The Parochial Church Councils (PCCs) of evangelical churches have many questions to ponder at the moment as they face potential changes in the established doctrines and practices of the Church of England. Aside from the deep theological and spiritual questions, many also have practical questions about the use and preservation of their assets for gospel ministry.
In our first article in this two-part series – ‘Principles for preserving assets for gospel ministry’ – we offered some general charity law principles to help guide your initial thinking about these matters. Before reading the article below we recommend you familiarise yourself with the principles, and also before setting up a new charity for fundraising / grant-making purposes, consider alternatives in the first instance, such as the Ephesian Fund (hosted by the Church of England Evangelical Council), or platforms such as those provided by Stewardship.
In this second article, we offer a step-by-step guide to help you in the setting up of a non-PCC trust.
1. Identify at least 3 potential non-conflicted trustees
These people must be independent of the PCC and unconnected with PCC members. It is these people who must take the steps set out below, not the PCC. They should read this guide from the Charity Commission.
2. Identify a source of start-up funding outside the PCC
3. Prepare the governing document for the charity
Guidance from the Charity Commission on setting up a charity can be found here: Set up a charity: step by step
As part of this process, you will need to:
i) Choose an appropriate legal form
This would normally be a Charitable Incorporated Organisation (CIO). A company limited by guarantee (CLG) is also feasible but has increased reporting and compliance requirements. In either case, you will need to decide whether to have the trustees as the only members or to have a wider membership.
ii) Choose a draft constitution
There are a number of models available all of which will require adaptation to be suitable for the purpose of a gospel trust:
- Charity Commission – Available free here. These are basic drafts and necessarily very generic, but will speed the registration process.
- Charity Law Association – If you are setting up a CLG, this version is more comprehensive and available here at a small cost. Not available for CIOs.
- Edward Connor Solicitors – We provide tailored constitutions that will deal with the issues set out below. Please ask us for more information if you would be interested in this.
iii) Draft a wide purposes clause under the heading of “advancing the Christian faith”
Careful thought needs to be given to the precise wording of the charitable purposes of the new charity so as to allow for future developments, and to demonstrate the required independence. It should not refer by name to a particular church or parish.
You may want to use wording such as “advancing the evangelical Christian faith in accordance with the Statement of Faith”. If you go on to refer to particular types of activity (e.g. giving grants, providing accommodation and/or premises etc), insert words such as “including, but not limited to, by [doing x,y,z]” before the description of those activities. The Charity Commission’s guidance on drafting your purposes can be found here.
iv) Choose a name which is not closely linked to the PCC
Check that it is not the same as the name of another registered charity (you can do that here) or a company (check that here).
v) Consider your basis of faith
Referring to a Statement of Faith in the charity’s purposes can help to enshrine the evangelical identity of the charity for the future. You may want to supplement the Statement with particular doctrinal distinctives or ethical statements that expand on the core biblical truths. Specialist advice may be needed on this.
vi) Consider eligibility and removal criteria for trustees
You will want to specify that the trustees must affirm, and live consistently with, the Statement of Faith (plus any additional doctrinal/ethical statements). Significant later divergence should be grounds for removal, as long as the individual’s views are first heard.
vii) Consider the future
If the charity may in due course become a new church then provisions which reflect the church’s theological convictions about church governance and oversight will need to be included. Again, specialist advice will probably be needed.
4. Prepare policies
The following policies will help in answering questions during the registration process:
- grant making (to show that the trustees are exercising their discretion in how they use the charity’s money)
- safeguarding (if you will be funding or running activities involving children or vulnerable adults)
5. Apply to register the CIO with the Charity Commission
NB: This process can take 3-6 months.
This is an online process, which you will find here. There are a lot of detailed questions to answer about your activities and how you will raise funds. You will need to specify a registered office (preferably not the church) and contact details (again separate from the church). The application ends with a trustee declaration form.
6. Post-registration administration
- Set up a bank account
- Prepare stationery and fundraising material
- You may wish to set up a website too
- Trustees must meet separately from the PCC and keep separate minutes with reasons for decisions
- Any donations to the PCC or arrangements with the PCC must be properly documented on an arm’s length basis. Conflicted trustees should not participate in decisions about the other charity
Support and next steps
We hope this is a useful guide to the process. If you would like to explore any of these ideas further, we’d be happy to chat with you. Please do contact us. Here at Edward Connor Solicitors we are praying for you as you think through these issues, for wisdom, grace and peace.
“Trust in the LORD with all your heart and do not lean on your own understanding. In all your ways acknowledge him and he will make straight your paths”
Proverbs 3:5-6
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