Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement
MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice
12.1 Legal References for this Section
- Charities Act 1992
- Charities (Protection and Social Investment) Act 2016
- General charity law principles
The following Legal Appendices MUST be read in conjunction with this section of the Code of Fundraising Practice
“Corporate Partnership” is a partnership between a fundraising organisation and a commercial entity, where the commercial entity provides money, skills or other resources to the fundraising organisation.
a) Organisations MUST carry out a process of due diligence, proportionate to the scale of the relationship, before engaging in a partnership.
b) Organisations MUST ensure there are no conflicts of interest, or potential conflicts of interest relating to the partnership.
12.4 Written Agreements
a) If the arrangement is such that the corporate partner falls within the definition of a ‘commercial participator’ (L9) then the commercial participator MUST* have a written agreement in place with the institution it proposes to benefit and certain information MUST* be included in this.
b) Fundraising agreements between Charities registered in England and Wales and commercial participators (L9) MUST* include:
- details of any voluntary regulatory fundraising scheme or standard that the commercial participator undertakes to be bound by;
- how the commercial organisation will protect the public from unreasonable intrusion on a person’s privacy, unreasonably persistent approaches or undue pressure to give; and
- how compliance with the agreement will be monitored by the charity, as specified within section 13 of the Charities (Protection and Social Investment) Act 2016.
Further guidance can be found here.
c) Variation MUST* be in accordance with the term in the agreement specifying how any variation should take effect.
d) In Scotland, the method by which a contract may be varied MUST* be provided for in the contract where the contract is with a professional fundraiser (L8) or commercial participator (L9) and MUST include similar provisions requiring the variation to be in writing and preventing an unfavourable variation from being imposed by one party alone.
e) Commercial Participators (L9) MUST* make a disclosure statement which includes, among other things, the name(s) of benefiting organisations and the amount of funds they will receive.
f) In other situations, if goods or services are being sold during the course of the partnership, there MUST be a written agreement governing the relationship between the company and the fundraising organisation/trading subsidiary concerned (even where this is not strictly required by the relevant Acts). This MUST be approved and understood by all parties.
g) The agreement MUST be considered, negotiated and agreed by authorised representatives of both parties before its commencement.
h) Where a Scottish Charity has an agreement covering the activities of a commercial partner operating in England and Wales, or the reverse situation applies, it MUST* ensure that the contract satisfies the legislative requirements of the country where the fundraising will be carried out and MUST ensure that the contract covers potential liabilities under all jurisdictions.
i) Review procedures MUST appear in the agreement and fundraising organisations MUST consider performance at these reviews and decide whether further action is appropriate (such as invoking penalty clauses, or reviewing the agreement).
12.5 Legal and Tax Issues
a) In England and Wales, if a fundraising organisation is a registered charity (with an income of over £10,000) it MUST* state on letters and other documents that contain a request for money or other property for the benefit of the charity (L12) its name and the fact that it is registered. In practice this usually means stating its charity registration number.
b) In Scotland, any literature from either party that is issued on behalf of the charity MUST* refer to the charity’s name, any other name it is known by, its charitable status, and its charity number (L12).
c) Charities which are also registered companies MUST* also comply with the relevant company law requirements (L12). This includes the requirement to have the word “limited” in the organisation’s name (unless an exemption applies – in which case status may be indicated by stating “a company limited by guarantee”) together with registered company number, place of registration (e.g. England and Wales, Scotland or Northern Ireland) and its registered office address. It MUST also name either all its trustees/directors or none.
d) As a result of the partnership, situations may arise where fundraising organisations or the corporate partner may have to pay tax or VAT. Organisations MUST* ensure that any liabilities are paid.
There is more information about corporate partnerships in the Institute of Fundraising’s Charities Working with Business guidance.