The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
What are the potential pitfalls for a sports star and charity entering into a partnership?
Working with sports stars can raise the profile of a charity and the cause it supports, but before any decision is taken to work with a sports star, particular care and consideration must be given to the obligations and potential ramifications involved. Both the charity and the star must be aware that any negative publicity for one party is likely to have an impact on the other by association. In a time where the public are surrounded by charitable causes requiring donations, this publicity can be particularly detrimental to a charity; mud sticks.
One example is ex-Chelsea striker, Didier Drogba, who attracted controversy last year when a national newspaper reported that only a very small sum of the funds donated to the Didier Drogba Foundation had been used to help causes in Africa. Investigations from the Charity Commission cleared the charity of fraud or corruption, although it did say that donors may have been misled by the charity. Due to the investigation finding published by the Charity Commission and the subsequent Daily Mail article, the charity received negative publicity. Likewise, the Daily Mail article also named celebrity supporters of the charity, linking them to the scandal.
How can sports stars get involved with existing charities?
Sports stars are inspirations to many and often reflect the most positive attributes of sport: hard work, self-discipline and a determination to succeed. For a charity, particularly a small, grass roots organisation, the association of a sports star’s name can be a major boon, by increasing the opportunities for fundraising, awareness and publicity.
Many sports stars become brand ambassadors, wherein they can offer to associate their public image with a charity to help boost publicity. It can be a very flexible option; the sports star and the charity can agree how much (or how little) ‘hands-on’ involvement the star will have. This option doesn’t give the sports star the freedom to decide the charity’s aims and purpose, but the personal beliefs and actions of the star do become tied to the charity. This can work very well in practice, for example, David Beckham has been a Unicef goodwill ambassador since 2005. During this time, he has become the namesake of a fund, has helped to launch multiple campaigns, and has travelled to numerous countries to witness the impact Unicef’s work has made.
A more ‘hands-off’ approach could involve a star providing donations to charities, either directly or through grant funding. The benefits of this approach are that administrative burdens on stars and risks to public image for both parties are minimal. As these donations will often be substantial, consideration must be given to ensure that the funds are reaching their maximum worth, for example, that they are donated in a way that is efficient for tax and income purposes.
What are key considerations for a sports star looking to set up a charity?
Becoming involved in a charity at whatever stage can be a fulfilling pursuit. However, running a charity means that many crucial obligations will fall at your feet. For these obligations to be effectively managed, they need to be thoroughly understood with a strong plan in place to ensure that they are met. Putting in the time to ensure proper planning before embarking on a charitable venture can yield results further down the line, and will help to ensure that the contributions made to the charity sector are sustainable and impactful. In our experience, if the governance of the charity is followed appropriately and legal advice is taken, the charity can function without controversy.
Article by Shivaji Shiva Solicitor and Martin Brown, Trainee Solicitor.
If you would like more information about the topics discussed in this article, including forming a charity, please contact Shivaji Shiva. To find out more about the services we offer to charities, please visit our website.
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