Assistance for Chapels / Documents / 12. Investment


1.   The more general application will be the need to obtain some interest on church funds surplus to immediate requirements.  There are many banks and building societies offering deposit accounts with immediate, short term or longer notice at varying rates.  As charities, churches can be paid interest without deduction of tax. 
2.   Larger sums, such as following the sale of property or the receipt of a material legacy, will bring greater concern.  The Charity Commission guide “The Essential Trustee” gives a duty of prudence, that trustees must “take special care when investing the funds of the charity.”  The prime concern is the charity’s interests.  There will be the need to consider suitability and diversification, review the investments from time to time and take proper advice when investing or reviewing.
3.   If the sum is sufficient it could be used to purchase a chapel property or other land for investment purposes.  Alternatively investment can be made in stocks and shares subject to the appropriate advice and the application of scriptural principles.  Trustees have a general duty to maintain the value of their investments as well as provide an income.
4.   Trustees must be clear whether funds are expendable or constitute a permanent endowment.  The latter is where just the income can be used for the benefit of the chapel and in such a case the capital must be preserved.
5.   It is necessary to be clear on the distinction between the church trust and the chapel trust.  A legacy may be specifically stated in the Will of the deceased as being to the church and will therefore be added to church funds and be under the control of the church through its appointed officers.  Alternatively the Will may specify that the legacy is to the trustees of the chapel to be held by them for the benefit of the chapel and therefore becomes within the direct responsibility of the chapel trustees.  Professional advice should be taken in cases which are unclear.
6.   Banks and other deposit takers have their rules on the opening of new accounts.  Compliance with these requirements can be quite trying and patience is needed.  The church may be required to pass a resolution to authorise the account and the signatories, and a copy of such resolution provided to the bank.  Paper identification, such as passports and utility bills, may be required for the signatories unless the bank follows other electronic procedures.  A copy of the chapel trust deed, church rules and evidence of charitable status, such as HMRC charities reference may be required.
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