Editorial: Public benefit by the book

The decision of the Office of the Scottish Charity Regulator to deny charitable status to Dundee FC in the Community was a good example of policing the boundaries, says Stephen Cook

Stephen Cook, editor
Stephen Cook, editor

Dundee FC in the Community spent the best part of a year recently trying to persuade the Office of the Scottish Charity Regulator to give it charitable status. The football club itself had been financing the youth and community wing, but said it was finding it increasingly difficult to do so. Charitable status was seen as the key to effective fundraising.

The correspondence between the club and the OSCR, which Third Sector obtained by using the Freedom of Information Act is a textbook example of firm and focused guardianship of charitable status. The OSCR used it as a case study in its annual review, but without giving the club's name or most of the telling detail about the application.

The club argued that the already existing community and youth wing was "not for profit and for public benefit", but the OSCR pointed out that not-for-profit activities are not necessarily for public benefit in the legal sense. It went on to tease out the fact that there was potential private benefit to the club and to individuals if youth players made it onto the payroll and the often lucrative transfer market. The club protested, but the application was turned down.

The bid for charitable status came in the context of mounting financial difficulties for the club, which went into administration at the end of last year. There will be many organisations feeling the squeeze in the coming months, and there will no doubt be occasions when some will consider seeking charitable status as a way of raising money more effectively and gaining tax relief.

Third Sector's Austerity Watch panel warned in January that fundraising was getting harder for many charities as universities and hospitals lost statutory funding and started competing for donations from the public. Existing and bona fide charities cannot be excluded from the contest, but let's hope that the UK's other two charity watchdogs are as rigorous as the OSCR in policing the boundaries and sticking to the letter of the public benefit requirement.

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