The two main streams of funding for sports clubs are grants and fundraising. One in every five applications to the 2017 Sports Capital Grant (SCG) were deemed invalid. The SCG is operated by the Department of Transport, Tourism and Sport and provides grants to assist in the development or refurbishment of sports facilities and the provision of sports equipment.

Some €37m of sports capital money was granted to clubs across the country in recent weeks.

While 30 of the 31 capital grants over €100,000 were awarded to Dublin clubs, arguably rural Ireland performed better on per-capita basis. It was allocated in three segments; capital, equipment and resubmissions. Analysis by 2into3 shows that combined; Dublin received €7.07/capita, Leinster received €11.92/capita and outside Leinster received €12.87/capita.

Consultant with 2into3, Darren McMahon, outlines some common mistakes made when applying for funding under the Sports Capital Grant. Thirty-four million euro has been allocated for the 2019 round in Budget 2020 but the deadline for submissions is likely to be in early 2020.

1 Application is too rushed

Rather than leaving the application tight to the deadline, Darren recommends that the club makes a plan of where it wants to be in two to three year’s time. A club with direction is more informed, he says.

2 Every club should apply

Funding is available for equipment and capital. Receipts will be needed for equipment bought.

3 Clubs should pick up the phone

There is a local representative from the Department of Sport for almost every county and they are there to make your application process easier.

4 Clubs believe they can’t apply

Darren says he has met a number of clubs that believe they cannot apply for funding if they don’t own the land where they train.

However, there is no requirement for land ownership if seeking equipment funding. Once the equipment is portable and not for personal use, then applications are valid.

5 Documentation

To apply for funding there must be a bank account in the club’s name. The club must supply a minimum level of 5% of the funding itself and give quotations, for example from a supplier website, when making an application. Applying for grants on capital is a little more complex.

Some of the pitfalls include:

A Wrong documents uploaded

Sometimes the same documents are uploaded multiple times.

B Information overload

Sometimes clubs detail too much of what the plan is, going above and beyond what would be covered by a grant. For example, roads are not funded by the Sports Capital Grant, and the Department does not want to hear about them. It’s the club’s responsibility to ensure the documentation meets the requirements of the programme. A solicitor must fill out part of the application form, a section called Appendix 5. Darren says this can often be filled out incorrectly and clubs fail to check this before submission.

C Scoring low on description

Each section of the grant application is scored on how well it matches criteria. Darren says clubs often score low on the section that asks them to describe their plan in 800 words. In this section the Department is looking for information on who plays for the club and who is being targeted to join. The aim here is to meet social inclusion objectives. For example, can the club target people with disabilities or ethnic minorities? A club can make the point about winning a division or trophies but the wider social inclusion piece should be considered.

Before 2018, all sports capital funding was allocated per capita per county, meaning the scoring system had a smaller part to play. However, in the 2018 equipment only allocations the department changed its approach. Money was allocated based on score rather than per capita. Only the top 75% of valid applications received funding as a result.

Fundraising

Every club will carry out a certain amount of community fundraising, such as a Strictly Come Dancing, karaoke night, raffle, table quiz or field day. But Darren says that one of the key things rural clubs forget is keeping in contact with young people who leave the community when they move away for college or work. He recommends that when you are asking people for donations that you also ask for their contact details and permission to contact them about club news or events.

“Every club will have an event once a year. However, most clubs run too many events, experiencing little return and fatiguing volunteers. People like to see results. It is easy to wrap fundraising around a new pitch or clubhouse for example. But when you are constantly just raising funds for the running of the club you need to show people what it is delivering to the community,” says Darren.

He added that the most common complaint you hear is that a club is stuck for volunteers. As Darren points out, there are many people surrounding a club community that aren’t necessarily playing the sport but are parents of children involved, for example. “It is easier to involve people when they know what they are buying into. What is the ethos of the club? Why does it exist? People give regularly to charities because they believe in its reason for existing. Ask yourselves, what separates our club from the rest?”

In terms of time spent on social media, Darren says that clubs need to be smart about this; know your audience and what you want to achieve from having a social media presence. For example, if the club’s members are mostly of an older generation then Facebook is the best platform to use. If there are younger people involved then Instagram is popular among them.

If asking companies for donations, Darren recommends that you tell them exactly what their money is being spent on.

Also, offering a three-year deal on signage around a pitch rather than coming back to a company on an annual basis can yield better results and save time for volunteers. However, deals need to be reviewed and pitchside branding changed if that company is no longer a sponsor.

Sports clubs have the advantage of being able to offer tax relief on personal and corporate donations.

Tax relief on donations

Your club may be able to claim tax relief on donations if it is an approved sports body (Section 235 status from Revenue) and has an approved capital project with the Department of Transport, Tourism and Sport.

Donations from individuals

If a pay as you earn (PAYE) worker makes a donation, the sports body can claim the tax relief. To do this, you must get an appropriate certificate from the person making the donation and complete a Form 847A and submit it through MyEnquiries to the Charities and Sports Exemption Unit.

The relief is calculated by grossing up the donation at the rate of tax paid by the individual. The amount of the refund cannot be more than the amount of tax paid by the donor for the same year.

Example: John makes a donation of €600 to an approved sports body in 2016. The tax rate is 40%, so this means that the donation of €600 is 60% of the total donation.

To calculate the relief, the total donation is grossed up as follows: (€600÷60)×100 = €1,000. The refund amount that can be claimed by the approved body is €400 (€1,000-€600).

Once John has completed the appropriate certificate, the approved sports body can claim the refund. But if he only paid €350 in tax that year then that is the maximum amount of the refund.

Donations from self-assessed individuals and companies

A sports body cannot claim the relief for donations from a self-assessed individual or company. Instead, the donor can claim the donation as an expense when calculating their total income or profit.

Example: Company X donates €1,000 to an approved sports body. The corporation tax rate is 12.5%, so the relief that the company can claim is €125 (€1,000×12.5%). The sports body receives €1,000 but the cost to the company is only €875. In this instance a receipt must be provided.

For more information visit the Revenue website.

2into3 is a consultancy company in the non-profit sector. It works with sports clubs on a one to one basis, helping to make grant applications. Fees are €3,000 retainer plus VAT; and 3% of funding allocated plus VAT.