In this second article, we outline key points charities should consider when collaborating with a brand.
Considering these points at the outset (and throughout) the relationship will help the charity to follow Charity Commission guidance and best practice as well as fundraising law, and hopefully lay the foundations for a successful and long-lasting relationship.
Due diligence
As a key element of risk assessment, it is important for the charity to learn as much about the brand as possible. This will help to ensure that the brand and charity are aligned on the values and motivations of the partnership. In particular, consider:
- Credentials – how is the brand performing financially? Are there any reputational concerns? How do they come across online and social media? Do their products and/or services align with your charitable purposes?
- Motivation – what do you both expect to gain from the collaboration? Does the brand have a history of charitable giving? Do they share similar values and ethics to you?
Charities can carry out this research themselves (by discussing things fully with the brand and key stakeholders, and by using resources such as the Charity Commission’s compliance toolkit and the Companies House register).
As well as considering the above, the charity should self-reflect and assess:
- Policies and procedures – particularly whether they identify, review and appropriately address any risks to the charity as a result of the collaboration. If the charity does not have policies in place, NCVO has helpfully published templates online (see here).
- Conflicts of interest – will the collaboration put a trustee in a position where their duty to the charity conflicts with their duty to another person or organisation? If so, this will need to be properly recorded and managed.
- Perception – what would your employees, supporters and beneficiaries think about this collaboration?
- Exit – how long with the relationship last for and how will it end? What happens if something goes wrong – can the charity exit quickly?
Getting the balance right
Charities should not go into a collaboration feeling that they have less negotiation power than the brand. The value in the collaboration lies on both sides, and the agreement should reflect a fair deal for both parties. When negotiating an agreement, bear in mind the following points:
- Branding – a charity’s name is a valuable asset and should be protected accordingly. Have a suitable licensing agreement in place if you are sharing your charity’s logo and branding and ensure there is a reciprocal agreement enabling you to benefit from use of the brand name and any logos. Make sure you can stop the brand using your logo/branding quickly if something goes wrong.
- Ownership – who will own what during the collaboration? Will you create a combined logo? Consider things such as trademarks, copyright and any products, and take legal advice on this where necessary.
- Public perception – how will the collaboration be communicated to the public and, in particular, how will your involvement be communicated? Having a robust communication and marketing plan in place from the outset will alleviate any concerns and set out the expectations on both sides. It is easier to agree this upfront, before legal documents are signed.
- Limits – it is useful for a charity to have a policy in place for collaborations. This will ensure that engagement is carried out consistently; in particular, it can outline the charity’s limits when it comes to negotiation and who is responsible for key decisions, as well as demonstrate that the trustees are actively monitoring risks and opportunities.
- Value – ensure maximum benefit from the collaboration. Remember that, as well as fundraising, the brand may be able to offer value through employees, business skills, contacts, and its network.
- Beneficiaries – how will they be kept front and centre of the collaboration throughout? Make sure that the brand is aware that beneficiaries are the ultimate focus of the charity and look carefully for any conflicts between beneficiaries’ interests and the brand’s focus and activities.
- Privacy and data protection – will donor or customer details be processed lawfully? Does the agreement involve direct marketing? It is important that both parties ask these questions and comply with data protection legislation.
- Tax – make sure that you are clear on the tax implications of the agreement and how this will affect both the charity and the brand. We recommend taking advice on this before entering into an agreement.
Compliance
Establishing the exact legal nature of the collaboration is key. Depending on the structure of the agreement, the commercial partner may either be a professional fundraiser or a commercial participator and the obligations under charity law and fundraising regulations differ between the two.
As best practice, however, the trustees should make sure that the following documentation is in place:
- A written agreement between the charity and the brand, outlining the agreed relationship – ensuring that the terms and duration of the agreement are clear.
- A solicitation statement which must be delivered by a fundraiser (verbally or in writing) before any donation is completed, in order to explain their relationship with the charity.
- A public statement outlining how the collaboration helps the charity to make a positive difference for its beneficiaries.
- Minutes of the trustee meeting, outlining what factors were considered and how the decision was reached, or equivalent details where staff are acting under delegated powers.
- Appropriate explanations in the charity’s annual report about the fundraising arrangements.
Maintaining the relationship
To sustain a successful collaboration, both brand and charity must be honest, transparent and communicative throughout. Consider what measures can be put in place to monitor and reassess the agreement to ensure that the collaboration remains beneficial. A few measures to consider are:
- Checking in regularly with key points of contact and maintaining an open dialogue.
- Monitoring the benefit received on both sides. A professional fundraiser or commercial participator who has an agreement with a charity must, when asked, allow a charity to inspect their books, documents and records relating to the charity (see section 7.3.3 of the Code of Fundraising Practice).
- Putting in place robust termination provisions so that there is the ability to end the agreement if it is not proving beneficial. Consider a trial-period, following which the collaboration is reviewed before becoming permanent.
- Engage employees at both the charity and the brand. This could be achieved through site visits, events or employee secondments and will help to sustain the focus and motivation of the collaboration.
Conclusion
Any collaboration with a brand will pose potential regulatory and reputational risks to a charity. However, the key things outlined in this article will help to mitigate these risks, and ensure both parties reap the positive benefits of working together.
If you would like to speak to our Brands and Charities experts on potential partnerships or collaborations either with a brand or a charity, please do get in touch.
If you’d like to read more, we’ve collated some useful links on the topic below: