What sort of structure is appropriate within a church? How do elders and trustees relate? What level of ‘hands on’ management and direction over a particular ministry is appropriate by trustees? These are some of the questions that need to be addressed as you proceed with registering and managing a separate charity. Let’s look at some of the key issues.
Charitable Trust or Charitable Company?
Currently I prefer the charitable company. Why? First, because this follows a company structure with directors (trustees) and members. The members appoint the directors and this mechanism provides a way of ensuring the church and trust do not get separated. For example, in our church we have only one member of the ‘social’ trust and that is a ‘corporate member’ in the form of the charitable company that represents the church. Thus, the trustees of the church, acting on behalf of that corporate member, appoint the directors (trustees) of the social trust. This ensures the social trust remains ‘tied in’ to the church trust.
The second significant benefit is that the liability of the individual trustee is limited in a company structure whereas in a trust structure the liability is unlimited. So, if something goes wrong with the charity, and there has been no negligence, the company is a more appropriate legal instrument than the trust. But obviously there are many aspects to this and, once again, I urge that legal advice is taken in making this decision.
I started this section with ‘currently’. There will very shortly be the opportunity to use a new type of charity structure called “CIO” (Charitable Incorporated Organisation) which is an amalgam of the trust and company; in many ways this has the best of both. Because it is so new, I would once again, recommend talking to advisers if you think this may be the best route for you.
Who should be the trustees?
In order to strengthen the link between the two trusts (church and ‘social’) I encourage churches to have the same trustees for both bodies. This helps ensure a close bond between the two. Also, practically, it allows urgent matters in one trust to be handled on the same occasion as the trustees are meeting for the other trust. (Obviously appropriate steps must be taken in giving notice of meetings, recording of minutes etc. to ensure they are kept separate but this can save a lot of time and extra meetings.)
What sorts of people?
Who is appointed depends a great deal on the role they are expected to fulfil. The minimum they must do is to protect the trust(s) and ensure that all activities are carried out within the objects and terms of the Trust Deed (if a charitable trust) or the Memorandum and Articles of Association (if a charitable company).
Next, they must have a very good trusting working relationship with the church elders, who bring the spiritual oversight. There is an excellent paper available free from Stewardship. (See Stewardship’s Briefing Paper “Guide to churches on spiritual leadership and trustees” in their ‘Legal and property’ section.)
It is essential that the trustees have a spiritual maturity which allows them to stand in faith with the elders since the elders cast vision and give direction to the church. In Acts 6 the emphasis is on the spiritual leadership appointing practical people to take responsibility for some practical problems in order to relieve the apostles (who were probably also the elders in the early church in Jerusalem) from having to get too involved. I think there is something of a model here for trustees, though there are also many differences – no charities existed in those days! The seven who were appointed in Acts 6 were mature and trustworthy. They understood the people and were recognised by them (they were of ‘good repute’). They did not compete for leadership but complemented the apostles’ gifting.
In the next posting we will consider some further qualities of trustees.