In our considerations thus far I have primarily been considering charities under which a church operates. But are these suitable for specialist ministries such as Social Action?
Is another charity necessary?
Because ministry to those who are poor or in need is almost the definition of ‘charity’ many such ministries feel that a separate charity is desirable/necessary. I always counsel caution about taking this stance. The objectives in a church’s charitable instrument almost inevitably allow for ministry to anyone in the community, perhaps with particular emphasis on those who are poor. So why create a separate charity and impose on yourself the additional load associated with it; meetings, separate accounts etc? One reason for falling into this potential trap comes through terminology.
Project or Ministry?
Often works with people who are poor or in need are called ‘projects’. In defining such works in this way you are adopting terminology that tends to separate the activity from other activities in the church which are called ‘ministries’. Why use the word ‘project’? It can carry associations in people’s minds that tend to be task-orientated rather than people-orientated such as ‘timeline’, ‘project management’, ‘monitoring and evaluation’ etc. All of these may be good (indeed, they can really bring helpful order to a ministry) but are not the normal terminology of other church-based ministries such as children’s work, evangelism, worship. So why not consider the social action ministries in the same light as other ministries and operate under the same charitable instrument? A separate charity may not be necessary.
So, is a separate charity ever needed?
Yes! When fund-raising, in particular, it can be really helpful to have a separate charity. Donors often resist the thought that their grant may be used for ‘proselytising’. Also, if they see the whole budget of the church they may well question why you need their money. By having a separate charity, the accounts reflect the costs of only that ministry without them being hidden within a bigger audit.
Words of caution
However, creating a separate charity carries some challenges. This ‘social’ ministry is a ministry of the church and as such comes under the oversight of the elders. But if a separate charity exists there is the ability for the charity to take on life of its own and become separated from the church. At first no-one can conceive of this happening as everyone is enthusiastic about the ministry. But with time things can change. I know of instances where the visionary leader – often a very passionate and somewhat tunnel-visioned person in the context of social action – has fallen out with the elders and taken the charity out from under the umbrella of the church. In one case the church even had to start a new ministry to meet the same need, and former colleagues became ‘competitors’.
To safeguard against this I recommend that any such charity has the same trustees as the church’s charity, or at least a high degree of overlap. This then ensures that, within the church, the ministry is handled in the same way as all of the other ministries. But it still allows those outside the church to view the ministry as self-standing. The downside of this is that, since the trustees are the same, the charities are seen as linked and the accounts have to be ‘consolidated’ ie combined at the time of audit. However, this does not have to be the only way in which the accounts are presented, which would militate against one of the reasons that two charities exist. It is permissible for the accounts of the individual charities to be presented separately for fund raising purposes.
Does a separate charity from the church’s charity require trustees to become more involved and thus overloaded? We shall discuss this in the final part of this series.