ECF Finance Council Meeting April 2017

Debate directly related to English Chess Federation matters.
David Sedgwick
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Re: ECF Finance Council Meeting April 2017

Post by David Sedgwick » Mon Apr 17, 2017 11:10 pm

Peter Turner wrote:I was about to reply when I saw the comment above from Angus French. My understanding was that apart from something in the region of £10,000 a year supporting the British Championships (and I think there are some conditions to this relating to junior chess) any other expenditure was on income received. The capital to remain intact.
My understanding - and I may be wrong - is that that is a policy decision by the Trustees.

If so, the Trustees could vary it if they so resolved. Moreover, they should in my opinion consider doing that if the BCF Council were so to request.

David Sedgwick
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Re: ECF Finance Council Meeting April 2017

Post by David Sedgwick » Mon Apr 17, 2017 11:19 pm

David Sedgwick wrote:Whilst the Trustees have a duty to act independently, they report to the BCF Council. It seems to me that this is a matter which might properly be raised at the BCF Council Meeting preceding the ECF Council Meeting.

If no mutually acceptable resolution can be found, it may be appropriate for someone to submit a motion to a future BCF Council Meeting.
It is sometimes sensible to check the facts before you post.

Having belatedly done so, I have discovered that the agenda at http://www.englishchess.org.uk/wp-conte ... Agenda.pdf contains the following:

"To consider the following motion: "The British Chess Federation Council recommends to the Trustees of the John Robinson Youth Trust that:

(a) The Trustees give due consideration to requests for funding for junior chess made by the English Chess Federation; and

(b) When determining whether such requests should be accepted, they are prepared to make payments by way of grant out of the capital of the Trust Fund and do not limit the acceptance of such requests to such amounts as can be funded out of the income received by the Trust Fund."

Neill Cooper
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Re: ECF Finance Council Meeting April 2017

Post by Neill Cooper » Mon Apr 17, 2017 11:52 pm

David Sedgwick wrote:"To consider the following motion: "The British Chess Federation Council recommends to the Trustees of the John Robinson Youth Trust that:

(a) The Trustees give due consideration to requests for funding for junior chess made by the English Chess Federation; and

(b) When determining whether such requests should be accepted, they are prepared to make payments by way of grant out of the capital of the Trust Fund and do not limit the acceptance of such requests to such amounts as can be funded out of the income received by the Trust Fund."
My recollection is that the original reason that only income was to be used related to avoiding inheritance tax on the capital. I assume the tax situation of paying out of the capital has been checked.

Roger de Coverly
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Re: ECF Finance Council Meeting April 2017

Post by Roger de Coverly » Tue Apr 18, 2017 12:05 am

Neill Cooper wrote: My recollection is that the original reason that only income was to be used related to avoiding inheritance tax on the capital. I assume the tax situation of paying out of the capital has been checked.
Once a charity is set up and running, the issues of inheritance tax should be resolved. The ECF should have enough GMs in accountancy and legal issues at its possible disposal that any old wives tales should be dispelled.

I don't think it matters for taxation whether a charity is set up in perpetuity or to self destruct over a relatively limited period.

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Michael Farthing
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Re: ECF Finance Council Meeting April 2017

Post by Michael Farthing » Tue Apr 18, 2017 6:51 am

As I understand it a major reason for the JRYT trustees position is consideration of the benefactor's wishes. How disgraceful!

Mick Norris
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Re: ECF Finance Council Meeting April 2017

Post by Mick Norris » Tue Apr 18, 2017 9:09 am

Roger de Coverly wrote:
Mick Norris wrote:Is there a copy of the JRYT deed available?
Predating the JRYT deed, here's the background as recorded by Richard Haddrell.

