Recreation ground charities: common problems
Last year, the Charity Commission published updated guidance for charity trustees and local authorities to tackle some common issues affecting recreation ground charities.
Like many not-for-profit organisations, recreation ground charities often struggle with filling the boardroom with enough trustees, raising sufficient funds to maintain the site, and questions about whether and how they can use or dispose of their property. This article will summarise the key points in the guidance.
How to ensure your charity has enough trustees
Firstly, charities must ensure they have at least as many trustees as their governing document specifies. Three is a common minimum number, or the charity may have a corporate trustee (such as a local authority). Attracting trustees and volunteers can be difficult; often, charities can boost recruitment by engaging with services such as Reach Volunteering. Advertising in local or specialist press, notice boards and colleges can also be useful, as can approaching local organisations directly.
The Charity Commission recently updated its guidance on finding and appointing new trustees, which you can find here.
Tips for fundraising
Various trusts and foundations can be approached for grant funding as part of a wider fundraising campaign, and in particular, there may be charitable foundations in the community sports sector willing to fund capital projects.
Charities with ample recreational space can host fundraising events, bringing in funding from the wider community. Trustees should read the Charity Commission’s guidance on fundraising here.
Further, some of this space can be hired out (for example, to sports or community groups) if this is permitted under your governing document.
Provided it is allowed under the charity’s governing document, the trustees might opt to carry on commercial activities such as selling food, drinks, and other goods. The Charity Commission has published guidance on how charities may lawfully trade, which can be found here.
Letting others use the site
If any sports clubs seek to use the charity’s ground or part of it on a regular or permanent basis, this must not interfere with the charity’s purpose of providing the space for the benefit of local inhabitants. This is largely a question of degree – for example, how often the sports club has use of the site, who else can use and/or how much of the site is still available for public use.
Trustees must be satisfied that any short-term or temporary arrangements of this kind are in the charity’s best interests and ensure that a formal licence or hire agreement is in place to govern the arrangements.
Alternatively, if the sports club will be granted exclusive possession of part of the site under a lease, the trustees will need to comply with any requirements in its governing document as well as sections 117 to 123 of the Charities Act 2011 and be satisfied that the lease is in the best interests of the charity. It may also be necessary to apply for and obtain the Charity Commission’s prior authorisation. The Charity Commission has published guidance on how to dispose of charity land, which can be found here.
If the charity wishes to build a sports hall or pavilion on the site, the trustees must be satisfied that this would be in the best interests of the charity (bearing in mind who would get to use it and when) and would not interfere with its purpose. It would also be necessary to check whether the charity’s governing document specifies how the ground may be used or if any other restrictions may apply. For example, sometimes trustees will be prohibited from erecting any buildings on the land (or on specific parts of the land) or from using it for any purpose other than as an open space.
Designated land
If the charity’s recreational ground is ‘designated land’ – meaning it can only be used for a specific purpose(s) set out in the charity’s governing document – then specific additional requirements will apply to any proposed arrangement to hire out, grant a lease or sell the land (or any part of it).
Firstly, you might be able to appoint another charity or body as a corporate trustee which wishes to and can afford to upkeep the recreation grounds (as long as the corporate trustee’s purposes are wide enough to allow for that). Alternatively, your charity may be able to alter its purposes or specific restrictions on how the land is used.
Before proceeding with any proposal to grant a lease of or sell designated land, it may be necessary or appropriate to consult with the charity’s beneficiaries, to apply for and obtain the Charity Commission’s authorisation and to give public notice of the proposal.
King George Fields
The Charity Commission has also issued supplementary guidance for local authorities on dedications as a ‘King George’s Field’ made by local authorities in relation to recreational land they held as part of their own corporate property. This is because some local authorities have purported to create a charitable trust over their own without following the relevant procedures under legislation affecting local authorities.
This is a complex area, and we recommend that local authorities take legal advice if they have previously created, or sought to create, a ‘King George’s Field’.
If you have any questions about your recreation ground charity, please do not hesitate to contact Tom Seed on 0191 211 7907 or [email protected] or Chris Hook on 0191 211 7801 or [email protected].