Funding Advice Bureau SYFAB and TfR's guide to Governance for faith organisations and projects Governance, Policies and Accountability for Faith Organisations and Projects Governance refers to the system and structure by which a project or group is run. Good governance is essential to the success of a project or group, as are appropriate and solid policies and procedures. Any discussion about governance must also consider the groups of people chosen to direct the decisions being made about the day to day running, management and long term vision of the organisation. Just as with other voluntary and community groups, faith groups will, as they become established, need to draft and adopt a governing document, such as a constitution, trust deed or memorandum and articles of association. If you are embarking on a considerable project, you should ensure that the group is fit for purpose and that the documentation in place reflects the vision that its members want to achieve. This sheet will deal with the most common and appropriate options that faith based organisations have when choosing how to govern a project. It will also look at issues around accountability and decision making and will outline details of further reading and useful resources. This is not the easiest topic to deal with; TfR’s advisers are happy to work with you in advice surgeries and through telephone support as you consider governance issues. Choosing a legal structure and method of governance for your faith project. How your project is governed may well depend upon whether you are part of a larger denominational leadership; the governance of your leadership may allow for smaller, branch projects to make their own decisions or restrictions may exist upon your project forming a separate structure, so as to avoid mission drift. However, it is important that your project’s legal structure and model of governance, whether adopted or new, reflects the mission and aims that members of your project have agreed upon and feel committed to – difficult questions may need to be asked if your aims differ significantly from those of your denominational leadership. If you do decide to adopt a legal structure that will sit alongside your denominational leadership the most popular structures that faith projects form are: · Unincorporated associations: a simple membership structure, often suitable for smaller organisations with lower risk activities. Governing document: Constitution. · Charitable Trusts: a simple structure consisting of a group of trustees managing money or property for a charitable purpose. No need for members, unlikely to employ many staff. Governing document: Trust Deed or Declaration of Trust. · Charitable Companies: can buy, own and sell property in its own name and can protect individual members of the organisation from personal liability. Limiting the company by guarantee ensures that members are only liable for a limited sum if the company is wound up (provided they have acted diligently, honestly and prudently). Governing document: Memorandum and Articles of Association. · Social enterprises: businesses with primarily social objectives whose surpluses are principally reinvested in the community. Governing documents: either Contracts or Memorandum and Articles of Association. The National Council for Voluntary Organisation’s (NCVO) Trustee and Governance Information Centre (http://www. ncvo-vol.org.uk/advice-support/trustee-governance) outlines 16 sections of information about the above legal structures, governing documents and models, to name but a few of the areas it explores! Voluntary Action Sheffield (VAS) also provides useful information about the above structures, but in a nutshell it is recommended that governing documents include: · what the group/project is set up to do (its aims, ‘objects’ or purposes) · how the group/project will do those things (powers) · who will run it, make decisions and who is accountable (trustees, management committee) · what happens if changes to the administrative provisions need to be made (amendment provision) · what happens if the group/project wishes to wind up (dissolution provision). Governing documents should also contain provisions for how the trustees/management committee will run the group/project and internal arrangements for meetings, voting, looking after money, etc. Remember to always seek guidance from your denominational body and also see our ‘project planning for faith organisations’ sheet for some more useful information related to this topic. Website: http://www.ncvo-vol.org.uk/ governanceandleadership Website: http://www.vas.org.uk/documents/vas-policies­resources/information-sheets/legal_structures Exploring the Benefits of Charitable Status: If your project has charitable purposes (for the benefit of the public), registering as a charity could be a particularly useful move for you. The advancement of religion for the public benefit is one of the charitable purposes recognised by the Charity Commission. There is quite a lot to think about when starting the process of registering as a faith-based charity, however, the Charity Commission provides an excellent guide to help put you on the right track. Website: http://www.charity-commission.gov.uk/Library/ about_us/faithsc.pdf Website: http://www.charitycommission.gov.uk/Charity_ requirements_guidance/ Specialist_guidance/Faith/ default.aspx Provided that any profit/income is applied for charitable purposes, charities do not normally have to pay: · Income Tax · Corporation Tax · Capital Gains Tax · Stamp Duty · Business Rates: charities pay no more than 20% of normal business rates on the buildings which they use and occupy to further their charitable purposes. S Some banks also provide special terms for charities. · Council Tax: 80% relief on this, more in some areas. Additional benefits: · Gift Aid Scheme: People who give to charities can do so in a way that increases the value of their gift: UK charities can claim back the basic rate tax that an individual has already paid. This amounts to 25p per pound. In addition, HMRC will automatically pay a further 3p for every pound donated. This