The Rangers Charity Foundation – Two Questions for the Trustees re Legends v Glorie

According to the Rangers website, the charity match between Rangers Legends and AC Milan Glorie raised £280,000 for the club, with £170,000 going to the two charitable organisations, namely the Rangers Charity Foundation and AC Milan’s Charity.

I have written about the game previously here, here and here (with a link in this piece to Scotzine).

STV reported on 6th March that the game had:-

“originally been organised to raise funds for the Rangers Charity Foundation, which was going to receive 60% of all money gathered by the game on March 30. The charity, which has donated more than £2.3m to various causes since it was set up in 2002, has reduced the amount it will take from the game to 10%, meaning the majority of the money raised will go to the club, which is currently in administration.”

As I said in each of the pieces above, the work of the Rangers Charity Foundation is much to be admired, and one hopes it continues, no matter what happens to Rangers. Despite what some doom-mongers have said, as the RCF is a separate entity from the football club, it is possible for the charity to continue, even if the football team ceased. As one of my friends pointed out to me, the Earl Haig Fund continued for many years after the noble lord passed away, and indeed still continues under another title.

However, it was my understanding from the above STV piece, and other information I read, much of that from the rangers.co.uk website, that the RCF was originally due 60% of the revenues from the game and had reduced this to 10%. Therefore, as 10%+40%=50%, one might expect that the total payment to charity would equal the share taken by Rangers. However, £280,000 does not equal £170,000.

If the proportions described above are correct, in terms of the distribution inter charities, then the Milan charity will have received £136,000 and the RCF £34,000. However, 40% of the total revenue of £450,000 = £180,000. 60% of the total = £270,000.

From the figures produced therefore, it would appear that the RCF has given up income of £236,000 to assist a commercial organisation, whilst even Milan has received less than the share expected originally.

Of course the unique circumstances Rangers are in meant, no doubt, that the crowd for the game of 47,000 was higher than it would otherwise have been, but still there seems to be a huge disparity in the figures. The fans who turned out should also be commended for their support both of the club at these trying times, and of the charitable purpose of the game.

I am sure however that the appropriate agreements were reached with the responsible officers of at least one of the charities. I would not expect D&P to have underpaid the charities.

Bearing in mind the problems for a charity related to Plymouth Argyle, referred to in my Scotzine piece linked above caused by it lending the club money, it is clear that the charity regulators are conscious that charity funds, or funds intended for charitable purposes, can be used inappropriately.

That is NOT to say that funds have been used inappropriately here. That is a matter for the Office of the Scottish Charity Regulator to attend to, presumably as part of its ongoing investigation.

One would expect a major organisation like Rangers, even in administration, to have taken suitable advice to endure that it was complying with the law, especially as the issue was flagged up well in advance. As I mentioned in my previous pieces, there is no suggestion that tickets were sold for what was to be a charity match and then, after the sales, the nature of the game changed. The “duping” of the fans buying the tickets is not the issue however.

The Duff & Phelps receipts and payments account states that the costs paid out from 14th February until 30th March (the date of the game) were £6,634.

The VAT received on the ticket sales is presumably included in the £203,748 of VAT payable recorded in the D&P figures. Tickets were sold for the price of £12, which would have been the original £10 VAT exempt fee plus £2 VAT. Therefore the VAT received would have been around £90,000.

So, what have we got, at the end of the day?

The RCF benefits to the tune of £34,000. The AC Milan Charity Foundation benefits to the tune of £136,000.

£170,000 going to charity is always a good thing.

However, the question for the OSCR is whether the Rangers Charity Foundation has acted appropriately.

As far as D&P running the game and making a donation from the receipts, their powers as administrators would permit such an act, as the net effect for the club is financially positive.

So we come back to the RCF.

The issue, over and above the match itself, is one of governance of the charity.

The Trustees, who have legal responsibility for running the charity, and personal legal liability, both financially and under the criminal law, are Craig Whyte, Martin Bain, John Greig and Jacqueline Gourlay.

Bearing in mind the issues between three of the Trustees, one wonders when they last met.

How did the Trustees decide to change the nature of the charity match, which presumably was governed by some form of contract with Rangers?

