HELP WANTED!

[Andrew Farthing]

I've posted a piece on my blog http://englishchess.org.uk/farthing/ called, "So much to do, so little time...".

Once you get past the slightly self-pitying title, it's a summary of the various ECF activities that I'll be most involved in during the coming months. It's not an exhaustive list, sadly, but it covers the major items.

I hope that the blog post is of interest in itself, but my real purpose in mentioning it here is to draw attention to the "Help Wanted" plea towards the end. It would not only help me but would also improve the quality of what the ECF delivers if I could find a volunteer or two interested in becoming Alternate to the Chief Executive and/or Strategic Planning Officer. These roles were combined when I did them for my predecessor, Chris Majer, and this might be an option again.

It's asking a lot, I know, but if there is someone out there interested in helping to steer the ECF through what will undoubtedly be a challenging time, please do get in touch with me.

Payment will be made in the usual currency (undying gratitude and out-of-pocket expenses).

[Sean Hewitt]

Andrew - would it be possible for the papers for a council meeting to be posted on the website as a zip file so that you don't need to download a zillion different files?

[Alex Holowczak]

Andrew - would it be possible for the papers for a council meeting to be posted on the website as a zip file so that you don't need to download a zillion different files?

Sean, e-mail Andrew at the Office. I asked that for the last meeting, and he was happy to oblige.

[E Michael White]

Andrew Farthing
I may not be up to date with the latest charity laws but I believe your blog statement :-

..... and the rules are that if an organisation’s goals and activities are not entirely charitable, said organisation cannot be defined as a “charity"

is not entirely correct. As far as I am aware a charity must have charitable aims but can indulge in some non-charitable activity on which Vat will be payable less any allowable offsets. This has implications for the British Championships where I guess everything except the top section and possibly the major could be run by a charitable ECF and the top section(s) as a non charitable section. This might be what strong professionals would like to see and would also tie in with recent suggestions that mind games for elderly citizens can be beneficial as regards the veterans events.

Switching from trying to establish chess as a sport to establishing a charitable organisation is likely to be more fruitful and if combined with a layered membership fee, which has entry to the British as an option, might enable the ECF to not only avoid Vat on entries but also reclaim basic tax on these too. In addition I believe its still possible for higher rate tax payers to obtain a refund of the difference between higher and basic rate tax on subscriptions and any gifts they may be minded to make.

However options 1 and 2 for fees, in your funding paper do not seem to be a suitable model combined with a move to charitable status so may have to be regarded as temporary. It is wise to employ a Vat consultant as you mentioned, as the British Championship historical model seems to me to be a little confused.

[Andrew Farthing]

Para 48 of the Charity Commission's consultation paper states:

To be charitable, an organisation must demonstrate that it has aims that are exclusively charitable. If an organisation for the advancement of amateur sports or games also has an additional, non-charitable, aim then it is not a charity.

[Adam Raoof]

Para 48 of the Charity Commission's consultation paper states:

To be charitable, an organisation must demonstrate that it has aims that are exclusively charitable. If an organisation for the advancement of amateur sports or games also has an additional, non-charitable, aim then it is not a charity.

Chess in Schools and Communities is a charity (Charity Commission number 1133120). However they do have a commercial wing, Chess Promotions Ltd.

[E Michael White]

So the aims must be charitable but not necessarily all the events held.

[Andrew Farthing]

This has implications for the British Championships where I guess everything except the top section and possibly the major could be run by a charitable ECF and the top section(s) as a non charitable section. This might be what strong professionals would like to see and would also tie in with recent suggestions that mind games for elderly citizens can be beneficial as regards the veterans events.

Switching from trying to establish chess as a sport to establishing a charitable organisation is likely to be more fruitful and if combined with a layered membership fee, which has entry to the British as an option, might enable the ECF to not only avoid Vat on entries but also reclaim basic tax on these too. In addition I believe its still possible for higher rate tax payers to obtain a refund of the difference between higher and basic rate tax on subscriptions and any gifts they may be minded to make.

However options 1 and 2 for fees, in your funding paper do not seem to be a suitable model combined with a move to charitable status so may have to be regarded as temporary. It is wise to employ a Vat consultant as you mentioned, as the British Championship historical model seems to me to be a little confused.

I think that the case could be made that all except the top section of the British constituted the "advancement of amateur sport" and, therefore, charitable. There may be a pragmatic consideration, however, which is that the funding of the British as a whole may be easier to manage than the funding of the top section in isolation.

Regarding your comments on the potential impact of charitable status on the funding options currently under scrutiny, I tend to agree. The further guidance from the Charity Commission is not due until Autumn 2011, after which time would be needed to complete the necessary submissions and reorganise the Federation. I'm not confident that this could be completed before the new funding arrangements needed to be implemented.

The charitable status issue potentially has implications for the relative attractiveness of the funding options, because Gift Aid can be readily seen to be applicable to membership subscriptions, but I'm not convinced that it could be applied to Game Fee.

[Roger de Coverly]

This has implications for the British Championships where I guess everything except the top section and possibly the major could be run by a charitable ECF and the top section(s) as a non charitable section.

