The Financial Future of the ECF – Q&A (continued)

Since my last post on this subject, the debates on the English Chess Forum have continued to expand.  I see it as a healthy sign of engagement in the issues that so many contributors to the forum have taken the time to ask questions or pass comment.

With just under a week to go until the Finance Council meeting, I thought that I’d try to pull together a summary of the main questions posed.

Q.  Under the Membership Scheme (option 1), who would be responsible for collecting the subscriptions?

A.  This is not set in stone.  One option would be for the approach applied in the existing Membership Organisations (MOs) to be rolled out nationally.  Here, the membership fees are collected through the MO (e.g. the County Association), which in turn collects them from its constituent clubs.  This might seem a little convoluted (and potentially complicated if a player represents more than one club), but in practice the MOs indicate that it works satisfactorily.

The other major option is for the ECF to collect the subscriptions from individuals direct.  To make this work, an online solution would seem almost essential, and we have been looking at a couple of promising options on this front.  I’m confident that something suitable could be implemented in time for the 2012-13 financial year.

If Council wishes to specify a particular approach to collection under Option 1, it could do so by proposing and passing a suitable amendment on the day.

The fact that new members are currently required to sign a form of guarantee is a barrier to a comprehensive online solution (it wouldn’t affect renewals).   This takes me to the next question…

Q.  Why do members have to sign a guarantee form?  Couldn’t this be abolished to allow for online enrolment as a new member?

A.  The ECF is a Company Limited by Guarantee.  Its Articles state that all “members” must provide a guarantee in the amount of £1 in order to be accepted as a member.  The guarantee form requires a physical signature.

This is not immutable.  It would be possible, for example, to redefine the term “member” to make it much more restrictive.  In other words, those currently classified as individual members could be redefined as something else (e.g. “subscribers” or “supporters”), and the term “member” could be restricted to a smaller number of organisations or Board members, who would be the only ones who had to provide the £1 guarantee.

This is something that is on my radar already, but if Council wanted to give a clear directive on this point, e.g. if it supported a membership scheme only on the proviso that the need for all individuals to sign a guarantee, then it would be free to pass an appropriate amendment to this effect.

Q.  Why can’t the ECF benefit from Gift Aid? 

A.  It would help tremendously if the ECF could take advantage of the Gift Aid scheme to obtain a contribution from HM Revenue & Customs for every membership paid (provided the members agreed).  This would mean that membership fees could be reduced without adversely affecting the ECF’s financial position.

To benefit from this, the ECF would need to be officially designated a charity or a CASC (Community Amateur Sports Club).  Currently, it is neither. 

The Charity Commission has recently launched a consultation paper called The advancement of amateur sport, which offers encouraging signs that the ECF might be able to obtain charitable status for some of its activities.  For once, chess is clearly accepted as a “mind sport”, which promotes health through “mental skill or exertion”.  This is not the issue.  The potential barrier is the requirement that the organisation should be devoted to furthering the cause of amateur sport, not the professional game.  There is some “grey” in the definitions here, but it seems clear that not everything the ECF does could be classified as “charitable”, and the rules are that if an organisation’s goals and activities are not entirely charitable, said organisation cannot be defined as a “charity”.

The Board and I, together with its legal adviser and other interested parties, are therefore looking into this matter with a view to: (a) responding to the consultation paper; and (b) proposing a potential reorganisation which would see the ECF split into two separate bodies, one charitable and one not.

This will not be straightforward (or guaranteed to meet the Charity Commissioner’s approval).  Moreover, it cannot be rushed.  The Charity Commission plans to publish guidance following the consultation in Autumn 2011, after which the ECF will be able to finalise and present its proposals.  This is not ideal for the timing of the AGM in October, nor does it offer the prospect of a definite solution to ease the ECF’s funding gap in time for the 2012-13 financial year.  Realistically, the ECF might have to tolerate a year on whatever basis Finance Council agrees on 16th April before any potential benefits from Gift Aid could be accessed. 

At this stage, I cannot be certain, but my best guess is that only membership subscriptions and donations would be eligible for Gift Aid.  Game Fee would, I suspect, be excluded.

Q.  If option 1 is implemented, what will happen to Direct Members whose memberships run past the start date for the new scheme? 

A.  This would be one of the details sorted out in the year allowed before implementation.  My intention is certainly that no Direct Member should be required to purchase memberships for overlapping periods.  Possibly, a rolling programme of part-year subscriptions (concluding in October 2012) would be the simplest solution.

Comments are closed.