The Charity Commission for England and Wales have just published revised guidance for trustees of faith charities.
An article from our archive for the New Year…
The guidance tells us that ‘…places of worship such as churches, gurdwaras, mandirs, mosques, synagogues, temples and viharas are normally charities’. They normally exist with purposes that are entirely charitable. This includes…
advancement of religion
prevention or relief of poverty
advancement of education
The Commission also notes that there are ancillary organisations of faith that are also charitable in their endeavours, namely
religious supplementary schools
You must register your organisation as a charity if it has charitable purposes for the public benefit and (both of the following)…
it’s based in England or Wales
it has income over £5,000 (from all sources)
There are, however, some churches that are exempt from charitable registration. You can find advice and information about this here…
Faith community members, who are already trustees, or community members who are considering becoming trustees, will find this guidance, detailed, timely and helpful in making your full contribution to the work of your charity.
A full copy of this guidance can be found on the web pages of Gov.uk here…
”Humentum is the leading global nonprofit working with humanitarian and development organisations to improve how they operate and to make the sector more equitable, accountable, and resilient. Funders for Real Cost, Real Change (FRC), a collaborative of private foundations, commissioned this research and report to gather evidence on the extent to which international donor funding covers the real administration costs of national NGOs…”
This provocative and challenging report, from the organisation Humentum, makes a strong case for a continued imbalance in the allocation of funding, the imposition of power structures and the seeming immutable nature of the funder and funded relationship.
Although focused on the international/NGO sector, some of the key research findings, and recommendations by Humentum, could equally apply to the most modest community projects at home. Are we understanding our own detailed cost needs as a project, are we asking our funder for the full cost recovery amount and is our funder advancing enough funding, which is unrestricted, to best flexibly serve both delivery and sustainability of our project/cause over time?
The Humentum report quests for a funding context, where funders need to realign their relationships, making them more equitable, and that all parties become more accountable inside that interactional relationship.
It argues cogently from the NGO voices heard that what is needed is…
• a stronger long-term partnership approach that directly addresses the challenge of the unequal power dynamic inherent in the funding relationship.
• longer-term funding agreements with a significant component of general operating support to enable NGOs to become more sustainable, including building up unrestricted reserves.
• better cost coverage of all the administration costs associated with projects, including items such as start-up and closure costs, with less reluctance to fund salary costs.
These deficits in relationships and sweep in grant making result, for Humentum, in the starvation cycle. Humentum argue that for grantees to break out of this constricting and distorting cycle, then funders need to apply a change of approach. Namely, to offer…
a) full cost coverage
b) means by which grantees can contribute to unrestricted reserves
c) support to strengthen grantees’ cost recovery capabilities.
There is to us, thinking again about the local project context, an irony in the application of a grant, which may result in great creative, expertise and community development lift for a local project, which at the same time, because of traditional funding methodologies, powers the deliverer of the grant aided umbrella project into an inability to work for sustainability, skills uplift and cost recovery management to ensure that ‘starvation’ does not occur.
In conclusion, the Humentum paper makes three key recommendations…
Funders should commit to consistently covering a full and fair share of all associated administration costs.
Funders should directly fund grantees to strengthen their financial management, cost recovery and fundraising capabilities, and provide unrestricted funding to build reserves.
Funders should systematically collect data on the extent of adequate cost coverage. This data should be used to drive internal accountability and motivate funders to provide their full and fair share of administration costs in restricted funding agreements.
Could the Humentum research transform the funding landscape, wherever the context? It’s a provocative paper…
It’s always a good time, at the start of the New Year, to revisit your priorities, aims and ambitions. The links below are for charities and small organisations to use as free resources for conceptualising governance review or business re-appraisal activities.
They are not exhaustive, but they can help provide ideas and a framework for assessment, change and re-energising in the New Year. We hope that you find them useful?
Essential trustee videos – a series from The Foundation for Social Improvement:
These audio-visual short films can help you determine your thinking on…
Your purpose and pubic benefit.
Compliance and acting in the organisations’s best interest
Utilising your resources responsibly and acting with care and with responsibility
Supporting small charities – a collection of free resources from Lloyds Bank Foundation in England & Wales
”These toolkits have been developed in partnership with Lloyds Banking Group and our experts to provide practical support and guidelines on best practice for charities.”
We liked these resources a lot. They are comprehensive, often surprising in their content, and free to use. This is definitely a web site to explore. Whether you are planning something new, pondering change or looking to solidify your governance with confidence.
SDCVS is a local charity ...registered in England & Wales as a charity (number 1101450) working to improve the quality of life for people in South Derbyshire. They do it by providing services to individuals and families in need, as well as helping voluntary groups and communities to become self-supporting.
We are delighted to support their good work this festive season. Any amount you can give will be used to directly benefit the charities users, at a time of year that often brings especial difficulty. If you do donate, thank you very much!
The SocEntEastMIds Team
‘This year we will provide around 1,000 emergency food parcels to individuals and families in need in South Derbyshire. The festive season can be particularly difficult for people experiencing financial hardship – so our help and support is crucial at this time.
That’s why we’re appealing for financial donations to help feed families across South Derbyshire who are struggling. This can be for all kinds of reasons – ill-health, job loss, bereavement, homelessness or other changes in personal circumstances.
Big or small, a gift from you will help us make sure no-one in South Derbyshire goes hungry this Christmas’. Source: SDCVS web site…