It's the curious hybrid of a Community Amateur Sports Club (CASC) which it appears can include Chess and Bridge.
http://www.hmrc.gov.uk/charities/

One very clear problem is that paid professionals are excluded. Although as you suggest that only really applies in the British Championships (and perhaps the Major Open if it followed the template of an open international) . When the British Championships are sponsored, the Championship proper can presumably break-even without requiring a subsidy from the rest of the event. It might still need to be run by an arms-length body. The problem returns if without sponsorship or legacies, the Championship has to be financed by players in the general Congress or by the ECF (in its CASC form) itself.

The international teams look to be a more major stumbling block. They represent the second highest call on the ECF's income after the office and quite obviously involves paying players if you want a decent team. In the absence of sponsorship, it's difficult to see how you can transfer funds raised in a CASC to a non charitable body to pay for international participation.

The issue of splitting the ECF has been around for some time. Indeed the row over the Chess Centre Limited seemed to be connected with having a "dummy" ECF for the professional players. I don't know that the issue of "who funds?" was ever resolved or even discussed in public.

[Andrew Farthing]

So the aims must be charitable but not necessarily all the events held.

Correct. The ECF's challenge is that its current aims (as set out in its "Objects") are clearly a mix of what would be defined as "charitable" and "non-charitable" aims. Running events is not a problem per se. In fact, it helps, because running events is a demonstration that the sport or game is being "advanced", i.e. made available.

Chess in Schools and Communities is a charity (Charity Commission number 1133120). However they do have a commercial wing, Chess Promotions Ltd

Charities are free to have trading subsidiaries which raise funds for the charity. Doubtless, this is what is happening in the case of CISC. The ECF's challenge is that it currently needs to raise funds for non-charitable aims, e.g. paying to send players to represent England in the Olympiad.

[Andrew Farthing]

The international teams look to be a more major stumbling block. They represent the second highest call on the ECF's income after the office and quite obviously involves paying players if you want a decent team. In the absence of sponsorship, it's difficult to see how you can transfer funds raised in a CASC to a non charitable body to pay for international participation.

The issue of splitting the ECF has been around for some time. Indeed the row over the Chess Centre Limited seemed to be connected with having a "dummy" ECF for the professional players. I don't know that the issue of "who funds?" was ever resolved or even discussed in public.

The ECF's current financial situation means that we would be crazy not to look seriously at this, particularly now that the Charity Commission has raised the issue itself (five years after the 2006 Charities Act opened the door on the amateur sport aspect).

Clearly, if the ECF were split in two, there would have to be separate funding arrangements for the non-charitable body. At first sight, the total amount needed would not be huge, but I wouldn't underestimate the challenges involved. The encouraging point is that charitable status for a large part of what the ECF currently does ought to mean in principle that the total amount of funding required from chess players would be lower to achieve the same effect from the organisation's point of view, so one would like to think that support would be forthcoming.

[Roger de Coverly]

The charitable status issue potentially has implications for the relative attractiveness of the funding options, because Gift Aid can be readily seen to be applicable to membership subscriptions, but I'm not convinced that it could be applied to Game Fee.

Could you though, make the entire entry fee to a Congress subject to Gift Aid?

Actually digging into this
http://www.hmrc.gov.uk/charities/gift_a ... script.htm

Membership subscriptions to Community Amateur Sports Clubs (CASCs) are specifically excluded by legislation from the Gift Aid scheme.

So it's only donations, not subs that count.

For Congresses it might work better then with a Game Fee structure. Provided it's legal, you set up a Congress association as a CASC ( that should be fine for essentially amateur events). You then structure entry fees as donations and claim Gift Aid. The ECF(CASC) or even ECF(professional) gets a cut by some form of event charge/tax/Game Fee.
Again it could be difficult to justify prize money under these conditions.

[E Michael White]

The ECF's challenge is that it currently needs to raise funds for non-charitable aims, e.g. paying to send players to represent England in the Olympiad.

I dont see this a much of an issue.

Set up a new junior ECFJ as a charity, leave the ECF as is. The JRT funds and other junior trusts would then be required by charity laws to direct their money to a new junior organisation with comparable aims for juniors ie. the new ECFJ. The PIF etc would still be available to the ECF. Make the ECF only open to professionals and aspiring amateurs and require the ECF to organise FIDE events and obtain sponsorship to raise money specifically for the England international arm. Junior internationals would come under a new ECFJ.

If there is a shortfall on funds for the Internationals they could be employed by the ECFJ to coach the junior squad and other ECF juniors at a market rate to raise some of their expenses. Club players also like simultaneous events which can be used for fund raising.

One thing is almost a certainty; this approach wouldnt raise any less money.

[Roger de Coverly]

Charities are free to have trading subsidiaries which raise funds for the charity. Doubtless, this is what is happening in the case of CISC.

Chess Promotions Limited was Malcolm's vehicle for the attempt to bring the 2012 world championship match to London. I'm not sure to what extent CISC would benefit, since the financing for a world championship is "Money raised" v "Prizes to players" + "Organisational Costs" + "Fide cut". Presumably though "Money raised" isn't coming through the charity.

[Roger de Coverly]

Set up a new junior ECFJ as a charity, leave the ECF as is.

Are you suggesting three organisations then - junior ECF (charity or CASC), amateur ECF ( CASC), "professional" ECF?


It would be nice to know, given this structure ,where the expenses of the permanent office would or should fall.