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4.0 Working with third parties

Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement

MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice

4.1 Legal References for this Section

The following Legal Appendices MUST be read in conjunction with this section of the Code of Fundraising Practice

4.2 Introduction

a) This section outlines standards involved in working with third parties, including consultants, freelance fundraisers, agencies and suppliers, as well as the standards expected of them. Organisations MUST require the adherence of third parties to the Code.

b) Organisations MUST make all reasonable efforts and exercise due diligence to ensure the ongoing compliance of third party fundraising organisations with the Code and their legal requirements.

Reasonableness for the purpose of this Code requires the organisation to deliver effective and proportionate monitoring. Means of evidencing reasonable efforts to ensure effective ongoing compliance may include (but are not limited to):

  • ensuring the values of the organisation are reflected in the policies, performance objectives, indicators and, where applicable, the incentives of the third party fundraising organisation;
  • establishing a named individual with lead responsibility for monitoring compliance;
  • developing clear reporting requirements with the third party fundraising organisation and regularly reviewing progress against pre-agreed performance, quality assurance and compliance targets;
  • defining how monitoring will be carried out, including establishing an appropriate frequency for monitoring based on an assessment of the risk posed by the fundraising activity;
  • approving and regularly reviewing agency compliance training, including frequently observing the delivery of this training onsite;
  • authorising content and materials for training;
  • regularly conducting (and documenting the results of) call monitoring, mystery shopping, site visits and/or shadowing with third party fundraisers;
  • setting out a clear policy for handling complaints and feedback, including the time frames, procedure for escalating and raising internally, and the transfer of information between the charity and the third- party fundraising organisation;
  • setting out a clear internal procedure for members of staff and volunteers to report any concerns they may have regarding their organisation’s fundraising practice; and
  • agreeing an action plan with the third party fundraising organisation to address any concerns, where these are identified.

Further information on assessing risk can be found in the Charity Commission CC26 guidance on charities and managing risk and in the NCVO’s How-to guide.

Further information on implementing monitoring arrangements with third party fundraising organisations can be found in the IoF’s guide “Successful Partnerships for sustainable fundraising”.

c) Organisations MUST require that any agency or third party that they work with complies with the requirements of current Data Protection law and the Privacy and Electronic Communications (EC Directive) Regulations 2003 as set out in the Code, including the requirements of the Telephone Preference Service, regardless of the country or legal jurisdiction in which the agency is based or operating.

In some circumstances this is a legal requirement for charities, but in other circumstances it may not be. Section 5: Personal information and Fundraising includes further information on requirements relating to data protection.

d) Before soliciting money or other property a “professional fundraiser” MUST* have a written agreement in place with the Client (please see the guidance at L10 for further details).

e) Each time a “professional fundraiser” solicits money or other property, they MUST* make a disclosure (or solicitation) statement (please see the guidance at L10 for further details). In all cases, the disclosure (or solicitation) statement MUST be made either before money is given by the donor or before any financial details relevant to the transaction are requested by the fundraiser (whichever is the sooner).

f) When acting solely as a Consultant or Fundraiser in Northern Ireland, such statements and contracts MUST be made (future regulations in Northern Ireland may make this a legal requirement).

g) Organisations MUST require any agency or third party they work with to inform them of any notice received by the agency or third party to cease or not commence direct marketing from (or on behalf of) an individual.

h) Organisations MUST require any agency or third party they work with to comply with any notice or request from (or on behalf of) an individual to cease within a reasonable period (meaning as soon as is practicable, but in any event not exceeding 28 days), or not begin to process that individual’s personal data for the purpose of direct marketing. This includes any such notices or requests made through the Fundraising Preference Service.

4.3 Definitions

For the purposes of this section these definitions apply:

“Fundraising Services” means the soliciting of donations or promises of donations for charitable, benevolent or philanthropic purposes in return for a reward.

“Consultant” or “Freelance Fundraiser” is used here to mean an individual, partnership, company or other business which is providing services to an organisation in relation to fundraising.

“Client” is used here to mean the organisation to which services are being provided by the Consultant or Freelance Fundraiser.

“Professional Fundraiser” A Consultant or Freelance Fundraiser who provides Fundraising Services in England and Wales or Scotland is likely to fall within the legal definition of “professional fundraiser”.

4.4 Pre-Contract

a) Consultants and Freelance Fundraisers MUST only claim experience, qualifications and achievements that can be substantiated.

4.5 Contracts/ Written Agreements

Regulation can differ between the three UK legal jurisdictions and caution should be exercised to ensure correct compliance in each area.

a) If the Consultant/Freelance Fundraiser falls within the definition in England and Wales or Scotland of “professional fundraiser”, see below for contract requirements which MUST* be complied with. Otherwise an agreement or Contract MUST be in place between the Consultant/Freelance Fundraiser and the organisation it is providing services to.

b) Fundraising agreements between Charities registered in England and Wales and professional fundraisers MUST* include:

  • details of any voluntary regulatory fundraising scheme or standard that the professional fundraiser 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.

Means of evidencing this requirement may include (but are not limited to) the compliance monitoring measures set out in 4.2b above. The agreement should have adequate provision for the charity to read and, where necessary, review any relevant policies and procedures that the third party has in place which are relevant for the protection of the public. This may include (but is not limited to): policies on people in vulnerable circumstances; complaints handling and whistleblowing; training materials; and the staff code of conduct.

Further guidance can be found here.

c) The agreement MUST include clear and realistic expectations of the activities to be undertaken, budget, resources, timings and the possible outcomes.

d) Review procedures MUST appear in the agreement.

e) In England and Wales, the Client MUST* consider performance at these reviews and decide whether further action is appropriate (such as invoking penalty clauses, or reviewing the agreement).

f) 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 or commercial participator and MUST include similar provisions requiring the variation to be in writing and preventing an unfavourable variation from being imposed by one party alone.

g) In Northern Ireland there is no equivalent legislation in place to date which governs contracts or written arrangements with third parties. Northern Ireland organisations may adopt the good practice of the other jurisdictions.

4.6 Fees

a) Consultants/Freelance Fundraisers MUST state the actual amount and/or basis of remuneration in any proposal or agreement and make completely clear all fees, expenses and other associated costs, the basis or range upon which fees will be based and the payment timescale.

b) If a Consultant/Freelance Fundraiser falls within the definition of “professional fundraiser”, the agreement MUST* include details of the fees and expenses the professional fundraiser will be paid.

c) Consultants/Freelance Fundraisers MUST NOT be remunerated by commission or commission-only methods, unless certain criteria are fulfilled (see 19.6 Commission)

d) Any allowance for variation of payment levels MUST be clearly justified by reference to the particular circumstances and to include a variation mechanism allowing the Client the option to terminate before a variation takes effect.

4.7 Conflicts of Interest

a) Each party MUST alert the other party if either is aware of a potential conflict of interest, whether perceived or actual, and MUST NOT represent conflicting or competing interests without the express consent of the parties concerned and after full disclosure of the facts.

4.8 Confidentiality

a) Consultants/ Freelance Fundraisers MUST NOT* disclose any information of a confidential nature obtained during their relationship with a Client, unless it is information within the public domain or information which may otherwise be legally disclosed.

b) Terms governing conditions of confidence and what constitutes confidential information MUST be stipulated as part of the written agreement between the Consultant/ Freelance Fundraiser and Client.

For more information on selecting and using online giving platforms, see The Institute of Fundraising’s Making the Most of Digital Donations guidance.