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/.