http://www.sccu-chess.com/archive/0506/bcf.htm
BCF EXTRAORDINARY COUNCIL MEETING
in London, Saturday 24th June 2006 at 1 pm. About 28 attended.
The BCF has remained in existence largely for financial reasons and will rarely, we imagine, have need for a General meeting between AGMs. This one arose from a bequest to the Federation from the late John Robinson. It is substantial - around �650,000 - and represents the bulk of John's estate. He was a bachelor and died without issue. Inheritance tax on such a sum would cost the Federation something like �300,000. But apparently it is possible to vary the terms of the will so that the biggest part of the bequest goes into a charitable trust, avoiding liability to inheritance tax. Setting up such a trust requires a resolution of Council.
The proposed John Robinson Trust would receive about �520,000 while �130,000 would go to the BCF itself. But the charitable trust has to be a Junior one. John's expressed wish is that his bequest will provide �10,000 annually to support the British Championships. There is a considerable youth element in the Championships which can properly be supported by a junior trust, and the two sources together could achieve the �10,000.
We said, when we saw the papers of the meeting, that we had no doubt the setting up of the Trust would go through on the nod. The grapevine wasn't so sure. It seems there was opposition to a scheme which would benefit mostly juniors when there were other ways of doing it. We have no information on the other ways. In the event one Director did express reservations along those lines at the meeting, but the proposals all went through with the odd abstention here and there but, we think, no votes against.
The Trustees will be Gerry Walsh, David Welch, Cynthia Gurney and David Anderton.
rjh 1.7.06
Interesting, but not relevant; we need to see the Deed and the actual wording
Any postings on here represent my personal views

Chris Fegan
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Re: ECF Finance Council Meeting April 2017

Post by Chris Fegan » Tue Apr 18, 2017 9:55 am

Mick Norris wrote:
Roger de Coverly wrote:
Mick Norris wrote:Is there a copy of the JRYT deed available?
Predating the JRYT deed, here's the background as recorded by Richard Haddrell.

http://www.sccu-chess.com/archive/0506/bcf.htm
BCF EXTRAORDINARY COUNCIL MEETING
in London, Saturday 24th June 2006 at 1 pm. About 28 attended.
The BCF has remained in existence largely for financial reasons and will rarely, we imagine, have need for a General meeting between AGMs. This one arose from a bequest to the Federation from the late John Robinson. It is substantial - around �650,000 - and represents the bulk of John's estate. He was a bachelor and died without issue. Inheritance tax on such a sum would cost the Federation something like �300,000. But apparently it is possible to vary the terms of the will so that the biggest part of the bequest goes into a charitable trust, avoiding liability to inheritance tax. Setting up such a trust requires a resolution of Council.
The proposed John Robinson Trust would receive about �520,000 while �130,000 would go to the BCF itself. But the charitable trust has to be a Junior one. John's expressed wish is that his bequest will provide �10,000 annually to support the British Championships. There is a considerable youth element in the Championships which can properly be supported by a junior trust, and the two sources together could achieve the �10,000.
We said, when we saw the papers of the meeting, that we had no doubt the setting up of the Trust would go through on the nod. The grapevine wasn't so sure. It seems there was opposition to a scheme which would benefit mostly juniors when there were other ways of doing it. We have no information on the other ways. In the event one Director did express reservations along those lines at the meeting, but the proposals all went through with the odd abstention here and there but, we think, no votes against.
The Trustees will be Gerry Walsh, David Welch, Cynthia Gurney and David Anderton.
rjh 1.7.06
Interesting, but not relevant; we need to see the Deed and the actual wording
Mick

What the ECF urgently needs to see is a new Director of Finance.

Chris

Roger de Coverly
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Re: ECF Finance Council Meeting April 2017

Post by Roger de Coverly » Tue Apr 18, 2017 10:00 am

Mick Norris wrote: Interesting, but not relevant; we need to see the Deed and the actual wording
Google throws up a number of instances where the JRT has been discussed on this forum. None of them disclose what the Deed actually says.

If there are not in fact any legal constraints over whether the capital of the Trust can be spent, it could come to a fight between the BCF Council and the Trustees. In this context, the BCF Council can remove Trustees subject to a 75% vote in favour. This statement is made in each year's Report and Accounts for the JRT.