Is it the case that the Trustees have not met, and therefore the management of the Charity has been left to staff? If so, then they are to be commended for keeping the organisation going, but the legal responsibility rests on the Trustees, and cannot be delegated. (Or at least the Trustees cannot evade their responsibilities by passing them to paid staff).

Mr Whyte is Chairman of the Trustees ex officio his capacity as Chairman of Rangers. Has the administration of the club changed that?

When did Messrs Bain and Greig last participate in a meeting of Trustees?

To conclude, the Rangers Charity Foundation is an excellent and valuable body. However, the appearance to the outside world is that there has been no “hand on the tiller” as a result of the differences between some of the Trustees.

It may well be that the gentlemen in question have been able to put personal and litigious differences aside to meet as the Trustees, in which case the governance issues will be reduced if not eliminated.

But the final two questions which I am sure the OSCR will be looking at are:-

(a)    How did the Trustees of the RCF decide to give up their share of the proceeds from the Charity match in favour of a commercial organisation? And

(b)   Have the Trustees been meeting to fulfil their legal duties in connection with the administration of the Charity and its funds?

We shall see, no doubt in the fullness of time.

 

 

Posted by Paul McConville

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17 Comments

Filed under Administration, Football, Rangers

17 responses to “The Rangers Charity Foundation – Two Questions for the Trustees re Legends v Glorie

  1. Greg72

    Is OSCR aware of this matter? If not, I think it should be drawn to its attention! As it happens, I am a Trustee of a number of charities – all older ones, but also smaller. The charities with which I am involved are very consious of their obligations, and act accordingly. Although, of course, I would not dream of making any disparaging comments about the Rangers charity per se, I am wondering about its governance, having regard to the current position of its Trustees.

    • Thanks Greg.

      Whilst each charity is different, how often, in your experience, would Trustees meet. Would it be monthly, quarterly or annually?

      How “hands on” are the Trustees?

      • Greg72

        In most of the chatiries with which I am involved, the Trustees meet quarterly. However, their Secretaries are either practising solicitors or chartered accountants. In addition, some have finance committees (consisting of a smaller group drawn from the Trustees. These also meet quarterly, and often there is correspondence by e-mail, where nescessary.

        As I said above, these are smaller than the Rangers Foundation.

  2. Insomniac

    Another fine explaination, Paul, and once again, thank-you for your work on behalf of Scottish football supporters. I seem to remember both James Mortimer and Andy Smilie being very active in the RCF but for reasons I don’t understand, references to Mr Mortimer in the Charity Foundation pages on the Rangers Website have recently been removed. Perhaps someone could come up with a cashed copy to try and explain why?

  3. Bhoywonder

    In England the requirement is that trustees meet at keast once per year to discuss accounts and menbership issues, the Chair giving all member a minimum of 21 days notice. The requirementa of trustees of RCF will be in their constitution which should be in the public domain.

  4. Daniel Toye

    This strikes me as very big news.

    What we appear to have is a charity, voluntary surrendering some of its income in favour of commercial enterprise. This very same enterprise being owned by a Trustee of the charity.

    This is huge and I would not be surprised if the word “scandal” is in time used to describe this state of affairs. I also think this has the potential to even eclipse some of the other unsavoury business we have seen so far.

    • Bhoywonder

      I again urge most not to hold your breath where Glasgow Rangers are concerned. Whether it’s a charity, tax, Tiny Wharton or Hugh Dallas, Rule Britannia, Tabernacle Lane or kicking with the left foot, it’s all the same. If you all understand that then you will realise that the SPL will sit with Mr Ellis and co and nake a deal…because apparently Scottish football cannot survive without this bile…..end of story…sorry Paul but honesty is always best.

  5. thomas cochrane

    somrthing smells here,”something,s rotten in the state of…….ibrokes…”!!!!!!

  6. missteeray

    “.., it would appear that…”, “I am sure however…”, “That is NOT to say that…”, “I would not expect…”

    Your deniable inference adds nothing I am afraid. This article may pander to your followers, who I am sure will yet again read scandal. I hesitate to say readers ‘cause – as you say – you only write for yourself. Many may wonder, then, why you don’t just keep your diary private. An internet blog is hardly a vessel for expressing ones angst, in the hope that no-one else will read it now is it?

    Oh, and your calculations are incorrect. But then book-keeping was never a strong point was it?

