Diocese of Rochester St. Nicholas Church Boley Hill Rochester ME1 1SL

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1 Diocese of Rochester St. Nicholas Church Boley Hill Rochester ME1 1SL Setting up a Friends Scheme for a Parish Church An outline of a Friends Scheme

2 Introduction Many churches find that a Friends of St. Elsewhere Church scheme is a very useful way of maintaining positive links with many in the community who are not regular worshippers. The scheme can encourage local community life as well as providing additional funds for building maintenance and development. The core purpose of a Friends scheme is to harness the time, enthusiasm, energy and resources of people who are not usually part of the church community. These can include: Fringe members who only come to major festivals Families of baptism children, wedding couples etc; Parents of church based youth organisations e.g. guides, School etc; Former church members who have moved away Local residents willing to support the church Visitors and tourists interested in historic buildings Most Friends schemes have some kind of formal membership structure, with people paying an annual fee (individual 10, families 20, concessions 5) with a newsletter every 3 months. A committee organises a variety of events to appeal to different groups. These events should be organised by the Friends for the Friends and should not be a burden on the existing church community. Fundraising can include: Annual membership fees Gift Aid, payroll giving etc; Social events Fundraising events Applications to trusts, foundations, lottery Appeals for specific projects Legacies and donations Sponsorship by companies, gifts in kind

3 Legal Structure There are two main possibilities for the legal and administrative structure of a Friends scheme: 1 Committee of the PCC 2 An Independent charity with its own officers and constitution The benefits and disadvantages of each of these types of scheme are explored in detail in A Friends Scheme for a Parish Church by Susan Rennison, published by the Diocese of Canterbury 2010 new edition and is obtainable from the Diocesan Stewardship Adviser in Rochester at the Diocesan Office. The first type of scheme is likely to be the most appropriate solution in almost all parish circumstances, particularly in the first few years of operation as the scheme becomes established. An independent charity will be expensive to set up and run and can lead to conflict with the PCC. The PCC needs to give thought to the composition and terms of reference of the Friends committee that will be established. Usually two or three of the church officers are ex officio members to ensure that the Friends activities and fundraising meets the needs and policies of the PCC. The church should not seek to dominate the committee; the whole idea of the scheme is to involve others in it. A member of the PCC will need to be at least the Vice Chair of the committee to ensure a clear line of communication with the PCC. Usually the terms of reference include fundraising for the care, maintenance, restoration and development of the church buildings and land, including the fixtures, fittings and ornaments. The terms need to ensure that all the net proceeds of the Friends scheme are passed directly as grants to the main PCC, the committee should not be spending its funds on the buildings etc;. In law it is the incumbent and the church wardens, together with the PCC who are responsible for obtaining all the necessary faculties from the DAC and approving the spending on the works they authorise.

4 Setting up a Friends Scheme as a Committee of the PCC 1) Friends Scheme as a Committee of the PCC In this type of Friends Scheme, the total funds need to be fully accounted for in the annual PCC report and accounts as a restricted fund. The funds will need to be independently examined or audited with the rest of the PCC funds. Usually the activities of the scheme are mentioned appreciatively in the annual report, with the Friends accounts provided in a detailed note. As the Friends activities and fundraising increases, it may be sensible to appoint a Treasurer from among the committee and open a separate bank account. Gift Aid on donations can be recovered under the church s registration. Membership subscriptions to Friends Schemes are subject to Gift Aid in most circumstances unless the donor derives benefits from membership. A magazine sent to Friends Scheme members does not count as a benefit. HM Revenue and Customs state Where a charity sends literature to its donors, HMRC will accept that the value is nil provided the material is produced for the purpose of describing the work of the charity. The material must be relevant to and distributed in furtherance of the objects of the charity Literature includes newsletters, bulletins and annual reports. 2) An Independent Friends Charity An independent charity falls directly under the regulation of the Charity Commission and must have the form of Independent Examination or Audit appropriate to its size. To recover Gift Aid donations it must be registered with HM Revenue and Customs. An independent Friends charity should be disclosed as a connected charity in the Annual Report for the Church, with a brief report of its work and the support given to the church in the year.

5 Important Notes To Consider You may be tempted to consider an informal Independent scheme without charitable status. This is not an option for the following reasons: The objects and terms of reference are likely to create a charity whether stated or not, and if the income exceeds 5000 the charity must be registered with the Charity Commission. If there is no formal constitution the funds are open to fraud and misuse. There would be no clear boundaries as to where the responsibilities of the PCC began and the activities of the Friends Scheme ended. There would be no mechanism to ensure that the PCC was represented on the committee. If the objects are not charitable the scheme could be classified as a club existing for the benefit of its members who gave donations to the church. It would be liable to tax on the income from its activities and to have tax deducted at source on any bank interest. The key to a successful Friends Scheme is to find and motivate local people with commitment to their local community. These outline notes are issued to give a basic overview in setting up a Friends Scheme. If it is your intention to create such a scheme in your parish, we would recommend that you obtain a copy of Susan Rennison s book A Friends Scheme for A Parish Church from the Diocesan Stewardship Adviser at the Diocesan Office. Please contact: Alan Strachan-Rochester Diocesan Stewardship Adviser on: Or e mail :- alan.strachan@rochester.anglican.org

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