Your column "Ask what the giver intended" (28
September) is pertinent to our church. Our fund-raising took
our building funds above what we needed to complete roof repairs
and associated works, however, to the sum of £21,000, once all the
VAT was reclaimed. What can we do with this restricted money, as
donations were definitely made for repairing the roof?
MANY churches face issues of this kind over restricted funds, to
a greater or lesser degree. I understand that your fund-raising
plan was correct in needing the total sum, as you had little idea
of how much, if any, would be refunded from the VAT. But it is not
a good argument that because this was VAT the surplus can be
reallocated, because the money was from your restricted roof-fund
in the first place.
If your repair project represented the most urgent or essential
of the repairs that were identified in your Quinquennial Inspection
report, you will shortly have the more minor ones to cope with.
So the ideal route would be to tell the specific donors -
especially those at the later stages of your fund-raising - that
you have a surplus on the roof fund (and why), and to ask if they
would mind if you held it over for further repairs, in a restricted
fund, or would rather that their money was returned. You could even
explain to them the next phase of repair work that you foresee
addressing. How can you do this?
For trusts and foundations, bearing in mind that the
"restriction" is in the intention of the donors, you can send a
letter, or even phone them.
If the last stages of fund-raising were primarily through local
events, you could put an article in your church or parish
newsletter, thanking people for all the generous help that exceeded
the current project, and saying that it is your intention to use
the surplus on future roof and structural repairs. This allows
anyone who so wishes to request the return of identifiable
contributions to the fund, and helps to avoid bad feeling.
For the rest of us, it is worth considering this issue carefully
as we prepare our fund-raising messages. "We face major challenges
in repairing and maintaining the church, and would appreciate your
help. The immediate need is for £XXX for the roof, and this will be
followed by further essential repair." The essence is to find a
phrase that does not totally restrict the funds to the roof works,
but uses roof works as the main target.
The pitfall to avoid is trying to hang on to money that is not
yours; it is the donor's money until it is spent on the specified
project, and, in this case, as it was not spent, it is still the
donor's. The best you can do is to ask if you can reallocate
If you try to squirrel the funds away, keeping as quiet as
possible, do not forget that you are a charity, your accounts are a
public record, and you may wish to use copies of the said accounts
for applying to the same trusts and organisations in the future,
when your contrivance will become immediately apparent. Being
tricky is not the way to go.
Issues and questions to maggie
Use the same email address to obtain information on village
seminars, covering aspects of building works and