Ringing and Money
6. Tower Funds
One of a series of articles on Ringing and Money by Steve Coleman
We’re a new band but our tower’s really run down, and we’ve got to start building up money for new ropes and such. So I asked at a Branch meeting how towers normally did that, and two people got so cross with each other I wished I hadn’t. One was saying the church should pay and the other was saying we should create our own tower fund and "… keep the church’s blank, blank hands off it." Oh dear! What do you say?
Well, you’re right, feelings can indeed run high. So high indeed, that you’d best not show this reply to anyone in case they get cross with it too. Of course, bands with long-standing money traditions have naturally grown fond of them, and those traditions must seem satisfactory to them or they’d have broken up in acrimony years ago. But starting out is a different matter, so let’s begin with the technicalities.
Any group of people can get together and form an association. They can do it with a mass of written rules or they can do it without any written rules at all. Indeed, they can do it in such a low key way that they may not realise they have formed an association.
The classic association of this second sort was the office tea club. Someone collected a fixed sum from everyone each week and then bought supplies of tea, milk and sugar. Any money left over was kept in cash in a tin, and when it got too much, everyone had a free week or shared in a tray of cream cakes. A large teapot bought years before, was the tea club’s only asset.
All pleasantly nostalgic in an era of café lattés and healthy eating, but it worked well with goodwill on all sides. Your local band could claim to be an association in the same way. Indeed, perhaps it is. You could even call yourselves The St Mary’s Youths or some such.
But you don’t have to think of yourselves as an association at all, and most bands simply see themselves as being the local band at St Mary’s, and so a subset of all the St Mary’s church workers. And that’s fine too. If you’re not dealing with any money it doesn’t matter in the least because you’re clearly all St Mary’s ringers and authorised to ring there, and that’s that.
Visiting Band Donations
But money makes for complications – especially when it’s not yours – and donations given by visiting bands most certainly belong to the church and not the ringers. So if you put them in a tower fund controlled by the ringers – and then used them for the ringers’ personal benefit – that would, quite simply, be theft.
Of course, very few tower funds are used for the ringers’ personal benefit – indeed, quite the contrary – and in many cases the ringers never wanted to be lumbered with the money in the first place. Often, the tower fund was instigated by some long-departed vicar or PCC treasurer who wanted the money kept out of the church accounts in order to reduce the Quota – the sum then paid to the Diocese and calculated on the basis of the church’s income.
It was improper then, and it’s irrelevant now, but some church treasurers still like ringing visitors’ donations to go into a tower fund because it’s simpler for them. The legal position, though, is absolutely clear. Church funds should be punctiliously included in the church accounts, and that’s where visiting band donations should go.
For the Church
But that said, with the vast majority of tower funds, the church isn’t losing out at all. The ringers contribute most of the money in the fund themselves – often putting in a fair chunk of their wedding fees as well as other donations – and year on year, the great bulk of the fund is spent on the church. The fund pays for ropes, stays, clapper repairs, carpets, paint and the like, without the church being bothered at all.
So is that alright then?
Well, from the honesty point of view, of course it is. But the church accounts are still incorrect and, much more important, it’s financially very inefficient too. The problems are these.
How You Lose Money
First, the great bulk of the tower fund is usually given by the ringers themselves. Much of it is foregone or donated wedding fees, none of which would be taxable on the ringers – see Ringing and Money 1 – but all of which could be given under Gift Aid to a restricted bell fund held by the PCC – see Ringing and Money 2.
Second, a fair amount is outright donations from the local band – and from visitors – which could also be given to the restricted bell fund under Gift Aid.
Third, the tower fund is normally either held in cash by the tower captain or treasurer – in which case no interest is earned at all – or in an account in the tower treasurer’s name – in which case tax is being wrongly deducted from the interest. Either way, there’s a loss of interest.
Fourth, if the money is actually held in an account in the name of the tower fund – and that’s rare – the interest earned is well below what could be obtained by the PCC.
Fifth, all the normal expenditure by the tower fund is subject to non-reclaimable VAT, whereas the PCC can reclaim all the VAT – see Ringing and Money 5.
And lest you think that these figures are trivial, I guarantee that they add up to very substantial sums indeed. And by way of an example, suppose ten years ago your tower fund was empty and you started putting £50 per year into it – almost entirely from your wedding fees – in order to buy new ropes now.
