Dame Frances Cairncross, author of the Cairncross review, with Guildford Dragon editor Martin Giles in 2019.

Credit: Guildford Dragon / Martin Giles

The first UK local news organisation has gained charitable status in a landmark case that sets a precedent.

Guildford Dragon News is an online newspaper that started in 2012 and is run entirely by a small team of volunteers. It has successfully gained charitable status through the Charitable Commssion, a process that has taken two and a half years to complete.

The publication achieved this with the support from the Public Interest News Foundation (PINF) which funded its legal services, and from Tom Murdoch and law firm Stone King LLP in providing legal advice.

Five years ago, The Cairncross Review: a sustainable future for journalism report was published as an independent government paper that outlined several recommendations to help the local news sector stay afloat. One of those recommendations was to make it possible for news organisations to gain charitable status.

The idea is this would provide tax relief on its operations, and open the doors to philanthropy funding. This is more commonplace in the US, where a culture of philanthriopic funding is mature and helps local news organisations massively.

The UK was lagging behind for a few reasons, especially because some partisan news organisations were at odds with the criteria. As the paper notes: "The constraints that UK charity law applies to charitable organisations, preventing them from undertaking certain political activities such as securing or opposing a change in law, policy or decisions affecting the country, have excluded any type of journalism, public-interest or not, from tax exemption."

There is also the question of whether journalism can be considered a charitable act. The worry has always been that charitable status could subsidise low-quality content that is not in the public interest. It would appear we finally have a news organisation that passes the test.

Author of the report Frances Cairncross told via email: "It’s terrific that this experiment is taking place, and I will be watching it with great interest. Apart from anything else, it will be useful for any potential imitators to understand clearly what their paper must not do, as well as what is permissible under existing charities law. 

"This is a brave experiment and we can't yet be sure it will work - although I think it will. What we need now are some guidelines for other local press that want to try it. Editors will want to know what material can't be included and it may be difficult to provide general guidelines. "

Why was the Guildford Dragon successful then? It is an otherwise typical local news provider, covering local current affairs, business, history culture and reviews.

"We had to show them very clearly that our purpose was to provide public interest news and therefore we were not a for-profit organisation," explains Martin Giles, editor of the Guildford Dragon.

He and his eight contributors all work voluntarily. There is some advertisement revenue to cover overheads. Any surplus is split amongst contributors, but that is hardly much for an organisation with a turnover of around £7k per annum.

The Guildford Dragon will remain non-profit, but Giles now has wealthy philanthropists in his sights with a fundraising effort in the wings. He aims to raise enough cash to employ a full-time and part-time reporter for his team.

It will be business as usual otherwise. But he hopes this ruling will set a precedent for other newsrooms to follow.

"It’s very well known that local journalism is in a parlous state, and anything that can help other publications continue or be created, then I hope this might be an option for them.

"I wouldn’t be doing this if I didn’t think it was important; it’s very time-consuming, very demanding. But I think without local journalism, local democracy would suffer even more.

"There’s too little interest in local government as it is, and what we have, we really need to keep it going."

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