The proposals, benefits, drawbacks etc.

[Graham]

The 'pro' lobby has been saying that if the two organisations are merged, then the Club's former main asset, which was endowed in the Trust, would come back into the control of members. What is being pointed out on the Save the CTC web-site is that this is not the case. The building would become a restricted asset of the new charity.

One of the main reasons that certain members of Council are supporting this move is that they were responsible for signing away the Club's main asset on the basis of poor advice and with little time to consider the implications of what they were doing. They seem to have convinced themselves that they will be 'restoring control of the asset to the members' - that simply isn't the case.

Thanks for the clarification. I understand it.

[thirdcrank]

Yes. I think the thing that needs to be stressed again and again is that although charitable giving is very tax efficient - as in a jolly good way of avoiding tax - unless you are devious - as in dishonest - you are, at a personal level, effectively losing control of the money, which is also non-returnable. Taxes are a way of financing public projects where the people who are stumping up - the taxpayers - get only a limited say in how it's spent, by electing politicians who may or may not keep their promises. Under our law, charities are given certain financial advantages in return for carrying out worthwhile public projects - AKA charitable purposes. Charitable donors have a much greater say about the way their money is spent but it cannot be something that just comes back to them personally. The whole body of law in this area is designed to achieve this, and as some wide boy finds a way round it, eventually the authorities close it off.

Donate to the lifeboats and your reward is feeling good inside. Make a very big donation to the lifeboats and you may even get to decide whose name goes on one. The lifeboats themselves are there to rescue anybody who needs it, not just the people who have paid for them. At a less dramatic level, that is the idea behind all charitable giving.

[belgiangoth]

Sorry, struggling to find answers here - where did I go wrong:

Most of CTC income is through member fees, if they become a charity, with giftaid, that could be increased by 20%, whichis massive!

Drawback (see savethectc website) although we would have 25% more money, we would only be able to spend 1/4 of that on our members, which is half of what we currently spend ...

Possible further issue is that as a non-charity we can deduct some things from tax, while if we are a charity we could tax deduct. The best organisations run as both a charity and a non-charity to maximise benefits, though this requires a high enough turnover for the accountant fees.

On the balance I'm in the no camp, mostly because I think it's view has been under-represented and I didn't like getting a pro email.

[irc]

Sorry, struggling to find answers here - where did I go wrong:

Most of CTC income is through member fees, if they become a charity, with giftaid, that could be increased by 20%, whichis massive!.

The 20% is of the before tax sum. Get paid £100. Govt takes £20 in tax. You donate the £80 left to charity and sign a gift aid form and the charity can claim your £20 back. So the donation is increased by 25% - £80+£20.

But as I understand it the CTC can't claim tax back on the entire subscription. That part which pays for benefits to the member doesn't count for gift aid. I think this is the 25% figure mentioned elsewhere. So gift aid might apply to £27 of the sub. roughly £7 per member then.

But many members may not be taxpayers, students, non working mothers, unemployed, pensioners, . Other may just not bother signing the gift aid form. So the average benefit will be far less.

Actually one question I have is that if the member benefits can be provided for a quarter of the subscription and the campaigning side doesn't make any losses why is there a proposal to increase the subscription to £37.

[thirdcrank]

I think it as also true to say that that the donor of a charitable donation can retain the tax otherwise payable. This was particularly significant in the days of Super Tax which was once 19/6d in the £. Higher rate income tax was still at 83% when abolished by Thatcher, partly to reduce these tax dodges.

The point about Gift Aid is its simplicity for standard rate taxpayers but they are also donating the tax refund to the charity.

[robgul]

SNIP

Actually one question I have is that if the member benefits can be provided for a quarter of the subscription and the campaigning side doesn't make any losses why is there a proposal to increase the subscription to £37.

That would seem to about the strength of it for "benefit" ... and it appears benefits will further diminish if the charity happens - you also need to factor in the number of members that will not renew .... further reducing the "Gift Aid value"

[glueman]

A few quid rise in subs would cover any charity income and member's would still have their club. Too straight forward I expect. The more this proposal unravels the more bizarre, not to say cheeky, the whole thing sounds. It's amazing what people will swallow if you keep a straight face and wear a tie - ask a politician

[Jonboy]

Am I missing something?

Why, if the financial benefits are at best going to probably net not much at all, do the pro-lobby need to be a charity to campaign effectively?

Assuming they are going to have the same personnel as before why can't they campaign effectively now.

The most successful campaigning lobby group of all time, IMO, is CAMRA and it's not a charity.

Someone please enlighten me!

[js]

I am also a member of the YHA which has also changed to charitable status some years ago. As a result it has become an agent for government policy rather than a club for members. I can see exactly the same thing happening with the CTC. If the government wants assistance with implementing policy it should employ the CTC and other cycling organisations as consultants. Like other members in the forum I want a club not a quango.
Whilst I like some of the work Sustrans has done to promote cycling I do not think anyone would describe it as a club. I do not want the CTC to go the same way.

[John Catt]

I am also a member of the YHA which has also changed to charitable status some years ago. As a result it has become an agent for government policy rather than a club for members. I can see exactly the same thing happening with the CTC. If the government wants assistance with implementing policy it should employ the CTC and other cycling organisations as consultants. Like other members in the forum I want a club not a quango.
Whilst I like some of the work Sustrans has done to promote cycling I do not think anyone would describe it as a club. I do not want the CTC to go the same way.

I think you will find that the YHA has been a charity almost since its outset. The orginal objectives were "To help all, especially young people of limited means, to a greater knowledge, love and care of the countryside, particularly by providing hostels or other simple accommodation for them in their travels, and thus to promote their health, rest and education."

