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Church organisations: “A broad church – which activities are part of your church, and which are not?”

Photo of Lourens Du Plessis Lourens du Plessis
4 min

Most churches have a number of activities or groups functioning under its wings. Sometimes it’s clear that they are a core activity of the church, or at least function clearly under the direction and oversight of the spiritual leaders of the church and/or the trustees – even if, in practice, they operate semi-autonomously on a day-to-day basis.

There are cases though where the accountability and the impact on a church’s accounts are not as clear. This can particularly be an issue where a church owns their own building, and groups sometimes spontaneously develop out of the church. Are they essentially private clubs or community organisations making use of the building – whether rent-free or rent-paying – or are they part of the church’s activities, governance and oversight?

The first type - those that are clearly under the oversight of the church - should be included in the church’s accounts, while the second - those private groups using the buildings - should not (with some exceptions!).

Examples that we often see include nurseries, youth groups, clubs for retired people, community activities such as tea mornings and craft activities – even Bible study groups, and, increasingly, foodbanks.

Often groups like this have started independently, and have always functioned autonomously, and in other cases that situation has developed over time. For historic, or “identity” reasons, they might not want to be included in the oversight and accounts of the church, or they have a separate bank account and treasurer, see their funds as “their own” money and want to avoid control from “outside” over decision making.

Similarly, churches may not want to include all groups operating in its building, or under its auspices, for pragmatic reasons. This can be things like:

  • It being more work to obtain the records,
  • A clash of personalities,
  • Avoiding higher income thresholds in the accounts (for example, wanting to stay below £250,000 in order not to prepare accrual accounts),
  • Avoiding paying a levy to a parent denomination or network which might be based on income,
  • A preference for more “simple” accounts, showing only so-called “core” activities, and
  • Avoiding incurring liabilities for staff such as pension contributions, and tax and NI.

These may be legitimate decisions if those organisations are truly independent. But there can be some very significant implications if these decisions are incorrect based on the facts, or inconsistent. And some, like avoiding legal responsibilities, are possibly illegal.

A couple of other possible implications if organisations are not included are that:

  • Gift Aid can be claimed incorrectly
  • Insurance cover might not extend to these activities
  • Safeguarding responsibilities can be blurred, or confused.

If this situation applies to your church, some questions that you should ask to determine whether an organisation is not to be included in your church’s accounts:

  • Is it separately constituted with its own board of trustees? Or is there any practical or effective oversight by the church’s trustees, or spiritual leadership?
  • Is there a “letting agreement” in place clearly setting out responsibilities (even if no rent is being paid!)
  • Does its charitable activity fall within the church’s charitable objectives? If not, like a yoga club, it may well be a separate entity. It would be harder to argue a Bible study group – even one managing its own “fund” – is not part of the church.
  • Does it claim to be part of the church (reputational risk to the church)? Beware of websites and other marketing material.
  • In whose name are the bank accounts (if any) registered?
  • Who is responsible for insuring the organisation and its activities? Again, if it’s the church, it may well point to the church being legally responsible and that the organisation should be recognised as part of the church.

Funds for these activities can be shown as designated, or even restricted, funds in the church’s accounts. But it’s not just a matter of accounts. Trustees may be legally responsible for the activities and liabilities of these church organisations if they are not clearly separate organisations. And there may be conflicts of interest to manage if trustees, or their close relatives, are involved in both the charity’s leadership and that of the church organisations. Without effective oversight, trustees may be on the hook for more than they know.

There is no one clear answer, and a lot of these considerations depend on the facts and circumstances. But being purely pragmatic – for understandable reasons – might prove a costly short-term benefit.

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Written by

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.