You must have a written agreement in place with each paid third party or business partner you work with to collect donations. In England, Wales and Scotland, you must do this if the paid third-party service provider or business partner you work with falls within the legal definition of a “professional fundraiser” or “business participant”. If the third-party provider sells goods or services, a written agreement must be entered into that governs the relationship between the non-profit organization and the third-party fundraiser (even if this is not strictly necessary under applicable laws). While legislation may be seen as an additional hurdle to overcome, we always advise cooperating parties (whether the regulations apply or not) to enter into a clear written agreement from the outset to set expectations, minimize the likelihood of misunderstandings at a later stage, and ensure that an organization adequately protects its intellectual property. Charities that regularly enter into such agreements should already have model agreements in place to meet the requirements of the legislation. If a business raises money for charity through its sale (also known as cause-driven marketing), it must have a legal agreement in place with each charity it wants to support before launching its campaign – this is called a business participation agreement. A professional fundraiser or business participant must provide you with funds in accordance with the Charities and Charitable Fundraisers (Scotland) Regulations 2009. In Scotland, funds must be transferred as soon as reasonably possible and, in any case, within 28 days of receipt. The law in Scotland does not allow you or the professional fundraiser or business participant to agree otherwise, and this period cannot be extended even if the fundraiser has a reasonable excuse not to give you the money on time. Third-party fundraisers who do not fall under the legal definition of a professional fundraiser must indicate the actual amount and how the payment is calculated in a proposal or agreement, and fully clarify all fees, expenses and other related costs, how their fees are calculated and the payment deadline.
It is illegal for a commercial participant to claim, as part of an advertising project, that he or she is giving money to a not-for-profit organization, unless the claim is in accordance with a written agreement with the non-profit organization for which he or she is collecting funds. The agreement must be in writing and signed by both the business participant and the not-for-profit organization for which they collect donations. The written agreement between you and the third-party fundraiser must include terms that define what constitutes confidential information. Where the agreement provides for different levels of payment, this shall be clearly justified in the agreements by referring to the specific circumstances in which different levels of payment may apply. If this is the case, the agreement must include terms that allow you and the third-party provider to terminate the agreement before its remuneration changes. Under the Charities Act, any business that promotes sales on the basis that a portion of the revenue goes to a charity is designated as a “business participant” and must comply with the relevant provisions of the Charities Act of 1992 and 2016 and the 2019 Code of Fundraising Practice. This may include the monitoring measures described in section 7.3 to verify that fundraisers are in compliance with the Code. The terms of the agreement should allow you to read and, if necessary, review all relevant policies and procedures that the professional fundraiser has in place that are relevant to the protection of the public. This may include policies for people in vulnerable situations, how to deal with complaints and whistleblowing, training materials and the Code of Conduct for Employees. In Scotland, if the contract is with a professional fundraiser or business participant, it must explain how the contract can be changed.
It must contain conditions that stipulate that the change must be made in writing and that prevent a party from making an adverse change on its own. Agreements between a business corporation and a charity are governed by the Charities Act if the business is a “business participant” under the Charities Act. The business participant and the charity must enter into a written agreement that not only establishes the agreement between them, but also addresses other matters set out in the legislation. Note: There is no legislation in Northern Ireland regarding professional fundraisers or business participants. (However, non-profit organisations that collect donations in Northern Ireland may decide to follow the legal requirements of England, Wales and Scotland as a best practice.) Kathryn Heath is a Senior Partner in Stephens Scown`s IP/IT and Data Protection team and recently spent 10 months on secondment to an international charity, providing legal support on a number of issues. If you need advice on protecting your intellectual property or entering into business participant contracts, please contact IP by phone on 01872 265100 or by e-mail. IT@stephens-scown.co.uk. It is a criminal offence for a professional fundraiser or business participant not to comply with any of these Terms, and trustees of a charity may have breached their duty of care if they fail to make any representations, if any. You can get more information and advice from the Scottish Regulator`s Office of Charities or you should seek professional advice. Setting up this agreement takes time and resources, must comply with the Charities Act, can be available in various forms – and is known to be up to 80 pages long! As a result, charities will often require the company to commit to a minimum amount of donations before they can enter into an agreement, partner with them, and of course let the company use their logo. In Scotland, solicitation standards apply to professional fundraisers who solicit donations, business participants who make representations, and benevolent fundraisers (other than volunteers) who conduct benevolent fundraisers and need to be tracked. Business participants must solicit at any time (and anywhere) as part of a commercial advertising business or imply that money is being donated to one or more non-profit organizations or used for charitable, philanthropic or charitable purposes.
If a third-party fundraiser falls within the definition of “professional fundraiser”, the agreement must include details of the solicitation statement it must submit, as well as the fees and expenses that the professional fundraiser receives. A business participant is a person (whether an individual or a business) who, for both charities and businesses, must be aware of the legal requirements contained in Part II of the Charities Act 1992 and the various fundraising regulations if they wish to participate in a business participation agreement. If an agreement with a business partner falls within the definition of a “business participant”, the business participant must have a written agreement with the non-profit entity for which it intends to raise funds and certain information must be included. If there is a business participation agreement, a written agreement must be entered into between the charity and the business, which must include certain conditions prescribed by law. If your third-party fundraiser has or may have a conflict of interest, you cannot enter into an agreement with them without the permission of the person or organization whose interests conflict with their interests. If there is a significant conflict of interest, both parties must determine whether it is appropriate for the relationship to continue. Any change to the terms of the contract must be in accordance with the clause in the agreement that sets out how a change is to take effect. The declaration of invitation must be attached to each performance. This means that this must be done before a purchase of goods or services so that the consumer can see the prompt before making their purchase. A professional fundraiser or business participant must give you the money as soon as possible and in any case within 28 days, unless they have a reasonable excuse.
If you place fundraising content on a third party or business partner`s website, you should take the same care as when you place it on your own website. You must ensure that all paid third-party service providers or business partners with whom you work to collect donations comply with the Code. Failure to comply with these legal requirements is a criminal offence for the business, and the charity should report the issue to the Charities Commission, so it is important that a written agreement is made before a business participation agreement begins. The law applies regardless of the label that the parties may give to the agreement if the activities fall within the definition of a commercial participation agreement. .