Managing your Church's Money

It is important to look after your money throughout the year. 

This will make writing your accounts simpler at the year's end and warn you if problems are brewing.



Banks and Investments



During a Vacancy, the DBF will pay to cover certain services. More information can be found in the documents below.



It is important for all charities to hold reserves in order to prepare for rainy days. Reserves are that part of a charity’s unrestricted funds that is freely available to spend on any of the charity’s purposes. The starting point for calculating the amount of reserves held is therefore the amount of unrestricted funds held by a charity. For information on your responsibility as trustees with reserves please see the Charity Commission guidance.

Each church is different and so will require a different amount to be held in reserve, for example, if you employ staff, their salary and potential redundancy payments should be included in any considerations. In order to consider how much would be appropriate for your church, it is suggested that your PCC creates a Reserves Policy. Advice on doing this, including a draft version, can be found at Parish Resources. Remember, it helps for your reserves to be a range, such as 3 to 6 months' expenditure and so your policy should include what you will do if you fall below your target (below 3 months' expenditure), but also what will happen if you gather too much (above 6 months' expenditure). 

If you would like to talk about this further, please do contact the Diocesan Finance Team.

Banks and Investments

With banks closing their physical branches, and some charging more to pay in cheques and cash, it might be time to look for an alternative. 

It is often helpful to speak to other treasurers about which banks they use and have found beneficial. 

You may also wish to look at changing to a more ethical bank. ECCR have created a helpful guide. JustMoney Movement have an analysis of 4 current accounts suitable for churches & charities, full details can be found here.

If you are looking to invest, the Church of England has funds with CCLA, which can be used by individual parishes and that you may wish to look at. The investments in the Church of England's funds are covered by the ethical considerations of the Church of England's Ethical Investment Advisory Group. 


A brief helpful guide to funds can be found at Parish Resources. They also provide advice on accounting for different types of funds

Your church's money can be divided into unrestricted and restricted funds. Your unrestricted funds are those which the PCC can use how they like in order to fulfil their charitable objectives.

Designated Funds are those which have been given a particular purpose by the PCC, but this is not a restriction, and if needed they could be used for another purpose. For example, the PCC may decide that any unrestricted legacies should be put into a designated fund to help pay for the building's upkeep, but if needed they could be drawn upon for Ministry Share. 

Restricted Funds are funds that must be used for the purpose for which the money was given. A helpful guide can be downloaded here.

This is money which can only be used for a specific purpose from the outset. An example would be the income from a parish fund-raising event which was clearly identified as being for the repair fund. TIn trying to decide if a fund is restricted, it is important to ask about the donor’s intention. Did the donor(s) give the money for a particular purpose, either because they specified a particular purpose or the church communicated  that funds would be used for a particular purpose? If so, the money is almost certainly a restricted fund. They cannot be added to unrestricted funds without the consent of the donor or the Charity Commission.

If you are raising funds for a particular purpose, such as the church roof, this means that this money is restricted. Following a recent case, the Fundraising Regulator have made it clear that charities, including churches, if fundraising for a particular project, need to make it clear what will happen to raised funds if not enough is raised and if too much money is raised. This can be put on your website, or fundraising page, which any promotional printed material could refer to.

It is possible to change the purpose of a restricted fund, if the original purpose is no longer valid, through the Charity Commission. If you are interested in doing this please speak to the Diocesan Finance Team.

Also, restricted funds can be split between those where the initial capital can be spent, and those where it cannot and only the income can be used, known as permanent endowments. Permanent endowments are funds of money which have come to the PCC with the specific instruction that only the interest or dividends generated can be spent. 

In certain circumstances you can spend the capital in an endowment fund. For further information, please visit the Charity Commission and see the Parish Resources' Restricted Funds Guide, and speak to the Diocesan Finance Team.


Page last updated: Wednesday 31st January 2024 9:36 AM

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Supporting other parishes

A number of churches across the Diocese overpay their Ministry Share as a way of supporting other parishes, with these extra contributions forming part of the Ministry Support Fund....

Upcoming events and training this month

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Contact the Team

The Diocesan Finance Team seeks to support parishes in caring for their finances and the associated administration. We can help and offer advice on a wide range of matters, from fundraising to preparing accounts to Ministry Share.

Also, advice can be found on many topics from the Association of Church Accountants and Treasurers (ACAT) and you can sign up for free here.

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