  7. duggie73

    Going by a skim of this, the Charity Commision aren’t even very keen to see loans paid by the charity associated with football clubs when the clubs are in distress.
    Sorry if already pointed out, and it’s a bit long, and not an identical case by any means…
    http://thetwounfortunates.com/is-plymouth-argyle-still-in-turmoil/#comment-8454

  8. Gopaul

    4 days no new post – what kind of a blog is this ……. 🙂

  9. Bhoywonder

    Paul,

    I regard your input in a higher context than RTC. I feel you have brightened up a somewhat intense situation and you should be commended for that. I am not a legal eagle but acknowledge that both of you contribute greatly for the common good regardless of colours. I respect you both for that as should every level headed person. I believe CW will never again show face anywhere outside of Monaco, I believe the Blue Knights have read RTC’s latest blog and I believe Glasgow Rangers FC as we know it will be obliterated from history. As for the financial mess, my sympathy lies with the ordinary victims…and NO one else. So lets not all get trapped in the quagmire of lying, cheating and deceit. Celtic
    couldn’t win either cups in the absence of RFC, so does Scottish football really need Rangers…I think not. Competition is already
    there and will strengthen over the next three
    years with improved financial input….bring it
    on!!! Keep on top of it Paul.

  10. Jim Harkins

    This is off-theme, but the thread seems to have run out of steam (and it’s a slow news day) and I hope that you will accept the questions.
    D&P’s last official statement ended with the following paragraph:

    “While we as administrators have a statutory duty to look after the interests of creditors and keep the business going, it is of paramount importance that the bid which is taken forward is the best on offer for Rangers Football Club.”

    I thought this was curious statement to make while floundering in a legal minefield.
    What if, a minority creditor dissatisfied with than eventual CVA payout, sued D&P , claiming negligence in the Administration process: how would a court or professional disciplinary body decide on the relative weighting to be given to “statutary duty” and “(the) paramount importance” of keeping the failed business in being?
    You may have dealt with the second question before and, if so, I apologise for wasting your time.

  11. Jim Harkins

    Sorry, finger trouble with that posting. I’ll try again!
    This is off-theme, but the thread seems to have run out of steam (and it’s a slow news day) and I hope that you will accept the questions.
    D&P’s last official statement ended with the following paragraph:

    “While we as administrators have a statutory duty to look after the interests of creditors and keep the business going, it is of paramount importance that the bid which is taken forward is the best on offer for Rangers Football Club.”

    I thought this was curious statement to make while floundering in a legal minefield.
    What if a minority creditor, dissatisfied with than eventual CVA payout, sued D&P, claiming negligence in the Administration process: how would a court or professional disciplinary body be likely to decide on the relative weighting to be given to “statutory duty” and “(the) paramount importance” of keeping the failed business in being?
    You may have dealt with the second question before and, if so, I apologise for wasting your time. If the Tax Tribunal decides against Rangers, could a “class action” appeal by other EBT users keep the case alive?

  12. The Charity Commission operates only in England and Wales. The body in Scotland is the Office of the Scottish Charity Regulator (OSCR), which Paul refers to. They are well aware of the situation and told me this on 13 March:

    “OSCR is aware of the recent media interest in the Rangers Charity Foundation regarding its apparent intention to forego most of its share of funds raised from the Legends football match to be held on 30 March 2012 in favour of Rangers Football Club. We have also received correspondence from members of the public expressing concern that a charity may use its funds in this way. In view of this, OSCR has determined it is appropriate to make further inquiries into the matter and is contacting the charity for further information.”

    Trustees of a charity have a number of legal responsibilities relating to charoty law on top of their duties as company directors. Their own rules will state how often the Trustees meet as a group and amy also detail matters that can be delt withby correspondence, which in this age can include e-mail. So it may be that they have actually “met” in a legal sense.

    • Greg72

      Interesting to hear that OSCR is contacting the charity – it would also be interesting to hear which of the Trustees (per Rangers Charity Foundation’s website these are C Whyte, John Greig and Jacqueline Gourlay) replies to OSCR.

      Incidentally, RCF is a trust, and not a limited company, so the Trustees are not company directors.

  13. Pingback: A Lesson in Blatant Spinning by Rangers – How It Reported the Charity Investigation Decision | Random Thoughts Re Scots Law by Paul McConville

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