The Memorandum and Articles of Association of the FSA prevents us from undertaking any taxable permanent trading activity. This is because charities must be fiscally prudent and trading is inherently risky. Most large charities set up separate trading companies through which they can generate revenues that can then be used to support their charitable objectives.
The FSA has registered a new company called ‘Forest School Trading Ltd’. This company will explore opportunities to generate revenues through activities that are in line with the interests of the FSA.
As the FSA lacks the capital to invest in this new company we have come to an agreement with our CEO, Gareth Davies, for him to manage and develop this new company in exchange for a minority shareholding (30%). Gareth is employed part time by the FSA and has the capacity to take on this role. Gareth is well placed to ensure that the interests and activities of the trading company remain aligned with those of the FSA.
The FSA retains the controlling share of Forest School Trading Ltd (70%) and representatives of the FSA board will be involved with all significant decisions made by the trading company. As already happens within the FSA board, any conflicts of interest arising between the two companies, or individuals involved, will be declared. In such cases, the FSA board will determine the appropriate next steps.
This is an exciting new step for the FSA. We expect the trading company to create new opportunities and services for FSA members and the wider Forest School community while generating revenues that the FSA can direct towards fulfilling its charitable objectives.