Councils and prospective Trustees invariably discuss the setting-up of a Charitable Trust to operate a local theatre full of hope and enthusiasm for their new joint venture, says Robert Beattie.
However, unless both the Trustees and the local authority understand from the outset that what they are discussing is a transaction with many of the characteristics of the sale and purchase of a commercial business, the future relationship of the Trustees and the Council may be seriously prejudiced. Having said that, Councils are political beings and are driven by events which are contrary to the interests of the theatre business.
The job of a charitable Trustee is never one to be taken on lightly, and the job of Trustee of a theatrical charitable Trust is one which should never be taken on other than with full knowledge of the duties involved and the business being acquired. Several important issues must be considered and dealt with:
? What liabilities are the Trustees to take on e.g. employees, show contracts; and what assets will the Council pass over e.g. the theatre itself, fixtures and fittings, reputation
? What are the terms on which the Trustees will hold the theatre building e.g. the lease, maintenance, termination of the lease if the venture fails
? What funding will be available from the Council? In its early days, it is very likely that the Council will be the main source of grant funding; is the grant sufficient both to achieve the Business Plan and to provide a financial cushion in hard times? And what capital funding is available for projects?
? How long is the initial funding arrangement certain to continue? As political creations, Councils have finite lives, but businesses need as much certainty as possible. How can the contract between the Council and the Trustees be ended if a new Council withdraws support?
? Has a Business Plan been prepared and, if so, is it realistic? Are the Trustees sufficiently familiar and in agreement with the Business Plan as to ?own? it?
? What indemnities will the Council give the Trustees should the venture fail? The Trustees are taking on a heavy responsibility without payment but can be called upon themselves to account financially
? Has the catchment area of the theatre been fully canvassed so as to establish the likely support for the theatre including the type of events which the population would find attractive?
? Do the Trustees, as a body, have the skills necessary to operate the business? The sort of skills needed are, amongst others, management, financial, personnel and negotiating skills plus an understanding of the arts and theatre world
? Usually, a theatrical charitable trust is operated through the vehicle of a company limited by guarantee. As a result, Trustees hold the dual responsibilities of charity trustees and company directors; do the prospective Trustees understand their obligations and responsibilities under the Companies Acts, the Charity Acts and the Trustee Acts?
? Do the Trustees have enough time to put to what is a demanding, if rewarding, job?
? Who is to be responsible for the day to day operation of the business? Is there a competent Chief Executive already in place? If not, what help will the Trustees have from the Council to find one?
? What arrangements are there for the maintenance of good relations with the local authority? Regular meetings between Council and Trustees are essential to maintain the fundamental principle of openness between the parties. Has a senior officer of the Council been designated as liaison?
Robert Beattie is a solicitor in Barnstaple, North Devon t: 01271 375821. From 1993 to 1999 he was Chairman of North Devon Theatres? Trust (Queens Theatre Barnstaple, Landmark Theatre Ilfracombe).