means that for every £1 donated, your charity can receive 28 pence, so the total value of the donation is £1.28. · Inheritance Tax: Gifts made to a charity by a bequest in a will are free of this. · Public image and perception: Funders are more likely to donate to registered charities due to the assurance of the Charity Commission’s regulatory framework; being a charity and thus having charitable aims promotes recognition that the organisation acts for the benefit of a wide range of people and communities. If your governing body and/or membership decides that it would like your organisation to become a charity and it has an annual income of more than £5,000 then it must register with the Charity Commission. Organisations with an income of less than £5,000 can voluntarily register with the Commission. Perhaps of even more use for faith organisations, since January 2009, those that have an annual income of less than £100,000 and are connected with churches of various Christian denominations can receive excepted status by the Commission; these are not required by law to register with the Charity Commission but are fully under its supervision. Local church charities established wholly or mainly for the purpose of public religious worship or associated to the following, are excepted from registration: • Baptist Union • Church in Wales • Church of England • Congregational Federation • Evangelical Fellowship of Congregational Churches • Fellowship of Independent Evangelical Churches (FIEC) • General Assembly of Unitarian and Free Christian Churches • Grace Baptist Trust Corporation • Methodist Conference • Presbyterian Church in Wales (also known as Calvinistic Methodist Church) •Religious Society of Friends • Strict and Particular Baptists • Union of Welsh Independents • United Reformed Church • The Church of the Nazarene • The Free Church of England • Independent Methodists • Wesleyan Reformed Union • Churches of Christ The final five can be classified as excepted church charities, however the income threshold of £100,000 will not apply and they will have to register with the Commission if their annual income is more than £5,000. For more details see: http://www.charitycommission.gov.uk/Start_up_a_ charity/Do_I_need_to_register/regreq.aspx The Charity Commission has produced an extremely useful guide to help faith-based charities comply with charity law; crucially it recognises that maintenance of a faith identity, core aims and mission is key. It can be found at: http://www.charity-commission.gov.uk/Charity_ requirements_guidance/Specialist_guidance/ Faith/ faithgov.aspx The Charity Commission also boasts a new resource hub specifically designed for charities which expect to stay small, and have an annual income under £5,000. See: http://www.charity-commission.gov.uk/Start_up_a_ charity/Do_I_need_to_register/ Resources_for_very_ small_charities.aspx You may wish to consider a few potential drawbacks linked to having charitable status before following that path for your faith organisation or project. These include limitations of raising funds through trading, the administrative burden of the Charity Commission’s regulations and if wound up, your group’s assets must be transferred to a charity with similar purposes. TfR’s advisers would be happy to discuss appropriate options for your project with you. Policies Appropriate for Faith Based Organisations and Projects Policies are often initiated because of some external requirement, such as environmental compliance or the need for insurance. However, it should be considered good practice to think about what policies may be useful for your project to adopt. The way in which a policy is executed and fulfilled should also be clear in well documented policy procedures, with these being adhered to by all members. For some smaller projects, the hassle of putting policies and procedures in place, and monitoring them, may not seem worth it, but having a good set of policies can highlight your dedication to continual improvement, encourage the use of a safe space, help to secure contracts and assist in the achievement of outward looking, objective quality standards that can raise the profile of the organisation and perceptions of its project. If possible and appropriate, it is also advisable to display the policies to which you adhere in your project’s base location. It is certainly worth checking with your denominational leadership for advice regarding which policies it would suggest you adopt as you may find that you can be covered by your parent body. Some denominations, such as the Methodist Church, have taken the initiative and publish policies that projects within its faith can use. Considering which policies to adopt can be fairly intimidating and it may seem helpful to employ a consultant to set up a policy framework for your group. However, you need to make sure that the policies being drawn up reflect the values of your project and as policies quite frequently need to be adapted according to changes in the law, it should be considered best practice for someone, or a sub-group from your project, to take charge of this. The following questions may make the task of choosing policies more approachable. Do you let your premises to the general public? Policies to consider: • Sale of Goods • Terms of reference/responsibilities for using the premises • Health and Safety • Insurance: Public liability and Professional Indemnity • Equalities Act 2010 • Safeguarding (young people and vulnerable adults) • Inclement weather • Smoking • Environmental policy Do your project members come in to contact with the general public as part of the services that you provide? Policies to consider: • Safeguarding • Data protection • Complaints • Customer charter Do you employ paid workers or volunteers? Policies to consider: • Staff and volunteer training • Redundancy • Out of hours working • Maternity and Paternity • Bullying and harassment • Insurance: Employers Liability • Safe working policy • Grievance • Disciplinary Excerpts from a sample complaints policy Ficton St Teresa Community Hall User Complaints Policy Effective Date: 20th July 2010 Revision Date: 20th July 2012 Approved by: Jim Smith, Chair of Ficton St Teresa Community Hall Purpose: Ficton St Teresa Community Hall is committed to providing a high-quality service to its users. If you wish to complain about the service that you have received then you should contact the Chair of Ficton St Teresa Community Hall on 01234 234567. If your complaint is against the Chair of Ficton St Teresa Community Hall you should contact the Vicar of Ficton St Teresa on 01234 789123. 