In 2005 the charitable objective of the association was changed to:"To help all, especially young people of limited means, to a greater knowledge, love and care of the countryside, and appreciation of the cultural values of towns and cities, particularly by providing youth hostels or other accommodation for them in their travels, and thus to promote their health recreation and education."

This was preceded by (to quote from Wikipedia) "Significant modernisation of hostels had occurred during the 1970s but by the early 1980s it became clear to YHA that it needed to change as the stresses and strains of running what was a large organisation began to show on what was almost entirely a volunteer run body. Direct management of the hostels was removed from the regional committees and a professional management structure was put in place.[11] The regional committees were themselves reformed into four regional councils; North, Central, South and Wales." I think it is the change to professional management and revised objective that probably caused the changes you refer to, not charitable status.

If the government wants assistance with implementing policy it should employ the CTC and other cycling organisations as consultants. Like other members in the forum I want a club not a quango. Whilst I like some of the work Sustrans has done to promote cycling I do not think anyone would describe it as a club. I do not want the CTC to go the same way.

Much of the day to day work of the CTC is undertaken by the charitable trust. This includes some projects funded by various government departments, but these projects don't depend on charitable status. To quote from the document "money and tax" on this site “Last year CTC spent around £2.2 million on its own activities, commissioned on behalf of members by CTC Council. Of this about £1million was spent by our Trust, for example our campaigning, volunteer campaigner support, Fillthathole, member group support, touring and technical officers, routes, the website, Newsnet, Parliamentary lobbying, public transport advice, supporting mountain biking and the running of our national office.”

I'd be interested to know why don't you think that the CTC can carry on as a Club if it also a charity?

Regards,

John

[crazyace]

Having read all that I am still no wiser as to which way to vote.

[js]

Who says tax is a bad thing? The purpose of paying tax is to fund things that the electorate and pressure groups, like ourselves, can pursuade politicians to provide. Tax is really a form of beneficial charity. We should be glad to pay tax and concentrate on campaigning to get the goverment to put its resources in directions we think are most desirable whilst continuing to be a club. The "Big Society" should allow clubs and politicians to do what they do best. We can be the ideas based on experience people and elected politicians can adapt our ideas with the help of professional civil servants to the real world. A much better state of affairs especially in this age of cutbacks and abolition of quangos including Cycle England.

John

[Steady rider]

In practice the CTC is more like a club than a charity.

Most members join for the benefits it provides and the long standing of the CTC in working for cyclists. The charity idea was always good to try and gain more cash but if members wish to be part of a charity, more than part of a cycling club, or can both co exist without any problems?

I have mixed views on this issue but in the end I see the CTC as mainly a cycling club and acting in its members interest first. As a charity this may be compromised but in other ways it may be of benefit.

With 600 members asking for a full vote and many voting against at the 2010 AGM, it is more dividing the club than would be expected. So I would vote against. This is not to say the charity arm of the club should not be expanded to say improving safety or introducing bike hire, like in Dublin, (see helmet section post today).

[thirdcrank]

... or can both co exist without any problems?...

They co-exist at the moment in the form of the CTC and the CTC Trust which is the charity part. Whether there are problems is one of the points which has been argued and at some length.

One consideration is that these are one-way decisions, in that once something has been transferred to a charity, the original owners cannot take it back. If the charity is wound up for whatever reason, then any remaining property must normally be transferred to another charity with similar aims.

The biggy here was the CTC HQ building. A decisions was taken - alleged by some to have been approved with little consideration - to transfer ownership of that building to the charity. That had the benefit of saving a large sum of tax for the CTC 'as a whole' ie if the membership club bit and the charity bit are seen as being still pretty much one and the same for all except the lawyers. OTOH, it does mean that the club has irrevocably given away its biggest real asset.

I think it has to be understood that the entire basis of charity law is altruism, even if some fat cats with good lawyers have corrupted it into a jolly good tax wheeze on occasions. For anybody who believes in the promotion of cycling to the world at large and who is happy to pay from their own pocket to do this, then charity status must be a good thing since the govt will forgo the tax it would otherwise have collected and this is why charities are so keen to get contributors to sign up for gift aid - it's all more £££ going to the good cause. OTOH, if you are in the CTC for the benefits going to you personally as a member, then inevitably, the charity idea is a bad idea.

To declare my interest, I voted against all the charity proposals at the AGM. I have had nothing to do with the current petition and I have not yet voted but I've seen nothing yet to cause me to change my mind.

[Jonty]

I'm a new member of the CTC and I have to come to a decision on which way to vote. I've read the arguments for and against the proposal. What I've found surprising is that many consider that the CTC has not been as transparent, accountable and open as it should have been in its decision-making, financial accounting and involvement of members. It is also quite clear that the proposal to become a charity has been badly handled. The advantages and disadvantage of charitable status have not been set out in an objective and considered manner. This has resulted in considerable mistrust between certain sections of the membership and the CTC.
My broad impression is that the thrust for charitable status comes from the management and staff of the CTC who consider that extra funding and tax advantages will secure existing jobs and provide further career opportunities as well as providing more interesting "high-level" work.
On the other hand those against the proposal are concerned that accountability and transparency are likely to worsen if the proposal proceeds, membership-specific benefits would continue to decline and the CTC would effectively become a QUANGO doing the Government's bidding.
I shall be voting against this proposal. If the CTC had been run in a transparent, accountable and open manner and if members had been kept fully informed of how their suscriptions were being spent in an accessible and understandable way, I would have been more inclined to support the proposal.
In my opinion the CTC should get its existing house in order by improving accountability and transparency and improving services to members before embarking on major changes to its constitution.
The priorities should be to reduce subscriptions, increase member benefits and reduce costs in this period of economic stringency and uncertainty. Other organisations are having to do it and so should the CTC.
jonty