Lessons to learn from 2021
We learn from mistakes. It is always better to learn from others’ mistakes than from your own (although sadly we are never exempt!) and 2021 has been a year when there were mistakes made in the realm of Christian charity finance and governance that we can all learn from. I have picked 3 that I hope are useful.
I have categorised them under the headings of attitude, accountability and administration. These three characteristics form the basis of our “AAA rating” for churches and charities – or what makes an organisation ‘good with money’.
- Attitude: The danger of dominance
The longer I have worked with churches and charities, the more that I have seen the harmful impact when one person dominates. It is often (but not always) the ‘founder’ or if not the founder, someone who has, by their skill and personality, driven the ministry forward. It is called ‘Founder’s syndrome’.
There is a vital place for leadership which is clear, dynamic and inspiring. But I would add one word to that, without which those others are important – but ultimately a liability and not an asset. That word is ‘teachable’.
In 2021 we have seen an international Christian ministry, a large church in the UK, and a number of more local ministries have their effectiveness seriously damaged with financial mismanagement, complaints of abuse, team members ‘frozen out’, and the key leaders resigning as a result of personal dominance.
To maintain a healthy attitude, key leaders need to be ‘servant leaders’ who encourage other views, receive criticism, and develop team leadership.
To create the environment where that will happen, Christian ministries need to develop a constructive ‘culture of challenge’ – with everyone clearly accountable. I believe it is the responsibility of all in spiritual leadership and charity governance to pro-actively create and safeguard that culture.
- Accountability: Financial controls are worth investment
In early 2021 it was reported that a volunteer church treasurer had been imprisoned for stealing £130,000 from a parish in North London over a 5-year period. The individual was in charge – with no effective oversight – of the parish finances. He was enthusiastic, knowledgeable, plausible and a church member: everything a treasurer should be. But, he was also a ‘lover of money’ and the police described him as ‘a most devious individual’.
The lack of effective financial safeguards let him be tempted, and hugely damage himself, his family and the church. Sadly, this is not a one-off incident, as at Stewardship we hear this frequently – in churches and charities just like yours and mine.
Financial controls are not exciting, but they are a vital part of the fabric of finance.
- Administration: Read your constitution
This may sound obvious but many trustee groups do not. They assume what it permits or forbids. An example, which we see replicated across the UK in Christian charities, is that of employing someone who is a trustee when there is no permission for this in the charity’s legal governing document. The consequences of this are at the least embarrassing and administratively painful. At worst, they can result in resignations and potential financial costs and repayments (fortunately more in theory than in practice).
Constitutions can be confusing. If it is not clear to you, take advice. It is not expensive and certainly cheaper than dealing with the fall out when a board hasn’t understood it.
It may not be earth shattering, but simply reading and being aware of key issues in your constitution is a legally vital requirement and when not done can have major implications.