Appropriate Structure
For any organisation looking to own or run a sports facility, it is important to have a robust structure with a written constitution and appropriate legal status to enable you take on the additional responsibilities and financial liabilities. This is not only to safeguard the organisation but also to give funders and other partner organisations confidence that they can invest time and money in the organisation.
You will also need to consider how your organisation will operate to ensure that you can maximise the benefit to the community and run the asset successfully in the future.
Listed below are some of the most common legal structures and type of organisation involved in running community sports facilities.
Registered Charity
A written governing document - the constitution - lays down the rules of the organisation. Registration is with the Charity Commission and annual returns must also be with the Charity Commission. Some funders insist that grant recipients must be registered charities as registration provides not only reassurance of a workable structure but also that the aims of the organisation are wholly charitable.
While a board of trustees has practical and legal responsibility for the organisation, financial liability can be reduced by purchasing trustee liability insurance.
Company Limited By Guarantee
Companies also require a governing document and are registered with Companies House and can face stiff financial penalties if annual returns are not submitted to Companies House on time. The advantage of a company limited by guarantee is that the financial liability of its directors and members is limited to a nominal sum such as £1. Currently, it is possible for an organisation to be both incorporated and registered as a charity (a charitable company) which gives the advantages of both types of organisation but also means double the administrative burden as registration is with both Companies House and the Charity Commission. Through the Charities Act 2006, there are plans to introduce a new type of organisation - the charitable incorporated organisation which will have a reduced administrative burden.
Social Enterprise
A social enterprise is a not for private profit business which trades like any other business would. There are two major differences, however, between a social enterprise and a profit-making business. The first is that all profits from a social enterprise go straight back into fulfilling the social aims of the enterprise (eg. providing sports facilities for people on low incomes). In a profit-making business, the profits are given to directors and shareholders. The second difference is that the enterprise is structured in such a way that service-users, members and the wider community can have a say in how it is run by being represented on the management committee.
The trading that a sports social enterprise could do includes paid coaching courses, renting out facilities, running a café etc. This type of trading might not be permissible under an existing registered charity constitution. A social enterprise does not have the legal constraints of a charity or charitable company and may find it more difficult to prove the credibility that charity registration brings to funders and partners.
Development Trusts
Development trusts are community owned and led they use self-help, trading for social purpose, and ownership of buildings and land, to bring about long-term social, economic and environmental benefits in their community.
They operate in both urban and rural areas, often in neighbourhoods which have experienced the worst economic decline. They are independent, but work with the public sector, private businesses, and other community groups.
They are community ‘anchor’ organisations, delivering services and facilities, finding solutions to local problems, and helping other organisations and initiatives succeed.
Community Amateur Sports Clubs
Sports clubs which do not wish to register as a charity and thus miss out on the tax breaks available to charities do have another option. They could apply to be community amateur sports clubs. To qualify as a CASC, the club must have, as its main purpose the provision of facilities and the promotion of one of 113 eligible sports. It must be open to anyone – without discrimination, intentional or otherwise – and it must be amateur which means that players cannot be paid a wage and all profits from the club go to a charitable purpose.
We have the correct organisational structure
We do not have the correct organisational structure
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