The Office of the Scottish Charity Regulator refused to grant charitable status to a group linked to Dundee Football Club on the grounds that one of its main aims was to benefit the football club financially, documents released under the Freedom of Information Act reveal.
The refusal was mentioned in the OSCR's annual review in October, without full details or the name of the club. The regulator refused to give the name or further details until Third Sector made a request under the act.
The Dundee FC in the Community Association, which provides football coaching for young people, applied for charitable status in 2009. Its application said its charitable purposes were to advance health, citizenship and public participation in sport.
But the OSCR refused to register the organisation, ruling that a primary motive in setting up the charity was to allow the club to save money on running youth teams. The application said funds raised by the charity would "be used to offset the net cost of youth development incurred directly by the club".
The OSCR said another function of the group could be providing private benefit to the football club by training players who were under exclusive contract to the club and could be sold to other teams.
The regulator also said the group did not provide a public benefit because participation in its youth teams was subject to a contract with Dundee FC. It said the public benefit was further restricted because participation in the youth teams was based on ability and was only available to male players.
Correspondence between the OSCR and the Dundee FC in the Community Association shows that, after the OSCR raised questions about the group's private benefit, a club representative – whose name has been blacked out – replied: "I understand that there are other bodies that have been granted charitable status by OSCR where there is a minor element of private benefit. OSCR are, therefore, mindful of proportionality and that is the point I now wish you to consider."
The representative said that about 17 young people from the youth teams were hired by the football club every year.
The OSCR acknowledged that some of the group's community activities might provide public benefit, but said that its youth development work did not.
It refused to grant charitable status to the group in February 2010. The group appealed, but in March the OSCR upheld its original decision.
Nobody at Dundee FC in the Community Association was available for comment.