The Olympic torch - and sports charities

20 September 2012

Post Olympic fever will no doubt fuel an increase in new sports clubs - but should they register as charities? Darren Hooker explains the legal implications

The end of the Paralympics has brought the curtain down on what has been a remarkable summer of sport in the UK. The hope is of course that, as the Olympic torch is passed to Rio, a legacy is left behind, inspiring a younger generation to pursue sport and providing them with the facilities to be able to do so.

Many local sports groups will experience a swell of interest from future gold medal winners and amateur enthusiasts alike and we will likely see an increase in the number of sports clubs over the coming months and years. As these organisations grow, a question that their founders should consider is whether they should register their club as a charity. Many sports clubs may not in fact realise they are eligible to register as a charity or may not understand the requirements for registration. 

Charity Commission consultation on amateur sport

In 2011, the Charity Commission began a review of its guidance on the advancement of amateur sport and conducted a public consultation. This author contributed to that consultation as part of a working party for the Charity Law Association (CLA). Unfortunately, but quite understandably, the review on amateur sport was put on hold and the revised guidance has not yet been published. However, the timing now seems right for the Charity Commission to turn its attention to finishing the review and publishing clear guidance that enables sports groups to consider whether they are eligible, and wish, to register as charities.
In anticipation of the revised guidance being published, this article will recap the points raised in the consultation to give sports clubs an understanding of the requirements for charitable registration and an idea of what to expect from the revised guidance.

What is a sport? 

The charitable purpose for which most sports charities will be established is ‘the advancement of amateur sport. ‘Sport’ is defined in the Charities Act 2011 as meaning sports or games which promote health by involving physical or mental skill or exertion’.
The first question which the Charity Commission consulted on is what constitutes a ‘sport or game’ for this purpose? The Charity Commission suggested in the consultation that it may be helpful to define a sport or game as having a body of rules or code of playing.
Whilst I welcome the Charity Commission attempting to provide clarity as to what constitutes a game or sport, I would not wish to see a new definition, or further redefinition, introduced. For one, there are a number of games, sports or pursuits that do not have a body of rules and would not fulfil this requirement, such as yoga or jogging. The broader concern though is that it may not be helpful to introduce a new definition of sport when there are already workable definitions in use. For example, the CLA working party noted that the Sports Council makes use of the definition from the European Sports Charter 1993 and maintains a list of sports that it recognises. This list is used by HMRC is administering community amateur sports clubs. Rather than create a new definition, it would seem to be more helpful for the Charity Commission to align with other bodies, such as the Sports Council, in its definition of sport.  

Does it promote health by physical or mental skill or exertion?

The second question the Charity Commission consulted upon, and the one which all sports groups will have to answer in their registration application, is whether the sport or game promotes health by involving physical or mental skill or exertion. This is a very interesting question to consider and potentially one which the Charity Commission will find it difficult to decide upon. Clearly, active sports such as football or squash involve physical exertion which promotes health. After much consideration, the Charity Commission has also accepted that certain games, such as bridge, promote mental health. The difficult question though comes when you consider games where the mental health benefits are not supported by substantial research. It will be interesting to see whether the Charity Commission will accept, for example, that bingo or Sudoku promote mental health. Will the Charity Commission also accept that a lower level of exertion or skill is required to promote the health of a certain group? For example, could a Sudoku club for people with learning disabilities be charitable on the basis that it promoted its users mental health even if it could not be shown to promote the mental health of the average adult?
The question of whether a particular game or sport promotes health is a difficult one to answer and the Charity Commission will clearly not be able to provide a definitive answer for all games or sports in its revised guidance. It would though be helpful to see the Charity Commission produce a list of the games or sports that it accepts do promote health and an indication of the evidence it would need to see to accept further additions to that list so that sports clubs can assess whether they can meet this requirement. 

What is an ‘amateur’ sport?

Of course a key part of advancing amateur sport is that the sport must be ‘amateur’. The Charity Commission’s consultation highlights the difficulty in defining ‘amateur’ by asking respondents to consider the similarities between a future Olympian in receipt of full-time grant funding and a professional athlete who is paid to participate.
Whilst this is an interesting distinction to consider, one hopes that the Charity Commission will not become too concerned with trying to define an amateur sportsperson. Instead, it would be helpful for the Charity Commission to state that an element of payment, or support, to particular players, or other form of private benefit, will not prevent the club being considered ‘amateur’ provided that it contributes to the purpose of the charity and is at an appropriate level. 

Sporting success and elite teams

A further question on which it is hoped that the Charity Commission will provide guidance is whether it would be possible for an organisation, which only allowed players of a certain standard to participate, to be registered as a charity for the advancement of amateur sport. Certainly, such an organisation would have to prove that there were no unreasonable restrictions on the opportunity to benefit, such as unreasonable ticket prices for spectators. Could it though argue that it provided sufficient public benefit by encouraging the public to take up the sport? It will be interesting to see where the Charity Commission draws the distinction between a sports team that provides sufficient public benefit and one that does not, and no doubt this will be key for existing and new sports clubs considering charitable registration.
These are just some of the issues that the Charity Commission consulted upon and which the revised guidance will address. Although the Charity Commission may not agree or follow all, or indeed any, of the suggestions made in this article, the revised guidance should provide clarity to sports clubs considering registration. The hope is then that those sports clubs can focus their attention on ensuring that there are many more great summers of sport to come.


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Darren Hooker
Darren Hooker is a solicitor in the charity and education team at the law firm Stone King LLP
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