Managing the finances

Money is a mixed blessing: with the best will in the world, a relationship between your church and another overseas can flounder on issues of finance.

It’s best to establish shared understanding and to put reliable measures in place at the outset, to prevent damaging problems arising later.

Start as you mean to go on

If you’re establishing a new financial relationship with an overseas church, make sure you have the necessary information about its legal status, constitution, office-holders etc – not just for your own accountability, but to satisfy Gift Aid tax relief regulations in the UK.

Make sure you’re happy with the governance systems in place in your partner church, particularly with regard to financial management and decision making – for example, does the person you’re dealing with have the authority to make agreements? Who is the leader accountable to? Does the church have an independent financial audit?

Before embarking on a financial relationship with a partner church or project, make sure you have a clear understanding and agreement about what the money is to be spent on. If someone is proposing a project for funding, ask for a budget and a clear description of how the money is to be used, and agree timescales for the work. Set up agreed procedures for regular reporting on progress and expenditure and put them in writing.

Church groups who want to fund projects should be very clear about their own standards and accountability to their church families for monies raised for specific projects, particularly if they sit outside the clear procedures LGMI and its partner organisations have developed.

It is possible that you will be perceived as a ‘rich westerner’ and asked for money by individuals for their personal needs. Be prepared for how you will handle such requests.’

Tehi Jeannette, TeenChanllange-Abidjan , member of a team to Ivory Coast.

Accountability for all concerned

Put in place measures and systems to ensure accountability for how funds are allocated and used at both ends of the relationship – in your own church and in your overseas partner church or project. For example, set up a manageable system of regular reports, photos, accounts, copies of invoices, receipts for significant sums etc from your partner church or project so that you can report back to your church on how the funds they’ve given have been used. It’s best to put these arrangements in writing so everyone involved has a clear understanding of their responsibilities. Remember that UK tax legislation requires a charity to take ‘reasonable steps’ to ensure money going overseas is used for charitable purposes and to be diligent in ensuring this is so.

Ensure that in your partner church, as in your own, the principle is established that more than one person is involved in the use and disbursement of funds: in simple terms, the person authorised to decide how the money is spent is not the same as the person who actually disburses it. If both responsibilities are vested in one person (e.g. the pastor or project leader) it can be difficult for them to resist pressure when members of the community present other pressing financial needs, with the result that funding is diverted from its intended purpose.

If you’re funding a specific project, it will be easier for you and your partners to keep track of expenditure if the funds are held in a separate account. It’s also advisable to have more than one signatory and to keep accounts of transactions in the account. This will require a little bookkeeping.

Think carefully about how you transfer money overseas. Taking cash in person carries security risks but may be necessary in some places where the banking infrastructure is less developed. Where possible, do an international bank transfer – though there will be charges.

It’s more than money

Be sensitive with your funding. Injecting too much money can risk derailing the spiritual direction of the local church, for example by forcing it to focus time, energy and people on spending the money rather than doing the sustainable things they used to do.

Take into consideration the risk of your injection of money causing inequality, insecurity or jealousy in your partner church. For example, if you’re funding a project, does the scale of your financial input and your requirement for accountability mean the church has to employ a bookkeeper who’s more qualified (and higher paid) than the person currently doing such work for it?

Bear in mind that your financial support for a project can mean that the people involved in it have a higher standard of working environment, equipment and salary than others in the same church, and this can cause tensions and relationship problems that you did not intend.

finally, if you need more information, advice or support; we recommend you check out some of Stewardship’s great briefing papers which are all freely available on their website.