Let’s try a quick quiz!
How well did you get on? I guess that your pass mark varies depending on whether you are a church leader, a trustee or a member of the congregation.
The role of trustee requires someone who is mature, responsible, trustworthy and has the spiritual interests of the church at heart. Often, church trustees tend not to be self-publicists and so could be very ‘low profile’. They are, however, a body of people with legal authority and so everybody should know who they are – look on your charity’s entry on the Register of charities at www.charity-commission.gov.uk for some of the answers!
If you were able to answer the quiz questions above with ease you have probably got a clearly defined, properly appointed and publicly recognised body of trustees who are functioning very well. If not, you might want to do some research and perhaps tighten up in some areas.
If there are no properly appointed trustees, the results can be chaotic, disruptive and expensive. Sometimes more than one group of people claims to be the trustees and they squabble with each other for control. This can happen in Christian charities.
The recently published investigatory report into the Brotherhood of the Cross and the Star provides a fairly gripping narrative and shows an extreme case of what can happen if there is no properly appointed trustee body. This charitable company ended up in dispute with a Local Authority and on the brink of a High Court order to wind up the company, after years of failing to heed warnings. Eventually, the Charity Commission had no choice but to step in and appoint a solicitor as Interim Manager to salvage and preserve the resources of the charity. Without prompt action, the charity was on the verge of ‘going under’. The rescue was successful, so that eventually new trustees were properly appointed, a plan was devised for the future and the charity is still on the Register. Unfortunately, quite a lot of resources were mis-used and wasted along the way.
Well, perhaps not. However, risk assessment is an oft-maligned, sometimes misunderstood creature seen to be wrapping churches up in time-consuming unnecessary red tape whilst the real work of ministry remains dormant.
It does not have to be so. Rather than being a constraint, trustees could consider the more positive aspects of an assessment, not least its desire to ensure that the ministry aims of the church are better achieved.
We understand risk assessment better than we think. We cross the road when the traffic lights are red, because we assess that this eliminates most of the risk of being hit by a car. The risk remains, but the control (in this case the traffic lights) is deemed sufficient.
Basic risk management for churches follows the same simple pattern. Identify what the risks are, and then see if there are straightforward controls that can be adopted to reduce them, and move forward. Trustees require discretion, but for most churches, in most environments, adopting sensible guidelines and following common sense procedures will mean that most activities can be enthusiastically and safely pursued.
A risk assessment tool
There is no single prescribed way for a church to consider and manage risk. It is more important that a church undertakes an assessment of some kind, that it records its findings, and that it reviews the assessment from time to time.
Stewardship offers a recently revised and updated risk assessment tool. It does not remove the responsibility or discretion required by the trustees but provides a structure to enable them to make informed choices.
The tool itself includes an introductory section showing how it works and provides a couple of worked examples to help trustees in their thinking. The main body of the tool is divided into different topics and areas, allowing churches to focus on those areas that are most applicable to the circumstances in which they find themselves. These topics and areas are:
The tool can be purchased either in its “stand alone” form or in association with a half-day or full day visit from a Stewardship consultant. A specially discounted rate is offered for churches making contact before 30 June 2012, wishing to arrange a visit sometime during the year. Please contact Alan Hough on 0208 418 8166 or email [email protected] if you are interested in any of the packages offered.
Inclusive of VAT at 20%.
1 – Members of Stewardship’s consultancy helpline
2 – Travel costs will be added (either public transport or applying the HMRC business mileage rate – currently 45p per mile)
Viewed in the right light, risk management can be very beneficial and quite liberating to a church even if it is still not the reason that you became a trustee.
To find out more about our Risk Assessment Toolkit, visit our consultancy services web page .
If you are faithful in little things, you will be faithful in large ones; Luke 16:10a (NLT).
This is really another article about Internal Controls written by a former auditor with experience as a Charity Commission investigator; I want to emphasise how important it is that those “little things” are done well.
Little things, like counter-signing cheques after they have been signed (rather than signing blanks in advance), using bank mandates that are up-to-date and properly implemented, ensuring where possible that the division of duties are appropriate or there is adequate supervision, completing Annual Returns properly, making sure that accounts are submitted on time, being seen to be accountable, declaring personal interests in transactions, keeping proper minutes of the trustee or board meetings and ensuring that conflicts of interest are properly managed by absenting those who are conflicted etc. etc. Oh, I know (yawn) that these little things are not very exciting!
However, If these little things are not done well (or at all) it can lead to a general slackness and a weakening of the organisation’s culture potentially resulting in irreparable damage to (particularly the reputation of) a charity. Imagine how difficult it is to seek to restore a damaged reputation or continue to govern a charity where there are serious allegations, perhaps with high profile media interest, resulting in the suspension by donors of much needed funds and the presence and involvement of outside investigators while you try to do the day job.
I know that such disasters are often caused by serious (even criminal) misconduct, rather than a mislaid cheque book here or there, but even in minor investigation situations where a charity is not found to have been “faithful in the little things” the trustees may experience tremendous difficulty in clearing their names, and restoring reputations, when things do apparently go wrong.
For example, getting the accounts and returns in on time is a small thing but it goes a long way to showing how well your church or charity is being run. Failure to submit accounts (at all or on time) or the submission of poor quality accounts is a strong indicator of (possibly major) risk to outsiders (including the Charity Commission) because it is a symptom of poor governance. If these little things are not attended to, what else might be going wrong?
Can I draw your attention to two publications? Stewardship’s Briefing Paper “Financial controls in churches and small charities” (June 2009) explains how to do all of those little things well. On the other hand, the fourth edition of the Charity Commission's annual summary of issues arising from its investigatory work, "Charities Back on Track" (September 2011) was recently published. It gives some examples that illustrate the breadth of serious issues that were investigated, at some considerable cost to the taxpayer, during the financial year 2010-11.
One of the frequent questions that we are asked at Stewardship is about trustees in churches, and how that role interacts with those of the spiritual leaders; ministers, pastors, elders etc. This issue can create confusion and even at times tensions between people. As a result it is an important issue for those involved in church leadership to understand.
The confusion and tension comes out of what the church is; not only a community of Christians working together to evangelise, love and disciple principally governed by the teaching in the Bible but also, very often, a charity governed by UK law. The Charity Commission has guidance for trustees and the Bible has principles for good leadership. These need to work together if the church is to be well governed in both aspects.
It is important in each church setting to work out how these leadership principles are best achieved. This will depend on the type of structure a church has, and who the individuals are in the team. We find that when these are understood and there are good relationships between the people on the team, the different roles work well to support each other and achieve good spiritual direction and good legal governance. Where there is misunderstanding or poor relationships (and one tends to lead to the other), there can be gaps or frictions leading to problems in either or both of the spiritual and legal leadership of the church.
If you want to read more on this area, please refer to our free briefing paper [email protected]. If you think your own church could improve in this area we do recommend you humbly ask God for help, seek to understand the others in your team and work to see this resolved in line with the teaching of Ephesians chapter 4. If you would think it may help to speak to one of Stewardship’s Consultants, who have practical experience of being involved in both spiritual leadership and trustee roles, please contact
blogs by the Stewardship team and selected guest writers.