Monday, February 21, 2011

Policies and procedures

I have just started a piece of work for an organisation overhauling their policies and procedures. They haven't got a lot to start with - much too busy doing what they were set up to do. But it is good practice to ensure that any organisation has some basic policies covering (1) health and safety; (2) equal opportunities; (3) confidentiality including data protection; (4) risk assessment; and (5) some financial policies in particular a reserves policy which the Charity Commission requires. I have come up with 70 policies so far that may need writing.

Is this too many? It depends on the size of the organisation, whether staff are employed, whether any property is owned, whether the organisation has members and the range of activities carried out by the organisation. Perhaps more saliently, should any organisation adopt 70 policies all in one go? I suspect that this would not be a good idea because board members and staff really need to understand exactly what each policy means and what if any impact it will have on how they behave and operate.

However if you have a bit of money and want someone in to write your policies you may well be in a position of adopting many policies in a short period of time. In that event every policy should be closely monitored over, say, the first year to ensure that it truly reflects how the organisation works and whether each policy is useful. Although some policies are legally required, it is probably more important to ensure that any policy is actually useful to an organisation. A risk assessment may be one way of finding out which policies are the priorities in the first instance.

Whilst talk of polices may well send the majority of us to sleep there are a few of us who love to see a full staff/volunteer handbook. This should demonstrate that an organisation's board and/or staff have discussed all the areas that their policies cover and decided that this is the way that the organisation will operate.

Such mindful organisations are a joy to work with and provide me with a good deal of confidence that everyone is indeed singing from the same hymn sheet. I would imagine that many of our congregations would be hard pressed to find more than one or two policies - we are all too busy doing what we are set up to do - but perhaps somewhere hiding in the pews is someone who would like to write a policy or two. You can but ask.

Friday, February 18, 2011

The Excepted Church Charity Programme

The latest information from the Charity Commission which can be found here

Excepted Church Charities are local church charities:

* Associated with the relevant bodies which includes the General Assembly of Unitarian and Free Christian Churches; and
* Established wholly or mainly for the purpose of public religious worship

are excepted from the requirement to register as charities by The Charities (Exception from Registration) Regulations 1996 as amended.

This means that although the law recognises them as charities they do not have to register.

Since 31 January 2009 such charities with an annual income of more than £100,000 have been required to apply for registration unless we issue a written determination to the contrary. We will not issue such a determination unless we are satisfied that a charity's income has only exceeded the registration threshold because of exceptional circumstances, such as the receipt of a substantial grant for a purpose that will not be repeated for the foreseeable future.

The Charity Commission says also this

For excepted charities with an annual income of less than £100,000 the exception from registration has been extended until 2012. This will allow time for a review of the 2006 Act to take place in 2011 and for the recommendations arising from it to be considered. We expect that the review will look at registration thresholds generally.

It may be that we will all need to register our Meeting Houses/Chapels as charities - so keep an eye out and prepare your committee for this - it is not as daunting as it may seem.

Wednesday, February 9, 2011

My response to Derek's response

I don’t think that I wrote anything about models rather it was about types of trustees as I imagined your original piece was. That there are some confusing set ups doesn’t negate any of the points that I made – in my opinion :)

I don’t agree with your last paragraph –

The issue of holding trustees and custodian trustees in similarly confusing. Louise is right about the benefits of custodian trusteeship but I would not see them as a substitute for holding trustees. Most trust deeds have clauses relating to what action to take in the event of a congregation closing which can only be actioned by the holding trustees from whom the custodian trustee must take instruction. The important thing to stress is to ensure that holding trustees are appointed when numbers fall.

If you don’t have holding trustees you won’t have any mention of them in the governing document. I am the chair of a local organisation whose property (a key historic building in the centre of town) is held by the Official Custodian and we feel that this is much more secure than having individual holding trustees. ACRE’s advice to village hall committees says this

Where individuals are appointed to be Holding Trustees it must be remembered that these individuals will need to be replaced from time to time, as, for example, when the present trustees die or wish to retire. For this reason many charities prefer to choose a permanent trustee to be the Holding or Custodian Trustee, e.g. the parish council or the Official Custodian for Charities. By doing this there is no danger that the charity will be left without a Holding Trustee for any reason and, in addition, the charity is also saved the periodic expense of appointing new Holding Trustees.

It is clearly a matter of opinion and we can certainly provide a short debate around this issue if people are interested in this.

  • Key to all of this is understanding generally about legal form, charity status and types of trustee;
  • Knowing your organisation’s legal form and whether it is a registered charity
  • Reading and understanding the governing document(s);
  • Understanding your own role; and
  • Acting in good faith with integrity.
******* Derek and I will be teasing out some of these issues at our very short session at the Annual Meetings in Swansea this April. ***********

Derek McAuley's resonse to my previous posting

Louise is quite right in what she most of what she says. Where I disagree is that in my experience what happens “on the ground” is far more complicated than the simple model of governance she presents; that of charity (or managing) trustees and holding trustees. Hers is the desired model.

For most of our newer congregations (i.e. those in past century) this model may apply. A democratically accountable congregation will have wanted to purchase existing property or land to erect a church building and will then appoint holding trustees. For the older congregations we need to consider their history and in many cases there are two or even more sets of managing trustees connected with the congregation. How can this happen you might ask? The concept of democracy was not originally practised in many of our churches and the trustees were actually managing not simply holding. They appointed and paid the Minister. We talk of congregations turning Unitarian during the ministry of certain individuals; what we tend to forget is that they often did so with the active support of the trustees, sometimes against the wishes of many in their congregation.

