Commercial Participators, Professional Fundraisers, Sponsorship

As part of its fundraising efforts, a charity may from time to time engage:

• a commercial business to run a promotional venture as a commercial participator; or 
• an independent professional fundraising business, in return for a fee, to solicit donations  or recruit prospective donors to the charity or run other types of fundraising programmes for the charity; or 
• a commercial entity as a sponsor to provide financial sponsorship for an event run by the charity in return for publicity or other sponsorship benefits for the sponsor.

Commercial Participator Agreements

These Commercial Participator Agreements comply with charity law requirements for arrangements with Commercial Participators. A business will, under charity law, be a “Commercial Participator” where it arranges with a charity to promote and advertise its own products or services and donate a share of its profits to the charity. For example, a stationery retailer might advertise its Christmas cards for sale using the charity’s name and logo, stating that a percentage of profits on sales will be donated to the charity. The potential benefits for a charity are: increased public awareness of the charity’s purposes; free marketing for the charity; and media attention raising the profile of the charity which in turn assists in fundraising.

Arrangements between a commercial business and a charity are regulated by charity law when the business is a “Commercial Participator” under charity law. The Commercial Participator and the charity must enter into a written agreement not only setting out the deal between them but also covering some other matters specified by the legislation.

There are four forms of Agreement. The description accompanying each of them indicates the general type of arrangement for which it is designed. The form to be used depends on whether or not the promotion involves sale of a product and whether or not a trading subsidiary of the charity is also to sign the Agreement. Examples of relevant promotions are also included in the Schedule to each form indicating some types of promotion for which it is likely to be suitable. Arrangements for other types of promotion might also amount to an arrangement with a “Commercial Participator”, and so where there is any doubt about this, legal advice should be taken.

Professional Fundraiser Agreements

These Professional Fundraiser Agreements are compliant with the UK GDPR (UK General Data Protection Regulation) and with charity law requirements governing arrangements between a charity and a “Professional Fundraiser”. In particular, charity law requires the Professional Fundraiser to enter into a written agreement with the charity, not only setting out the deal between them but also covering a number of other particular matters specified by the legislation.

A “Professional Fundraiser” is defined under charity law as any person or organisation which carries on a “fundraising business”, i.e. “a business carried on for gain and wholly or primarily engaged in soliciting or otherwise procuring money or other property for charitable, benevolent or philanthropic purposes”.

Examples of situations where a fundraising business would be acting as a “Professional Fundraiser” would be where it is engaged by a charity to secure donations for the charity from new donors by:

• stopping people on the high street and persuading them to sign direct debit mandates for monthly donations to the charity (“face-to-face” donor recruitment) - this example is included in the Schedule to the Professional Fundraiser Agreement (Individual Donors); or
• contacting potential corporate donors or grant-making trusts seeking donations - this example is included in the Schedule to the Professional Fundraiser Agreement (Organisations).

These are only a couple of examples of a fundraising business acting as a “Professional Fundraiser” included in each Schedule to indicate a typical means of fundraising activity for which each template is likely to be suitable. However, other fundraising initiatives or activities might also amount to a charity engaging a “Professional Fundraiser” under charity law. If there is doubt about that in any case, legal advice should be taken.

The benefits for a charity of engaging a Professional Fundraiser may include:

• specialist expertise in developing fundraising strategies
• enabling the charity to gain significant additional voluntary income in the form of donations from individuals, businesses, charitable foundations, or governmental agencies 
• implementation of a particular fundraising programme (face to face, direct mail, online or other) or an event, designed and run by an organisation with expertise and resources which the charity does not have in-house 
• increased public awareness of the charity’s purposes which in turn assists in fundraising

Charity Event Commercial Sponsorship

A business may sometimes pay sponsorship fees to support charities in connection with events arranged and run by the charity in return for publicity for the business.

It is strongly recommended that any charity carefully documents such arrangements to protect its assets and reputation. The form of Charity Event Commercial Sponsorship Agreement provided is written in favour of the charity (to be used by a small or large charity) to cover such financial sponsorship. It provides for a one-off fee paid by a business to sponsor a fairly uncomplicated single charity event. It has provisions protecting the charity, including protection of its name, and limitation of liability in relation to the sponsorship services it is to supply to the business. It also includes protections for the sponsor’s name, logo, trade mark and other rights. Two further forms of commercial sponsorship agreement, written more in favour of the sponsor, can be found in our Event Sponsorship Agreements in our Business folder.

• Commercial Participator Agreement (Product Promotion – Three Parties)
• Commercial Participator Agreement (Non-Product Promotion – Three Parties)
• Commercial Participator Agreement (Product Promotion – Two Parties)
• Commercial Participator Agreement (Non-Product Promotion – Two Parties)
• Charity Event Commercial Sponsorship Agreement
• Professional Fundraiser Agreement (Individual Donors)
• Professional Fundraiser Agreement (Organisations)

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