1. Making a Complaint: Whenever a complaint is received, either by telephone or in writing, it will be recorded in the complaints book and will be acknowledged within 2 working days. Each complaint will be investigated within a further 5 working days and an initial response provided. 2. If you are not satisfied: If you are not satisfied with the explanation and decision made then you should write within 28 days directly to the Chair of Ficton St Teresa. You may use another person to write the complaint for you and request to have a review panel established to investigate the matter further. 3. If you are still not satisfied: A complainant who wishes to pursue the matter further should contact the Vicar of Ficton St Teresa writing at the same address, who will audit the complaints procedure. TfR can help you establish the policies that your group may need. TfR can also support you through the process of writing policies and accompanying procedures. Also useful: Website: http://www.getlegal.org.uk A free online reference and decision-making tool that can be used by charities and social enterprises. Website: http://www.improvingsupport.org.uk “A gateway to the widest range of tools and information, with an easily accessible community for the exchange of resources, ideas and learning.” Running and Managing Your Faith Project: Points to Consider Decisions will need to be made about how to run, manage and develop your project. Careful consideration needs to be made about who does what, when members of the organisation are invited to pass comment on work being undertaken and about who everyone agrees is to delegate tasks, provide accountability and leadership and ultimately have the final say! This is particularly important if your organisation remains a branch project of your larger denominational leadership rather than adopting a separate legal structure, as discussed in the first section of this information sheet. Day to Day Operations: Who will run these? Who will outline daily and weekly workplans, look at training and health and safety matters? Volunteers, work experience/ placement staff or paid staff? Forming sub-groups and committees may help with allocating people to certain duties such as fundraising or advertising. Governing Body: Who do you have on your management committee or board of directors? This provides an opportunity not only for engagement with members of the wider community but also a chance to highlight the inclusive ethos of your work. Consider the effects of having people not involved in a faith group on the committee and the potential benefits of approaching secular members of the local community? Would it be appropriate to involve the young of the community in an advisory group (16 is the minimum age that someone can be legally appointed a Trustee)? Do you know of any ‘specialists’, for example in finance, who would like to be involved as a trustee or committee member directly or seconded from another organisation? Communication: How regularly your governing body meets and how regularly staff and/or volunteers have line management or support meetings depends on the nature of your organistion or project. However, it is important to remember that staff management provides direction and support as well as the opportunity to delegate tasks; members will look to a strong and communicative governing body to provide leadership to take your project forward and ultimately achieve it goals. Key documents linked to governance and leadership: Good Governance: A Code for the Voluntary and Community Sector. Also very useful for governing Faith projects. http://www.ncvo-vol.org.uk/uploadedFiles/NCVO/ Publications/Publications_Catalogue/ Trustee_and_ Governance/NC345%20A6%20COG%20Pocket%20book_ aw%202_LR.pdf "We are often asked to explain what is expected of someone who is appointed to act as a charity trustee. To be a trustee requires time, understanding and effort. It is also a rewarding opportunity to serve the community and develop personal skills. This Charity Commission guidance answers some of the more common questions about being a trustee and briefly sets out the duties of trustees." Website: http://www.charitycommission.gov.uk/ publications/CC3.aspx NCVO has a range of information resources relating to governance and trusteeship, ranging from the role of the trustee to changing your governing document. http://www.ncvo-vol.org.uk/advice-support/trustee­governance NCVO’s Governance and Leadership team champions, supports and enables good governance and effective leadership in the voluntary and community sector. It works with a broad range of organisations, bringing together all sides of the governance and leadership relationship. http://www.ncvo-vol.org.uk/governanceandleadership South Yorkshire Funding Advice Bureau The Workstation 15 Paternoster Row Sheffield S1 2BX Tel: 0114 249 4343 Email: enquiries@syfab.org.uk Website: www.syfab.org.uk Together for Regeneration Sheffield Diocesan Church House 95-99 Effingham Street Rotherham S65 1BL Tel: 01709 309 119 Email: admin@tfr.org.uk Website: www.tfr.org.uk We can provide this information in other formats on request. Please get in touch to discuss your needs. Our information is produced for local community and voluntary groups. No permission is needed for limited reproduction if SYFAB is acknowledged. Large scale reproduction or inclusion in publications for sale must have written permission from SYFAB and TfR. SYFAB and TfR welcome your comments and criticism. You can talk to any member of staff, or contact us by post, phone, fax or email. Registered Charity No: 1061118 (SYFAB); 245861 (TfR) Reg. Company No: 3030641 (SYFAB); 196087 (TfR)