Contracts, Partners and Consultants

Working with freelancers, consultants, and agencies can bring significant benefits to charities. Their specialisms of knowledge, expertise, and capacity can offer charities value for money and be an effective partner in delivering the charity’s mission.

Contracts between partners and charities should clearly state the agreed terms in simple language so that all parties have a shared understanding of the nature of the arrangement. It is important that there is agreement on all of the provisions and terms before signing, including the obligations of both parties, assigning risks and stating the deliverables of the work.

If the contract is with an agency or individual who falls under the definition of a ‘Professional Fundraisers’ - who raises funds from the public on behalf of the charity client as their business – then there are specific regulatory requirements that need to be followed.

There is lots of additional guidance in working with agencies, including due diligence and contracting arrangements in our guidance Successful Partnerships.

It is important for charities to be clear about why working with the consultant will be of benefit to your charity and contribute to your strategy and objectives. It will also help to give a clear brief to the consultant so that they can get a full idea of the aims of the work or project and allow you to agree a programme of work.

Decisions on working with consultants should be fully thought through. An ill-considered or hurried decision is unlikely to produce real benefit and may not be the best use of your charitable resources. Successful fundraising is based on understanding and dialogue between both parties and mutual planning which best uses the expertise of the consultant to further the charity’s mission.

It’s important to understand the areas of expertise and capacity of a consultant when setting a contract so that you can ensure your objectives can be achieved. Be honest and clear about what you expect and also ask relevant questions to avoid a conflict of interest. A consultant should be realistic from the outset about what may be achieved within the designated time and budget.

To be able to work well in a partnership it is important that the consultant knows and understands the needs, culture, and values of the charity. Take time to answer questions and think about what’s appropriate for the partnership – a longer-term relationship for work over a number of months is likely to require greater preparation.

It is advisable for a charity to prepare a written brief on the services you require. This can cover:

• the need and how meeting it will promote the Client’s public benefit objects
• the fundraising opportunity, activities which may realise it and how they will meet the need - this may involve the development and application of a fundraising strategy, or a particular funding requirement; it may be linked to other aims, such as public relations or profile raising; it may require investment; and may identify immediate or long-term realisation
• the type of Provider required - Professional Fundraiser/ Consultant/ both; with what skills and expertise; with what scale of resources, with what geographical focus
• how the proposed engagement is integrated with the overall strategy of the Client (including business planning, budgeting, other fundraising and public relations)
• the resources to be applied by the Client in instructing, supporting and working with the Provider
• an outline of the proposed working relationship and service specification
• a budget taking account of internal time/costs and external costs
• projected results, taking account of uncertainties, contingencies and maximum, medium and minimum expectations
• timescale

The charity should prepare a plan for the recruitment of a partner which includes:

• sources of information on candidates
• information to be supplied by applicants (relevant skills, expertise and experience, CVs, references, proposed approach to the brief)
• information to be supplied to applicants (charity information, outline contract terms)
• how to advertise the opportunity
• tendering procedures (if applicable)
• short-listing, interview and selection criteria and procedures.

It is good practice for the charity to ensure that decisions are taken at the right level within its organisation and with appropriate authority emanating from its Board of Trustees (or governing committee).

Potential partners should provide a written response to the brief (in any required format) covering:

• general fundraising experience
• experience of the particular required activities
• knowledge of the particular fundraising environment
• resources available, including key personnel
• support, information and resources required from the Client
• the basis for the calculation and invoicing of fees and expenses
• anything in the brief which may need revision
• (if appropriate) a developed service specification
• a description of the proposed approach to the work and applicable methodology

Managing risk is really important when contracting with a third party – thinking about both financial risk, as well as reputational concerns.

A charity could be exposed to liability because of a partner (or sub-contractor) acting in its name, or through itself acting on a partner’s bad advice. It is advisable for pre-contract dialogue to aim to ensure both parties are aware of relevant risks and that appropriate risk mitigation measures (including if contractual risk allocation and insurance) are in place.  

The nature, level, or share of risk may have a bearing on methods or levels of payment. For example, in some cases, charities may need to make up-front payments against future return to set up a fundraising programme or make payments that are linked to levels of return. Risk management should continue for the duration of the contract.

Each party should assess its need for legal advice to ensure the contract precisely and fully reflects the actual agreement and meets regulatory requirements. If legal advice is required, this should be taken independently by each party. The greater the complexity, importance, value or risk, the more such advice is appropriate.

It is maybe sufficient to seek advice only on major issues, but the overall coherence of a contract is itself important. Legal advice is most cost-effective if the adviser is given, in good time, a full written description of the proposed working relationship, with notes on critical and outstanding issues. Check the adviser has the necessary areas of expertise. The Chartered Institute of Fundraising provides a helpline which may assist in obtaining appropriate advice.