We recently met with the Charity Commission’s engagement team to see how we might help churches and Christian charities understand what is on the Commission’s agenda. Given that Christian charities make up a very large proportion of the Charities register – as a subsector, and as part of the larger group of faith-based charities – they are genuinely interested in supporting these charities. They acknowledge there are unique challenges and considerations in this sector and are very grateful to see the selfless and ongoing service of so many volunteers in churches, soup kitchens, foodbanks, and mission agencies.
They noted, however, that faith charities in general struggle with two areas, and from their perspective it looks like these issues are more prevalent in faith charities than others.
The first issue is getting accounts and annual returns submitted on time. This is not necessarily the first priority for charities, and very few people become trustees because they relish preparing and filing annual accounts and returns. There are always “more urgent” things to do, and if this isn’t properly on the trustees’ radar, it’s easy to run into filing deadlines unexpectedly. This, in the Commission’s view, indicates weak governance and makes them concerned that trustees are not overseeing other areas of responsibility in a robust manner either. It also doesn’t look good for your own reputation; the charity’s register showing ‘red’ for governance failures. It may not seem major, but it does suggest we don’t run things well.
However, there are some easy steps that trustees can take to prevent this from becoming a problem. While one trustee may be the treasurer, with primary responsibility for finances, all trustees are still responsible. Having a schedule of meetings, with pre-determined dates well in advance of the filing deadline for approving the annual accounts, means that everyone can plan accordingly. Trustees also sometimes leave this responsibility fully to a treasurer (or even a non-trustee): remember they are also human and volunteers, so do make sure they have the necessary support amidst all of the other pressures of life. We do recommend not leaving the finance all with one person; have a finance team, it really does help in all sorts of ways. (It may seem impossible, but we believe it can be done even in really small churches and charities. Have a look at our briefing paper How To Create A Finance Team for Your Church or Christian Charity (stewardship.org.uk)
The second area of concern for the Commission is the soundness and consistency of internal controls. Churches particularly operate with a “family” ethos, and in an environment of trust. “We know John who makes the payments is a trustworthy person; we don’t need to have someone else authorise payments alongside him” is perhaps a statement that rings true in many churches. Sadly, because of this, churches and other faith charities are more prone to failing to protect those that handle finance and falling prey to volunteers or staff taking advantage. Added to this we think there is sometimes an approach of “God will provide”, so churches and faith charities don’t think they need to plan for and mitigate any number of risks they face. In 2 Corinthians 8 the Apostle Paul recommended being very intentional about finance – without which we see all sorts of problems happening.
If you want to do a check-up of your finances and governance, have a look at our free Financial Health Check tool, or for a more comprehensive risk assessment (something all trustees should do regularly), we have a Risk Assessment Toolkit available on our website. Our Accounts Examination Services team also stand ready to help you get those year-end accounts filed on time: https://www.stewardship.org.uk/accounts-examination Speak to them today!
It is also worth saying that our conversation with the Commission took place just before The Independent Inquiry into Child Sexual Abuse released its final report. Safeguarding is the top governance concern of the Charity Commission, and all charities should make sure that they take their responsibilities seriously. Speak to experts such as Christian Safeguarding Services (https://thecss.co.uk/) or thirtyone:eight (https://thirtyoneeight.org/) for help in this area.
Sharpen
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Lourens du Plessis
Lourens leads our teams who guide and strengthen churches and Christian charities with their governance and finances. Our professional services include independent examinations of charities’ accounts, an award-winning payroll bureau, consultancy and governance advisory services and helping charities get registered with the Charity Commission. He joined Stewardship in 2020 and brings with him a wealth of experience in both the charity and commercial sectors. He’s a member of the Charity Community Advisory Group of the Institute of Chartered Accountants in England and Wales, and regularly interacts with regulators in the sector.
Before joining Stewardship he worked for an international church developing governance and financial stewardship for various ministries. Prior to that Lourens had a senior role at a Big Four firm in the City, advising international investment banks. He is a qualified Chartered Accountant and has a postgraduate degree in Theology.
Lourens grew up in South Africa, but has spent the majority of his working life in London. He is a member of the International Presbyterian Church in Ealing. He is also a trustee of a number of other churches and charities, including a new pregnancy counselling centre, and he’s involved in initiatives to help Christians better integrate their faith and work.
Lourens supports causes which encourage bringing the gospel to people in his neighbourhood and to the ends of the earth, and particularly supporting persecuted Christians around the world.
