VIEW issue 4 2012:VIEW issue 4 2012 29/04/2012 16:54 Page 9


VIEW, Issue four, 2012


Website: viewdigital.org


Page 9


Jonathan McAlpin, Director of Operations at UCIT (left) with Jenny Ebbage, Partner at Edwards & Co. Solicitors, David Abrahams, Vice President of SME & Charities Team at Marsh Ltd, and Rosemary Peters-Gallagher, Partner at Moore Stephens


But as the UK officially goes back into recession, charities facing a big drop in donations and an in- creased demand for their services are thinking more about trading opportunities in order to gen- erate cash.


Charities should watch out for the pitfalls is the advice from leading charity lawyer, Jenny Ebbage, Partner at Edwards and Company Solicitors, who organised a seminar on charities and trading issues at the new MAC building in Belfast. “The dangers of drifting into trading without


Why proper planning is vital M


ary Portas revamping charity shops for a television series is the closest most peo- ple come to seeing charity and com- merce collide.


By Una Murphy


proper planning is my main message,” she said. Charities have to be very careful as they can only


carry out trading activities in limited circum- stances. Also the charity’s governance structure needs to be analysed, and if there is any risk to the charity you need to go back to the drawing board.” She said that charities were operating in a chal-


lenging environment and there were traps for the unwary – with complex tax issues and complex legal issues as well. The articles of the trading subsidiary should be crafted to put in place safeguards to protect the charity and it was important to have a largely sepa- rate board from the charities’ trustees running the subsidiary – with people with commercial acumen and useful links in the business community asked to join. It was important to have a distance be- tween the two boards and hold separate meetings. It was not generally a good idea for the chairper- son of the charity’s trustees to take on a similar role in the trading subsidiary – as there could be a problem with too much dominance by one person, Ms Ebbage said.


sidiary was to remove risks from the charity and to make money for the charity, so the charity must be


FC United’s success story used


to promote community shares ONE of the last decade’s most high-profile sports stories was used re- cently to illustrate the concept of ‘community shares’ to local commu- nity and voluntary groups.


the breakaway football club was used to inform the event on how a community successfully reacted to a large corporate initiative they felt was harmful.


FC United of Manchester (FCUM) Chief Executive Andy Walsh was the guest speaker at a Belfast event on Friday, April 20, organised by the Building Change Trust and the Northern Ireland Co-operative Forum. In a well documented battle, FC United of Manchester was born in the wake of the Glazier family’s takeover of Manchester United in 2005, with the goal of maintaining the integrity and spirit of the club. Hosted at the Grove Wellbeing Centre in north Belfast, the case of


now boasts over 2,500 members and two community share issues have netted almost £3 million to buy land for a new stadium and improve general facilities for players and spectators. Building Change Trust Administrator, Nigel McKinney, said, “Commu- nity shares are one way of getting revenue into community initiatives and encouraging community ownership of local interests and assets. With reductions in funding from local government sources, the concept of community shares will become much more prevalent in the future. “This seminar help explained how community shares work and the Building Change Trust and the NI Co-operative Forum will offer practi- cal examples of how this can be applied in Northern Ireland.”


Organised as a Community Benefit Society, FC United of Manchester The rationale behind setting up the trading sub-


careful not to prop up a failing trading subsidiary, she said. Senior representatives from large charities were among the invited audience who attended the ‘In Focus’ seminar. There was laughter from the audience when an- other speaker at the seminar, accountant Rose- mary Peters-Gallagher OBE, from Moore Stephens, described VAT as “a nasty wee tax”. “VAT is the tax that causes most grief not just


for charities but for a lot of organisations” she said. Jonathan McAlpin, of the Ulster Community In-


vestment Trust (UCIT), said that the government’s ‘Big Society’ philosophy had pushed more public contracts into the charitable sector. UCIT finances social enterprise – “more than profit describes this sector better than not for profit”, he said. Insurance expert, David Abrahams of Marsh Ltd, said that when setting up a trading entity, charities needed to think about the risks, including those as- sociated with collaborating on joint ventures.


Jo Bird, Co-operative Business Consultants, with Mark Langhammer, Giants Park Stadium Initiative, Andy Walsh, FC United of Manchester and Bill Osbourne, chair of the Building Change Trust


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