Many charities, whether by design or accident, plough their own furrow. But they should not overlook opportunities to work together as this can be a practical and efficient way to get things done and achieve more than they could alone.
Before a charity pursues a joint working arrangement, it should always ask:
- What are its charitable objectives and will a joint working arrangement further these?
- What does it know of the other party – is it a charity, what do you know about its past activities, and have you seen its accounts?
- Is it in the best interests of the charity?
There are informal ways that charities can work together that do not require a formal commitment or legal tie e.g. networking events, sharing useful experiences, recommending contractors, and joint training events. Charities should be wary of informal arrangements becoming something more complex. Activities that involve data protection, professional fundraisers, or commercial participants cannot be dealt with informally as specific legal requirements will apply.
Charities undertaking joint awareness campaigns, research projects, or establishing purchasing groups to achieve efficiencies, should consider a simple legally binding contract with clear ground rules.
For more complex working arrangements a detailed contract should always be put in place. The more significant the possible outcomes and required commitment, the more important and detailed the contract will become. Professional advice should be sought in drawing up such contracts especially where there are ongoing contractual obligations with third parties, shared staff or intellectual property issues. Setting out how and when the agreement can be terminated will be crucial.
A special purpose vehicle, whereby a new organisation is created between two or more charities, will allow the creation of a separate brand. This may or may not be a charity itself, depending on what it is trying to achieve. The Disasters Emergency Committee and the Fair Trade Foundation are good examples.
The ultimate form of collaborative working is when two or more charities merge. The process can be complex with lots of issues to consider. It may be possible to keep separate identities and/or brands within this process. It is important that legal and accountancy advice is taken early on to minimise costs and ensure matters are streamlined. Often mergers work best where there has been an earlier collaboration between the charities concerned so they know each other and can better prepare for the merger process.
If you need advice reviewing the issues raised in this article or any other issue get in touch either by telephone 01726 74433 or email enquiries@stephens-scown.co.uk