Making payments to trustees

Making payments to trustees

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Charity trustees do a lot. They are generally people with particular skills, a great deal of commitment to the church or organisation, and they give their time generously. So, when is it appropriate to make payments to them for what they do? There are very strict guidelines on trustees’ expenses and payments produced by the charity regulators in each part of the UK.

These are: 
England and Wales: Trustee expenses and payments - CC11

Scotland: Remuneration (Paying charity trustees and connected persons) 

Northern Ireland: Making payments to trustees

Although the requirements are similar across the UK this briefing note is based on the requirements in England and Wales and needs checking before application in Scotland and Northern Ireland. 

In all cases the first check is the charity’s own governing document which may prohibit certain types of payments.

Expenses
All trustees can be reimbursed for out of pocket expenses when carrying out a trustee’s duties and can include, for example, travel and costs of attending meetings or when on trustee business (including mileage at HMRC rates) and specific telephone charges. It can also cover childcare provision etc. while on trustee business. All expenses must be justifiable and supported by receipts wherever practical.

Paying for services
Trustees often have key skills that are useful to the church such as construction or accountancy. Where a trustee carries out work that is beyond normal trustee duties such as, for the above examples, building maintenance or a professional review of the accounts, they can be paid for the work so long as:

• There is a written agreement between the charity and trustee (not just a note in the minutes) which set out details of the work and payment.
• The trustee declares an interest and does not take part in decisions made by the other trustees regarding the payment.
• The payment is reasonable for the work required – this can be demonstrated by getting quotes (except for small sums) or where the trustee’s rates have previously be market tested, or by comparison with payments made by similar charities.
• The payment is in the best interest of the charity.
• The number of trustees with an ‘interest’ are in the minority.
• The trustees ‘have regard’ to the Charity Commission’s guidance regarding payments.

Payment for trusteeship
Charities must not pay a trustee for carrying out trustee duties whether on a one off, occasional or ongoing basis, unless they have a suitable authority, either in the charity’s governing document, or provided by the commission or the court. A lack of trustees is unlikely to be sufficient justification and the Charity Commission would normally only give permission if the operation of the charity was highly complex and so putting a heavy burden on one individual. Without such authority, any such trustee payment is a breach of trust - even if the charity benefits from the transaction.

Employing a trustee (or connected person)
Sometimes charities who need to employ someone may feel that one of their existing trustees would, for a variety of reasons, be suitable for the job. However, it is essential that any decision must be open, transparent, completely justifiable and made without influence by an interested party. A key point is that if the decision to appoint someone while that person was (or is) a trustee the commission’s approval MUST be obtained unless there is another express authority for it.

Developing a policy
As part of an ongoing process churches should develop an expenses policy. It is important that trustees should not be out of pocket by being a trustee (unless by choice) and a policy should set out what is a recoverable expense (and what is not), what evidence is required, and how to claim. In most cases this should cover a maximum of one sheet of A4 paper. 

This guidance only seeks to provide generalised advice on the subject covered to assist churches in their operation. It is not a substitute for seeking specific advice on particular issue.

Nick Jones

Christmas comes but once a year!

Christmas comes but once a year!

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“Christmas Comes But Once A Year” was a 1936 animated film set in an orphanage. The children wake up on Christmas day and grab their presents to the theme song:

“Christmas comes but once a year, 
now it's here, now it's here, 
bringing lots of joy and cheer…”

However, things soon go sour as the toys break easily and the children take themselves back to bed in floods of tears. Then Professor Grampy hears them, makes new toys out of household items, dresses up as Santa and distributes the homemade gifts to the joy of the children and all is well, Ahh!.

Christmas still comes once a year but not always with joy and cheer.  Our first Christmas card arrived a couple of days ago with a letter saying that our friend’s daughter had passed away due to cancer.  A neighbour has just lost her mother and someone else we know will have the first Christmas without her dear husband.  These and similar situations will be played out across the world and within our villages.  On the other hand, we know a local couple for whom this will be their babies first Christmas.  There are those who will be away with families, others on holiday while some will be home alone, with meagre supplies.  So how can the message of the Gospel (good news) be clearly announced within our villages, towns and cities? 

Professor Grampy doesn’t exist and we can’t go around our villages making everything right, but we do have good news as expressed by Isaac Watts in 1719, “Joy to the World, the Lord is come!”  In Christ we have the answer, even in suffering.  He is also the answer for those who put their hope in riches, in feeling good, comfortable and secure – all need to hear the message of true Joy found only in Jesus and we need to grasp every opportunity to tell them and that is the challenge and privilege we all face at Christmas and throughout the year.

