British Dressage’s (BD) new charitable status, which was announced last month, is likely to bring the organisation an extra £100,000 a year. However, it has raised questions over how it will benefit members and whether other equestrian bodies will follow suit.
The financial gain from the change is created from tax exemptions and because Gift Aid can be applied to membership fees and sponsorship deals. Gift Aid allows a charity to take your donation — money you’ve already paid tax on — and reclaim the basic rate tax from HM Revenue & Customs. It is thought that all membership fees will now be counted as “donations” to BD which means that for every £10 paid the donation is worth £12.50 to the charity.
BD has said that it will use this new status to “directly benefit our sport”, but declined to confirm whether this monetary gain would affect the price of membership or entry fees.
Pammy Hutton said in her H&H comment last week (6 February) that she hoped BD “passes on some of its new-found cash in prize-money to cover hard-pressed competitors’ entry fees”.
Professional vs amateur
There was some surprise from the equestrian world that BD had been granted the status, as it is only open to sporting organisations that are involved in “the advancement of amateur sport”, rather than professional sport.
“Any organisation considering charitable registration must ensure its activities are exclusively charitable and for the public benefit,” said Rachel Gwynne, senior associate at Wright Hassall, which helped BD through the process of gaining charitable status.
“Sporting bodies that are concerned with professional or elite sport may encounter difficulties in meeting the public benefit test.”
Another option for organisations is to separate their professional operations into another business to run alongside the “charitable aspects”.
In order to achieve the status, BD had to establish a sister company, British Dressage Trading Limited, for the commercial aspects of the organisation, such as selling merchandise and advertisements on its website.
Given the financial benefit it is perhaps not surprising that the other equestrian bodies are looking at trying to follow suit.
British Eventing (BE) confirmed at its AGM in December that it “is in the early stages of building a charitable foundation”.
BE finance director Wendy McGowanour told H&H that its application is for “a separate entity”. She said BE “will release more [information] when they have an indication from the Charity Commission on BE’s application”.
British Showjumping (BS) initially started looking into the idea in 2011, before the Olympics. However, the new board has now again agreed it as “a way forward in principal”.
“An initial scoping report has already been written and it made sense that we let BD continue with their application first and see what lessons could be learnt from their experiences, before proceeding ourselves,” said a BS spokesman.
This article was first published in Horse & Hound magazine (13 February 2014)