I have come across a range of trustee situations. In many of the older chapels we have trustees, also known as buildings trustees or property trustees who exercise responsibilities far beyond that of holding trustees.

I shall give some examples to illustrate:

In one the congregation has an elected “Council” with a separate group – the trustees - who maintain the building and pay the housing allowance to the Minister. In another both congregation and trustees have their own charity numbers; indeed the congregation is forbidden to have funds over £20k which they must hand over to the trustees. The trustees are responsible for maintenance and contribute to the stipend and manse allowance; the congregation pays the chapel keeper and day to day running expenses.

In another it clearly states in their annual report they have holding trustees accountable to the congregation (well done!) but they also have a separate manse trust (with its own charity number) the trustees of which manage the building as it is rented out; they don’t simply “hold” it for the congregation. They also have separate trust funds from the closure of another congregation.

One of the more complicated situations I have come across is where a congregation thought they were one body, when in fact there were eight connected with them. These were; the congregation (“excepted” charity under the GA), trustees of the chapel building and site (of whom new trustees were appointed by existing trustees not the congregation), two trusts arising from closure of a nearby chapel with the above trustees as managing trustees, trustees of a schoolroom and other land (who are identical to the trustees), and two separate benefaction funds to support the minister’s stipend.

I suspect that in some cases once investments where in the possession of trustees and had to actively managed they moved to a more managing role. Indeed, the existence of separate managing trustees is often seen as safeguard against entryism whereby a small group in a congregation could possibly gain access to considerable resources; thus trustees appointing to vacancies and bringing in Unitarians from outside the congregation is common.

What I was trying to highlight was a situation where over time, perhaps as the size of a congregation fell, they have concentrated work in one group. I was emphasising the need to ensure that everyone was clear of their legal responsibilities. I appreciate that the failure to include a question about holding trustees may have resulted to confusion about what I was actually saying and I should have been clearer.

The issue of holding trustees and custodian trustees in similarly confusing. Louise is right about the benefits of custodian trusteeship but I would not see them as a substitute for holding trustees. Most trust deeds have clauses relating to what action to take in the event of a congregation closing which can only be actioned by the holding trustees from whom the custodian trustee must take instruction. The important thing to stress is to ensure that holding trustees are appointed when numbers fall.

Wednesday, February 2, 2011

Holding trustees and charity (or managing) trustees

Derek McAuley has written a piece in the Unitarian about trustees and I think that he's got his wires a little crossed. I have sent Yvonne Arburrow the following, which others may find useful

Derek McAuley’s explanation of trusteeship was a little confusing so I will try to clarify matters. First we need to understand who and what has a legal identity - people do and incorporated bodies (companies) do. Most congregations are unincorporated associations. Therefore a congregational body does not have a legal identity itself but the individual members hold the rights and duties associated with that congregation. So as an unincorporated association a congregation cannot own anything – as it has no legal identity. Hold these thoughts!

There are two types of trustees that individual people can be –

1. Charity (or managing) trustees; and
2. Holding trustees.

All charities have charity (or managing) trustees but only those who (a) have property; and (b) are unincorporated (that is they are not a company) also need to have either holding trustees and/or custodian trustees. I will describe custodian trustees later but they are similar to holding trustees.

Holding trustees (I suspect that this is what Derek means by building trustees) hold the legal title to the property. They may have other duties which will be found in the governing document – but they may not. Without additional duties their only role is to be owners of the property – it is not their responsibility to maintain or improve it. And if they have no other duties then they have nothing to delegate. Indeed it is the charity (or managing) trustees who can instruct the holding trustees to do things, for example, sell the property.

Best practice suggests that those who are the holding trustees should not also be charity (or managing) trustees but this is not legally binding unless stated in the governing document. However I suspect that many of us carry these dual roles – the main issue is that we always act with integrity.

I would guess that most of our communities have a (managing/congregational) committee rather than a board of trustees. Charity (or managing) trustees are the people on these committees. They have the general control and management of the administration of a charity, regardless of what they are called. In reality anyone who takes an active part in making decisions about the organisation and its property is a trustee whether they have an official title as charity trustee or not. Essentially if you have some power in decision-making then you have to carry some responsibility.

Therefore if you are someone who thinks that they may be a trustee first find out what sort of trustee you are – holding trustee and or charity (or managing) trustee. Look at the governing document and see what responsibilities charity (or managing) and holding trustees have – if holding trustees are not mentioned then they will only own the building and have no additional duties. Then look at the title deed and see who owns your building.

Because ownership is recorded in the title deeds, if holding trustees change there will be a cost involved in changing the deeds. Also if holding trustees do not meet at all there may come a time when there are no holding trustees left or they have moved away and cannot be contacted. You do not want to be in that situation. Therefore many organisations appoint a custodian trustee as well as or instead of holding trustees. A custodian trustee is an incorporated body (a company) - in all but a few specialised cases. For Unitarian congregations this may be a District (if incorporated) or the British and Foreign Unitarian Association (B&FUA). It is less likely that a company will cease to exist so there will always be a least one legal entity which holds title to the building. Some organisations use the Official Custodian, based with the Charity Commission, to hold the title to their property. A custodian trustee has no say in the administration of the charity.