How can we reach out to the hurt as well as those who see no need?  How can we help them see that a baby in a manger is their only true hope of peace?

We will all be in touch with those in both camps, the happy and the sad and we must be prepared to help them find Jesus “Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect “1 Peter 3:15”

In the children’s film “Christmas comes…”, they had a Christmas different and better than the one they expected and that’s what we can and must offer especially when people are more open to the gospel at Christmas. 

David Hughes

Being who you are called to be

Being who you are called to be

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Oscar Wilde once offered the following advice: "Be yourself; everyone else is already taken"  the above advice but I wonder how many of us involved in church leadership actually adhere to this? The expectations of those in our congregations and communities, either overtly expressed or inferred, will invariably exert a strong influence on our identity. Many of the characteristics and behaviour we display in church leadership may in fact be the result of accidental programming arising from the expectations of those whose approval we seek, rather than our own character. I am reminded of a time I met with a group of American church leaders, whereupon by the end of the day I had developed an American accent because subconsciously I was seeking to adapt in order to gain their approval. 

We band the phrase around ‘just be yourself’, and yet I cannot help but wonder how many of us fear that in being ourselves we could end up rejected or criticised, so instead we try to be someone else. Over the years I have encountered many who have tried to emulate the leadership skills of Bill Hybels, the preaching skills of Rico Tice and the pastoral empathy of Mother Teresa, only to feel like they have failed when they have not achieved any of these. They have needed reminding, as we all do from time to time, that we are called in light of who we are and who we are becoming in Christ.

Trying to be someone else can be incredibly exhausting; it can be a huge drain on our minds and  bodies, whilst also being spiritually limiting. It takes a lot of effort to stifle our natural tendencies and create an acceptable image for our environment. The truth is God has created each of us as individuals; no two people are alike, not even identical twins. We are each created for a purpose, and it is not His will that we become carbon copies of others. As I read through scripture I see that God called Moses to deliver the children of Israel, He called Esther to deliver the Jewish people, He called Jeremiah to be a prophet to the nations. God really does know what he is doing when He calls people, and God knew what he was doing when He called you to serve where you are. 

We are called in light of our personality, our character, and our gifting. If your church really needed Bill Hybels, God would have called him. But he didn't, God called you – with your hang-ups, your weaknesses and failings. The Psalmist reminds us in Psalm 139:14-16 that our heavenly Father really does know what He is doing. So, I implore you, as you plan for your Christmas services, be you! It takes far less effort, you don't have to put on a front and it is acting in obedience to the call of God.

Simon Mattholie

Charity Return: When did you last do yours?

Charity Return: When did you last do yours?

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Last month we looked at charity accounting and reporting and saw that all charities (except unregistered charities with less than £5,000 annual income) must complete an annual return for the Charity Commission* This bulletin gives more detail on what the annual return involves.

Returns must be carried out online and completed within 10 months of the charity’s financial year end. It is a legal requirement which the Commission take very seriously. In the event that something goes wrong with a charity failure to complete the annual return will be taken as an indication that the charity has not been run properly. It is a good idea for churches to include in their AGM a declaration that the return has been completed. 

So, what is required? The reporting requirements have varied over the years and the requirements for financial years ending in 2016 and 2017 are in three sections:

Part A: Charity governance. 
This requests information on the following areas:
All Registered Charities:
          Financial year periods and total income and expenditure.
          Charity and trustee contact details.
Charities with income over £10,000, and all
Charitable Incorporated Organisations (CIOs):

          Areas of operation outside England & Wales.
          Volunteers.
          Land and buildings.
          Policies, controls and regulation.
          Fund raising.

Part B: Financial Details This section contains detailed questions and is only required for organisations with an income over £500,000.

Part C: Accounts (if required) and declaration
For most of Rural Ministries’ partners the number of changes each year will be very few so completing the return will not take long. 

The Commission is currently consulting on some changes it plans to introduce for reporting for financial years starting on or after the 1st January 2018. This includes moving to a new web-based system called, appropriately enough, the Update Charity Detail (‘UCD’) service. The new system will include a significant number of questions however many of these relate to such issues as the use of professional fundraisers, income/expenditure outside of England & Wales, and payments to trustees and employees, so they should not have a significant impact on most rural churches. The proposed changes also do away with some of the questions relating to volunteers and internal policies. Although this may be considered welcome it does not mean these things are not important. One question that will remain is whether, in the financial year, the charity reviewed its financial controls. This emphasises the importance the Commission places on this issue. 

* England and Wales only. Separate reporting structures apply in Scotland and Northern Ireland. 

This guidance only seeks to provide generalised advice on the subject covered to assist churches in their operation. It is not a substitute for seeking specific advice on particular issue.

Nick Jones