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Can someone explain to me why they're even allowed to do this? I thought they were a charity.

by veltas 2y ago

matt-p 2y ago
Charity and trading company were/are separate (as practically required, in the UK) A charity can't really trade in the same way a company can. For example a charity can't register for VAT (sales tax). The way it normally works is that a charity exists which takes donations and does charitable stuff, then a seperate company exists which makes money and sells stuff (does trade) and it happens to be run by the same folks, and donate money to the charity (or have some kind of 75% of our profits get donated to charity) promise. That's super trivial to unwind as the charity often has no formal ownership over the trading company, it is really just a beneficiary.
- matt-p 2y ago
  To be fair to the raspberry pi group, I think they were in a difficult position and the whole thing was getting much, much bigger than they ever had anticipated. On the grapevine, they had more money than they knew how to get rid of in accordance with their very narrow charitable objectives.
- veltas 2y ago
  The bit that feels dishonest is they share a brand, and publicly present themselves as a charity, and actually it's for personal gain. Sure they dotted their i's, but it seems like the key difference between the RPI foundation and the Captain Tom Foundation[1] is they have better lawyers. [1] https://www.theguardian.com/uk-news/2024/nov/21/captain-tom-family-personally-benefited-from-charity-they-founded-report-finds https://www.theguardian.com/uk-news/2024/nov/21/captain-tom-...
  - matt-p 2y ago
    No two separate things, you cannot, basically, trade under a charity structure, it would be almost legally impossible for the charity to be selling the raspberry Pis. Captain tom was just a badly run charity, they didn't trade.
    - mytailorisrich 2y ago
      Yes, setting up a commercial subsidiary is the standard way to go to trade in order to raise money for a charity. But I think a charity should spend most of its income on charitable activities. According to its accounts the Foundation spends £12m on that out of a £213m income from trading, which seems very small.
      - matt-p 2y ago
        Sure, but they're now a publicly traded company aren't they, it couldn't be say 60% whereas <=10% is a decent chunk but can still be justified to shareholders in the context of renting the trademark (which I HOPE resides in the foundation) and good will/marketing.
        mytailorisrich 2y ago
        That's not quite how it is. The commercial subsidiary is a publicly-traded company and the Foundation (the charity) owns about 49% of it (last year it wasn't publicly traded and they owed ~98% of it iirc). The Foundation received £213m from "other trading activities" last year (which I interpret as income from their share of the commercial subsidiary) out of a total income of £220m. Out of this, the Foundation spent £12m on "charitable activities" and £195m on "raising funds"... [1] [1] https://register-of-charities.charitycommission.gov.uk/en/charity-search/-/charity-details/5002372/charity-overview https://register-of-charities.charitycommission.gov.uk/en/ch...

Can someone explain to me why they're even allowed to do this? I thought they were a charity.

by veltas 2y ago

Can someone explain to me why they're even allowed to do this? I thought they were a charity.

Charity and trading company were/are separate (as practically required, in the UK) A charity can't really trade in the same way a company can. For example a charity can't register for VAT (sales tax). The way it normally works is that a charity exists which takes donations and does charitable stuff, then a seperate company exists which makes money and sells stuff (does trade) and it happens to be run by the same folks, and donate money to the charity (or have some kind of 75% of our profits get donated to charity) promise. That's super trivial to unwind as the charity often has no formal ownership over the trading company, it is really just a beneficiary.

matt-p 2y ago
To be fair to the raspberry pi group, I think they were in a difficult position and the whole thing was getting much, much bigger than they ever had anticipated. On the grapevine, they had more money than they knew how to get rid of in accordance with their very narrow charitable objectives.
veltas 2y ago
The bit that feels dishonest is they share a brand, and publicly present themselves as a charity, and actually it's for personal gain. Sure they dotted their i's, but it seems like the key difference between the RPI foundation and the Captain Tom Foundation[1] is they have better lawyers. [1] https://www.theguardian.com/uk-news/2024/nov/21/captain-tom-family-personally-benefited-from-charity-they-founded-report-finds https://www.theguardian.com/uk-news/2024/nov/21/captain-tom-...
- matt-p 2y ago
  No two separate things, you cannot, basically, trade under a charity structure, it would be almost legally impossible for the charity to be selling the raspberry Pis. Captain tom was just a badly run charity, they didn't trade.
  - mytailorisrich 2y ago
    Yes, setting up a commercial subsidiary is the standard way to go to trade in order to raise money for a charity. But I think a charity should spend most of its income on charitable activities. According to its accounts the Foundation spends £12m on that out of a £213m income from trading, which seems very small.
    - matt-p 2y ago
      Sure, but they're now a publicly traded company aren't they, it couldn't be say 60% whereas <=10% is a decent chunk but can still be justified to shareholders in the context of renting the trademark (which I HOPE resides in the foundation) and good will/marketing.
      - mytailorisrich 2y ago
        That's not quite how it is. The commercial subsidiary is a publicly-traded company and the Foundation (the charity) owns about 49% of it (last year it wasn't publicly traded and they owed ~98% of it iirc). The Foundation received £213m from "other trading activities" last year (which I interpret as income from their share of the commercial subsidiary) out of a total income of £220m. Out of this, the Foundation spent £12m on "charitable activities" and £195m on "raising funds"... [1] [1] https://register-of-charities.charitycommission.gov.uk/en/charity-search/-/charity-details/5002372/charity-overview https://register-of-charities.charitycommission.gov.uk/en/ch...