Football clubs and their club community organisations: separation is key

The fundamentals of a charity

At its core, a charity must be established for certain charitable purposes which are for the public benefit. It must not pursue any non-charitable purpose. For CCOs, their charitable purposes may include the advancement of health, education, arts, culture, heritage, community development and/or amateur sport, as well as the promotion of racial harmony or equality and diversity.

The public benefit of that purpose is usually satisfied by the CCO focusing on the club’s local community.

The relationship between the CCO and its associated club

It is well recognised that a charity’s association with a non-charity can be beneficial to the charity and assist it to meet its charitable aims – indeed, a CCO’s continued relationship with its associated club may be vital to its continued existence.

For CCOs, this will often come in the form of financial support from its associated club, but it may also include access to shared resources (such as HR, maintenance and payroll staff) and office space at the stadium/training ground, as well as the benefits of simply being linked to the club and therefore the ability to harness the power of its name, fan base and commercial appeal.

Pushing the boundaries – the interplay between a CCO’s charitable aims and its dependence on the associated club

Dependence on the associated club invites risks which could threaten the fundamental requirements of the CCO, as a charity. In particular:

1. It increases the risk of the CCO serving purposes which are not charitable. This may happen without conscious thought. For example, if the CCO and club share the same office space, it could be something as seemingly innocuous as the sharing of resources. While it is permissible for the club to assist the CCO, the CCO’s staff should not spend time on work for the club. Equally, if the CCO is paying the club to use the office space, or to utilise the club’s equipment or staff, it should ensure it is getting value for money.
2. It may threaten the CCO’s independence. This could happen in a number of ways, although a primary example would be where the CCO acts on the instructions of, or is inappropriately influenced by, the shareholders and/or directors of the club on the charity’s projects and activities. Given the marked shift towards greater recognition of, and responsibility for, equality, diversity and inclusion and tackling climate change, it is easy to see why the club may wish to have a say in how the CCO spends its time and money – particularly when a CCO is often viewed as a club’s ‘corporate social responsibility’ arm. This tension is exacerbated by the fact that the club will almost certainly have created the CCO itself and its assistance may be crucial to the CCO’s continued ability to perform its charitable aims (hence why its owners/directors may feel that they should be able to influence how the CCO carries on its business). Once a CCO has been set up, it must act independently of the club.
3. The CCO’s identity may become blurred with the club’s. In some ways, merging the two would be of benefit to the CCO – for example, it may receive more donations from fans of the club. However, it is also important for the CCO to be able to shield itself from any negative publicity which the club may attract from time to time – a unified public image may not always be in the interests of the charity. Striking the right balance is a difficult but important issue for the trustees to determine.

Sanctions for non-compliance

The Charity Commission regulates charities to ensure they are complying with the law and, ultimately, operating for the sole purpose of furthering their charitable purposes for the public benefit.

The Commission has wide-ranging powers to ensure compliance. In serious cases, the Commission may open a statutory enquiry into the charity and, if necessary, remove trustees or other officers/employees from the charity and/or dictate that they act in a certain way. The Commission may also disqualify individuals from acting as trustees for other charities.

Enquiries and outcomes are generally published and therefore, particularly in a high-profile sector like football, likely to attract negative press and criticism (for both the club and the CCO).

Defining the boundaries is key

For the reasons above, it is in both parties’ interests to ensure the independence of the CCO. While the CCO can properly rely on the funding, support and status of their associated club, it is vital that both parties understand the boundaries of their arrangement.

The strongest and most proactive step clubs and CCOs can take is to enter into a formal agreement setting out the terms of their relationship (or, if they already have one in place, review their existing terms to ensure the agreement deals with all aspects of their relationship with certainty).

Some key points to consider:

• What arrangements are in place to ensure the CCO can act independently, e.g., does the CCO have veto rights on matters the parties have agreed to collaborate on?
• In what circumstances can the CCO terminate the relationship between the parties?
• How are disputes between the CCO and the club dealt with?
• Are club representatives to be appointed as trustees of the CCO? If so, for how long?
• Does the CCO have to consult the club before it makes external communications?
• On what terms or conditions does the CCO have access to club staff, premises, equipment etc.?

How we can help clubs and their CCOs

The Sports Team can help draft and negotiate agreements between clubs and their CCOs. Contact Christian or India to find out more.