If you held the money in cash as some funds do – or put it into one of those ever-popular building society accounts with a derisory rate of interest – it would now be worth about £500. But even if you put it into a standard building society account of the sort available to small societies, it would only have grown to about £550.
Indeed, even if you’d put it into the best possible account in your tower treasurer’s name, it would only have got to about £590 - although in that case your treasurer would have had to perjure himself on the application form!
But as you well know, none of these sums is anywhere enough for a whole set of new ropes unless you have less than six bells and go for the cheapest option.
But suppose instead you had paid those blocks of £50 into a restricted bell fund in the PCC accounts under Gift Aid. Each one would immediately have become £64.10 – and even more a few years back.
Better still, by investing the money with the Church of England Board of Finance – now called the CCLA – the treasurer would have obtained a good rate of interest with no tax deducted. So the fund would now have risen to about £860.
But that’s not all, because now you’re going to spend it, the VAT savings kick in as well. The PCC can reclaim the VAT on the new ropes but the tower fund can’t. So that £860 held by the PCC turns itself into just over £1,000 of equivalent tower fund spending power.
And if any of your band are higher rate taxpayers or aged over 65, they’ll actually pay less income tax too.
So the result is that putting your donations into the PCC’s restricted bell fund makes them worth almost twice what they would be worth if put into a Tower Fund.
Or put another way, whenever you put two fivers into a Tower Fund, you might just as well give one of them to the PCC and throw the other down the drain.
And on the soft benefits front, with the restricted bell fund route it will be made entirely apparent to the PCC how much the local band are giving to maintain the bells, both in time and money. Giving in secret may well be good for the soul, but giving openly is a far better way of earning brownie points.
And don’t forget that maintaining the bells and fittings is the responsibility of the PCC not the ringers anyway. Of course, maintaining the church building and its contents is a tremendous headache for all PCCs nowadays, and it’s splendid that local bands contribute so much. But no one expects the organist to pay for the organ maintenance, let alone do it himself. I’m not suggesting changing your donations, but it’s normally for the best if everyone’s clear as to what’s happening.
For the Band
But supposing some of the tower fund is spent on the band – to pay their Association subscriptions, for example, or to provide a free annual outing or dinner.
Well, as a tradition, that’s fine, and it may even date back to Victorian times when the ringers’ fourpenny and sixpenny fines went towards an annual dinner, rather like a Christmas savings club. But as a way of handling money in the modern world, it’s not so good. Ringing Association subscriptions are little enough anyway, and if your Association is a charity and your tower fund pays your subs for you, your Association is losing out on the Gift Aid.
And in an era when most people spend enormous sums on all sorts of visits and entertainment, the few pounds spent on an outing or meal once a year doesn’t really need saving up for. More seriously, if one or more of your ringers start to feel disgruntled about who and what the fund is being spent on, your band could be in real trouble.
Looking after the Money
There’s another problem too, and that’s protecting the money. A great many tower funds are looked after by the tower captain or tower secretary who often keeps it in an account in his own name – or even in cash. In many cases he doesn’t even provide the band with annual accounts or a financial statement.
This is a really dangerous situation. No matter how honest the tower captain is, if he dies in office, the band will have the most horrendous problem getting the money back from the Executors. And if the tower captain’s wife or husband is one of the Executors, the band may be reluctant to even try. Equally, if the band fades away, the money often vanishes with it.
Additionally, if the funds are held in an account in the tower captain’s name, tax will be deducted from the interest – when it shouldn’t be – and the tower captain may have problems with HM Revenue and Customs – neither of which is satisfactory. On the other hand, opening an account in the name of a tower fund isn’t particularly easy nowadays either, which means that money is often left in an old account paying less than 1% interest.
So my preference is for the money to be held by the PCC – for it to be a restricted fund in the church accounts. That means it can only be spent on the bells or – just possibly – the tower or the ringers, and using it for anything else would not be legal.
But is it safe there? Is it safe to let the control of all that hard earned money pass out of the hands of the ringers? Could it be that if you put it in the hands of the church treasurer, it might get siphoned off for non-bell matters or even disappear altogether?
Well it most certainly shouldn’t and it rarely does. But "rarely" isn’t "never," and you’d be absolutely right to keep an eye on it. And how you can do that is what we’ll be looking at next time.