MHBC registered as a "Charitable Incorporated Organisation" (CIO) on 1st Feb 2024. This page provides some background information about why we have opted to become a CIO and the consequences of that.
Q: Why MHBC?
Our current premises are an ideal location, but very expensive. At the time of registration, we barely broke even, leaving our finances in a fragile state. Even the smallest drop in membership, increase in rent, or need for replacement equipment would have left us in a precarious position. Many face-to-face bridge clubs had closed since Covid. As a CIO we get reduced rental charge, which gave us a much better chance of survival. In addition, a CIO can apply for charitable grants, which supports our long-term goal of expanding into our own premises.
Improved finances also enable us to more easily support and continue our training, for example if we need to access paid-for help with outside trainers, or moving the venue to our existing location to ease the logistics, and to potentially purchase audio-visual equipment. In turn this opens up the possibility of running other practice and training sessions for members.
Q: In what respect is what MHBC does "charitable"?
The EBU definition, agreed by the Charity Commission is that bridge is charitable as a mind sport in much the same way as other amateur sport is charitable. A Charitable Organisation is one which operates on a non-profit basis for public benefit. Its definition is considerably wider than that which many people think of as "a charity". I addition to many Bridge clubs, organisation like the Scouts, Countryside Alliance, Vegetarian Society, and private schools are registered. Locally, Harborough Theatre and Harborough Cinema are CIOs, not to mention most village halls. It confers a range of financial advantages and potential opportunities not available to non-registered organisations.
Q: How does it affect members?
Hopefully this will never happen, but as a private members’ club, if anyone were to ever sue, or the club finances were mismanaged, every member is equally liable so would have to pay up if a case was lost. As a CIO however, the members carry no responsibility.
Trustees are still in the firing line but only if the finances have been mismanaged.
The flip side to this is that members no longer own a share of the club assets, they belong to the CIO. So as and when our bank balances and assets grow, those funds and assets do not belong to the members. This may be no bad thing. There are cases where clubs have become very wealthy, but bitter infighting around the use of the assets prevents them from using them in the best interest of the club. As a CIO we can ONLY use assets to further our cause; something over which the Charities Commission keep a close watch.
Q: How does it affect the running of the club?
The committee members have become "trustees", with the responsibility to manage the CIO and (importantly) to report to the Charities Commission each year with a set of accounts. This does mean a little additional work from the trustees to manage the finances, but being regularly monitored by a third party helps keep us on the right track. We have also had to adopt a new and more detailed constitution that meets the needs of the Charities Commission. Although this look alarmingly long and complex, it is essentially the same as we already had.
Q: What are the disadvantages?
1. As a CIO we have clearly defined activities, so we cannot easily change from being a bridge club to being, for the sake of argument, a bridge and cooking club.
2. As a member you no longer own a share of the club's assets.
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