Profile: Ian Theodoreson, CFO, Church of England

DR ROWAN WILLIAMS and Lady Gaga find themselves sat next to one another at a dinner party. What common ground can they possibly have to talk about? The answer is that they are both figureheads of markets perceived to be in terminal decline, but are actually growing in revenue terms. While fewer people are buying gig tickets these days, each person is paying several times what they were a few years ago for that ticket – well over inflation. Likewise, the archbishop’s flock is diminishing, but each member is putting more coins on the collection plate each Sunday. 

Which takes some pressure off the Church of England’s chief finance officer Ian Theodoreson, who joined in 2008 to run its three largest operating strains: the Archbishops’ Council, the Church Commissioners for England, and the Church of England Pensions Board, each with their own CEO. This was after 13 years in finance at children’s charity Barnardo’s and seven with Save The Children. “Had Barnardo’s seen the increased level of giving per member that the church experienced in the last 20 years it would be one of the richest organisations in the country,” says Theodoreson. 

The church was in crisis at the end of the 1980s, he says, when the commissioners paid about 60% of the church’s total costs. “At the end of that decade, the message came up that going to church wasn’t a free ride anymore; it would no longer be a couple of pennies on the plate and no one really worrying about it,” he says. “Suddenly it was a case of ‘well guys, we’re either paying for this as a congregation or the whole thing goes down’.” Today the commissioners pay around 17% of the organisation’s costs – most of it is picked up at the collection plate, and the same goes for its pension liabilities.

Exclusive club

Like Gaga’s fans, the Church of England’s congregation could be heading towards becoming a select club of the few who can afford the growing cost of membership, unless it can attract the next generation. Theodoreson thinks that, to do that, it must provide  better and more frequent information to the outside world than it currently does. It has been criticised in recent times for this lack.

“There’s a generation coming through who are consumers of charities and they choose where they put their resources, much like buying a washing machine. It’s a concern for me that the average person probably thinks the money they gave last Sunday is being invested by the Church Commissioners, when it actually invests in historic assets,” he says. “But when something is seen to go wrong, the confidence of the person in the pew is knocked. A lot of the stuff we need to do to address that perception is to project excellence, to be seen to be good stewards, to be seen to be responsible, successful investors, to be seen to be people you can trust. It means we have to keep our communication levels right.” 

Theodoreson has been working on selling greater accountability and reporting to the commissioner and through the dioceses, he says – telling the populace how its money is spent, who uses it, the outcome and the societal benefit, as well as questioning itself about whether the money could be better used in other ways. He wrote a whitepaper on improving accountability for consideration by the commissioner and the Archbishops’ Council, which has a convection current from the Charity Commission (the church is a registered charity), as it requires its members to provide a lot more narrative to their statutory accounts. 

“The Charity Commission is very big on wanting trustees to explain what they are trying to achieve, what their plans are for the next year and the benchmarks to measure success, what their plans for last year were and if they delivered on them,” he says. “When I got here, I really felt that neither the Archbishop’s Council, the Church Commissioners or the Pensions Board had risen to that challenge. So my arrival was a good opportunity to say ‘can we look at the structure of these accounts again?’”

And Theodoreson likes to make himself heard for the right cause. He built a reputation for lobbying the government on key policy issues while in the charity sector, from co-founding the Charity Finance Directors’ Group (CFDG) to stopping the Pension Protection Fund raising a higher levy on some charities that would have forced them to scale back projects and make redundancies. “Back in 1997, when Gordon Brown did his first Budget and took away tax credit from pension funds, I wrote to him and said ‘you’re actually going to screw up the whole thing’, to which I got a reply back saying ‘well no, it’s being compensated by the increase in value of investments’ – and for three years he was right,” he says. “Then setting up a pension protection arrangement where the regulator at the top, whose sole remit is to stop people needing to go into it – that was just forcing companies to rein back on their pension arrangements.”

theodoreson boxHe has recently re-engaged with the CFDG and will start lobbying for causes of importance to the financial health of the church, chief among which, he believes, is the government’s discourse on reforming Gift Aid – of which he says his organisation is the UK’s biggest recipient – and of it moving from tax relief to government expenditure. 

He engaged with the European Union and the Charities Tax Group in 2009 on plans to allow beneficiaries of wills made by UK nationals, who died in any European Union member state, to ‘claw back’ gifts and donations made by that person from the charity. “It was so extraordinary that no one believed it was true,” recalls Theodoreseon. “I realised that this was a really serious issue and started writing to the people I knew, saying ‘have you seen this, do you realise this is real?’ We just managed to get representation into government in time and they decided not to do it.”

CFO wanted

Theodoreson admits that he left Barnardo’s to find a chief executive job in another charity, and was almost disappointed when the headhunter call came with news of a CFO job elsewhere – until they revealed who it was for. But he appears to have made the role into something much closer to a CEO. Managing conflicting needs from three CEOs of the three strains he looks after puts him in a unique position to deliver his agenda for change and persuade them of the reasons for increasing accountability. “I occasionally get involved in FD-type things, but I would be more likely to be taking part in inductions for new bishops,” Thedoreson admits. “I don’t talk to them about finance; I talk to them about vision and motivating congregations.” A ‘stewardship officer’, reporting to Theodoreson, exports that message to the congregation in order to raise giving by £100m year-on-year. 

“It only works because that particular individual is brilliant at networking in the church, building up the confidence of the church and building a network of people who work in similar ways at a local level,” he says. “That is a practical example of how we’re seeking, through the finance function, to add value back into the church.” 

To focus on the relationships bit, he has delegated most of some 150 days of meetings to his 50-strong finance team “in order to stay sane”. He joins just board meetings and some investment committee meetings – though he makes sure he is in every audit committee meeting with all three of the institutions he runs finance for. 

ian theodoresonA meeting that is yet to happen, which Theodoreson will likely be required to take the lead on, would bring mid-tier accounting firm Mazars together with the heads of finance from all its 43 dioceses, the chair of the finance board, the diocesan secretary and their FD. In March this year, Mazars published a report examining efficiency across 42 Church of England dioceses, concluding that its boards are bloated with surplus members and that it is sitting on a cash pile running into the millions.

Theodoreson says the report helps him further the conversation about accountability. “I was hoping to get Mazars to come along to such a meeting, though I don’t want to throw them to the lions. It could be a chance to take everybody with us, hear what the dioceses are saying and see whether we can’t respond. What I have to do is give our people a forum where they can say, ‘this is a good idea’ and then we ask them how we could apply that,” he adds. “And it often falls to me to be the person in the middle, because I have an interest in all of it, to say ‘you are the person who ought to be overseeing this because you are probably the nearest we have to a single voice on this issue’. Which is an interesting dynamic.”

This article first appeared in the November issue of sister publication Financial Director


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