Mick Norris
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Re: ECF Finance Council Meeting April 2017

Post by Mick Norris » Tue Apr 18, 2017 10:03 am

Yes, I used to work for a law firm; if the ECF wants me to look at the Deed, they know where I am, although presumably they have asked a suitably qualified legal professional to look at it
Any postings on here represent my personal views

Roger de Coverly
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Re: ECF Finance Council Meeting April 2017

Post by Roger de Coverly » Tue Apr 18, 2017 10:11 am

Michael Farthing wrote:As I understand it a major reason for the JRYT trustees position is consideration of the benefactor's wishes.
My understanding, which might be incorrect, is that the legacy was for the BCF to use as it pleased, subject to an annual grant of £ 10,000 to help finance the British Championships.

LawrenceCooper
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Re: ECF Finance Council Meeting April 2017

Post by LawrenceCooper » Tue Apr 18, 2017 11:50 am

Roger de Coverly wrote:
Michael Farthing wrote:As I understand it a major reason for the JRYT trustees position is consideration of the benefactor's wishes.
My understanding, which might be incorrect, is that the legacy was for the BCF to use as it pleased, subject to an annual grant of £ 10,000 to help finance the British Championships.
I don't think that's correct. I think it's to spend only the interest each year unless a very good case can be made for doing otherwise. That may not be legally binding but is certainly the spirit in which the trustees were operating during my time as International and Junior Director.

Roger de Coverly
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Re: ECF Finance Council Meeting April 2017

Post by Roger de Coverly » Tue Apr 18, 2017 12:18 pm

LawrenceCooper wrote: I think it's to spend only the interest each year unless a very good case can be made for doing otherwise.
That's certainly how it's being operated. What I am querying is whether that can be inferred from the original will and the wishes of John when he was alive, or whether it's an invention of the ECF when they set up the Trust.

NickFaulks
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Re: ECF Finance Council Meeting April 2017

Post by NickFaulks » Tue Apr 18, 2017 12:31 pm

LawrenceCooper wrote: I think it's to spend only the interest each year unless a very good case can be made for doing otherwise.
That seems to be what almost everybody thinks. The problem is that the bequest was made at a time when it was possible to earn an income on low risk invesments, so spending only income was a reasonable concept. Since the financial crisis, which the authorities used as an excuse to deploy measures aimed at the destruction of small savers, that is no longer the case, and spending only income means in practice spending nothing at all.

It is arguable, though obviously unknowable, that the donor would have accepted a modest adjustment of his professed wishes in the new circumstances.
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John Reyes
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Re: ECF Finance Council Meeting April 2017

Post by John Reyes » Tue Apr 18, 2017 12:41 pm

Michael Farthing wrote:Chris,

Your views are strongly held and no one can doubt that. However, the stridency with which they are presented does not, I believe, help your case.

While I wish to see changes in Council (and not just in terms of direct member representation) I prefer a more evolutionary approach. The responses we receive from silver members suggest that they share this view (decidedly, I might add) which leaves me in the happy position of being able to vote the way I have been instructed with the satisfaction that at the same time I am voting for what I believe to be best.

I am concerned that the real fear for the future of the ECF that some of these proposals has raised may leave us at the end with no change at all and the frankly insulting situation of a continuing token sop to direct members.

I 100 Agree with Michael here.

I also feel that the More votes you have, the bigger you say, just look at Ben and what he has done, he know what the people wanted him to vote and he does, but at the same time, I also see people who just bugger off and did not stay for the votes and went to watch a Rugby match instead of listin to the elections.
Any postings on here represent my personal views only and also Dyslexia as well

Roger de Coverly
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Re: ECF Finance Council Meeting April 2017

Post by Roger de Coverly » Tue Apr 18, 2017 12:47 pm

NickFaulks wrote: spending only income means in practice spending nothing at all.
It is or was mostly in corporate bonds and higher yield funds, so it placed itself at the riskier end of income seeking. In that sense, the Trustees and their investment advisers have done what they can to maximise annual payouts.

It's a problem that was touched on last year. To what extent, if at all, should the ECF rely on a regular flow of legacies? If it can, it could budget on the basis of spending a legacy over a span of years and set up trust funds to permit this.

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