitution) and, when dealing with money, section 4 provides:
4 Powers vested in council as successor to certain other bodies.
(1) Subject to the provisions of any Act or Measure passed after the relevant date and to anything lawfully done under such provisions, the council of every parish shall have—…
(ii) The like powers duties and liabilities as, immediately before the relevant date,
the churchwardens of such parish had with respect to—
(a) The financial affairs of the church including the collection and administration of all moneys raised for church purposes and the keeping of accounts in relation to such affairs and moneys;
You can then add that while it is a charity, a PCC whose annual income is under £100,000 is currently excepted from the general requirement for a charity to be registered with the Charity Commission, referring them to this webpage:
https://www.gov.uk/government/publications/excepted-charities/excepted-charities–2, adding that it is for this reason that your PCC is not required to have, and does not have, a certificate of registration.
I hope this helps. Let us know how you get on! (Your church won’t be the first to have encountered this problem, with third party organisations unfamiliar with the exception applicable to C of E (and other) churches with an income less than £100K.)
Needless to say, I agree entirely with David. But a letter, preferably on diocesan headed paper, from the Registrar might have more impact than one from your PCC. It’s California: they just don’t understand this stuff.
If two Anglican churches each with their own with PCC merge to form a benefice with just a single PCC, can their two charities continue independently as of the two separate churches or do they have to be merged under the one PCC ?
That is a question you should ask your Diocesan Registrar.