In case anyone’s interested, in charity law charities must satisfy the “public interest” test. Their services must be substantially in the public interest.
For example, a community centre built only for the use of members of a church is not charitable, and neither is a school for fee paying students only. But they become charitable if the community Centre is also open to the public and if the school is used by poor students on scholarships (or if local kids get to use the pool, for example).
A charity cannot be actively harmful and damage the public interest. So a group dedicated to eradicating all animal testing wasn’t in the public interest so wasn’t a charity because ending animal testing would be bad for humanity.
the public interest has been construed very broadly. So even if a service benefits people in one town only it can still be in the public interest so long as everyone in the town can use it (like a bridge).
with all this in mind, I find it very hard to see how mermaids can succeed in arguing that the lgb alliance doesn’t act in the public interest. Even if we accept their argument that the charity is only for lgb people who agree with them, this is still a wide enough section of the public to qualify as in the public interest. It isn’t just a group for employees of one company, for instance. Lgb people are quite clearly members of the public as someone pointed out earlier.
but I also think it can’t be sustained that the charity is only for people who agree with them. The film the lgb alliance made can be watched by anyone. They don’t have to believe in the aims of the lgb alliance.