Registering as a charity
Many churches operate as unregistered charities as permitted by the Exception Order. The current Exception Order 2007 makes it clear that this includes partnerships of those Churches, including LEPs. However, those with a regular annual income over £100,000 are now required to register as charities.
The Churches, in collaboration with the Charity Commission, have responded by producing a standard Model Governing Document for Single Congregation LEPs. (The assumption is that other LEPs won’t have this sort of income.) This allows the LEP to do whatever it is legally allowed to do and also looks to future possibilities. Because it is a standard form, it can be approved by the Churches (Diocese, District, Synod, Baptist Association etc) very quickly. It requires new thinking of LEPs since now all individuality and vision is no longer vested in the constitution but in the Ecumenical Vision Statement.
Do we need to do anything now?
The new Model Governing Document should be used for all new or revised constitutions, whether or not they need charity registration now. If you don’t have plans to revise your constitution, simply wait until your next review or until you anticipate your regular income will reach £100,000. The Charity Commission intends to reduce this threshold at some stage, but we don’t know when.
Your Model Governing Document (aka constitution) should be completed with the help of your Denominational Ecumenical Officer and the Intermediate Body. You are not allowed to vary it except where it asks you to make choices. When it is done, it must be approved by the partner Churches. That does not mean the parish or congregation or circuit, it means the District, Diocese, Synod or Baptist Association.
When that is done, you can apply to the Charity Commission for registration which can be done on-line through their website.
What is the limit of the liability of LEP Trustees?
The National Ecumenical Officers advise that Trustee liability is unlimited. Trustees, therefore, should take out Trustee Indemnity Insurance. The Baptist Union of Great Britain offers to those who are Charity Trustees in Baptist churches a leaflet Help I’m a Charity Trustee.
Again, please check that this is still accurate, but this is the relevant paragraph:
Trustee Indemnity Insurance
It is possible to purchase trustee indemnity insurance. This can sometimes offer some protection to Charity Trustees against personal liability. A new power in the Charities Act 2006 allows Charity Trustees to use church funds to buy indemnity insurance – unless the church’s governing document specifically prevents it, which is unlikely. Charity Trustees must be satisfied that the purchase of a Trustee Indemnity Insurance Policy is in the best interests of the charity. You will want to weigh up the benefits and costs of this insurance. Remember that even if you have insurance it will be a condition of the policy that you are not negligent, so if you are able to meet the policy conditions then you are very unlikely to be doing anything that could possibly give rise to a financial claim. The amount of cover may be limited. Some people appreciate this kind of insurance but it does not reduce your responsibility to follow ‘best practice’ and to act sensibly and be accountable with your co-trustees for your actions and decisions. However, it can be beneficial in helping meet the legal costs of defending a claim, and you will have to comply with the terms of the policy.
Please note that this is relevant to any Trustees, including those of Intermediate Bodies.