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7.Professional fundraisers, commercial participators and partners

When charitable institutions work with external organisations to fundraise, it is important that there is a common understanding of what this arrangement means in practice. This section includes what needs to be set out as part of fundraising agreements to make sure expectations are clear and what paid third-party fundraisers must say to donors when fundraising on behalf of a charitable institution.

Please note: In Northern Ireland there is no legislation relating to professional fundraisers or commercial participators. (However, charitable institutions fundraising in Northern Ireland may decide to follow the legal requirements of England and Wales and Scotland as good practice.)

7.1.Due diligence and conflicts of interest

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

7.1.1.

Before entering into an agreement with a professional fundraiser or a commercial partner you must carry out appropriate checks on them (including on their financial standing and reputation) to make sure you can be confident that they are able to do what you expect them to do and that your relationship with them will not damage your reputation. This is especially important when working with organisations that are not based in the UK.

7.1.2.

You and the third-party fundraisers and commercial partners must give each other full details of any possible, perceived or actual conflicts of interest that you and they are aware of or become aware of, either:

7.1.3.

If your third-party fundraiser has or may have a conflict of interest, you must not enter an agreement with them without the permission of the person or organisation whose interests conflict with theirs. If there is a significant conflict of interests, both parties must consider whether it is appropriate for the relationship to continue.

7.1.4.

Third-party fundraisers must only claim that they have experience, qualifications and achievements if they have proof to back this up.

7.1.5.

If you are placing fundraising content on the website of a third-party fundraiser or commercial partner, you must apply the same care as you would when placing it on your own website. 

For more standards on digital platforms, see section 10 Digital.

7.2.Contracts and agreements

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

7.2.1.

You must have a written agreement in place with any paid third-party fundraiser or commercial partner you work with to fundraise. In England, Wales and Scotland, you must do this if the paid third-party fundraiser or commercial partner you work with falls within the legal definition of a ‘professional fundraiser’ or ‘commercial participator’.

Please see below for more details about what ‘professional fundraiser’ or ‘commercial participator’ agreements and contracts must contain.

7.2.2.

Regulations on contracts can differ between England and Wales, Scotland, and Northern Ireland. You must meet the relevant regulations in each area.

7.2.3.

You must make sure that any third party you work with keeps to the requirements of data protection law and the Privacy and Electronic Communications (EC Directive) Regulations 2003, as set out in the code, including the requirements of the Telephone Preference Service, no matter where the third party is based or operating. 

7.2.4.

You must have review procedures in the agreement. You must consider the third-party fundraiser’s performance at these reviews and decide whether further action is appropriate (such as reviewing the agreement or activating any penalty clauses that may be part of the agreement). In England and Wales, you must meet this standard.

For more standards on reasonable monitoring arrangements as part of a contract or agreement, see section 7.3 Monitoring that fundraisers are meeting the code.

7.2.5.

If the third-party fundraiser will be selling goods or services, there must be a written agreement governing the relationship between the charitable institution and the third-party fundraiser (even if this is not strictly needed under the relevant acts).

  • Before the agreement begins, it must be considered, negotiated and agreed by authorised representatives of both the charitable institution and the third-party fundraiser
  • The charitable institution and the third-party fundraiser must approve and understand the agreement.
7.2.6.

Any change to the contract terms must be in line with the term in the agreement which says how any change should take effect.

Agreements with professional fundraisers

Please note: In Northern Ireland there is no legislation relating to professional fundraisers. (However, charitable institutions fundraising in Northern Ireland may decide to follow the legal requirements of England and Wales and Scotland as good practice.)

7.2.7.

Before asking for money or other property, a professional fundraiser must have a written agreement in place with you. The agreement must be signed by or on behalf of both you and the professional fundraiser.

7.2.8.

The agreement must give:

  • the names and addresses of all the people and organisations the agreement is between (the parties to the agreement);
  • the date on which each party signed the agreement and the length of the agreement;
  • any terms which relate to ending the agreement early or making changes to it;
  • a statement of the main aims of the agreement and how the parties will achieve those aims;
  • terms for paying fees and expenses to the professional fundraiser; and
  • if more than one charity is involved, details of how the funds raised will be shared between them.

England and Wales

7.2.9.

Fundraising agreements between charitable institutions established in England and Wales and professional fundraisers must also include: 

  • details of any voluntary regulatory fundraising scheme or standard that the professional fundraiser has agreed to keep to;
  • details of how the commercial organisation will protect the public from unreasonable intrusion on a person’s privacy, unreasonably persistent approaches or undue pressure to donate; and
  • details of how the charitable institution will monitor the professional fundraiser to make sure it is keeping to the agreement, as set out in section 59 of the Charities Act 1992 as amended.

This may include the monitoring measures set out in 7.3 Monitoring that fundraisers are meeting the code. The terms of the agreement should allow you to read and, where necessary, review any relevant policies and procedures that the professional fundraiser has in place which are relevant to protecting the public. This may include policies on people in vulnerable circumstances, handling complaints and whistleblowing, training materials, and the staff code of conduct.

7.2.10.

If a third-party fundraiser falls within the definition of ‘professional fundraiser’, the agreement must include details of the solicitation statement they need to give and the fees and expenses which the professional fundraiser will be paid.

7.2.11.

Agreements with third-party fundraisers must include clear and realistic expectations of the activities to be carried out, the budget, resources, timings and the possible outcomes.

7.2.12.

You must agree all procedures with professional fundraisers before the fundraising takes place, including procedures for processing donors’ details and producing and using fundraising materials.

7.2.13.

You must make sure it is clear who owns the copyright of all materials and databases connected with the fundraising activity, before carrying out the activity.

7.2.14.

You must give professional fundraisers the information they need about your charitable institution’s aims, and clear guidelines about their behaviour and the different tax reliefs that apply.

Agreements with commercial participators

Please note: In Northern Ireland there is no legislation relating to commercial participators. (However, charitable institutions fundraising in Northern Ireland may decide to follow the legal requirements of England and Wales and Scotland as good practice.)

7.2.15.

If an arrangement with a commercial partner falls within the definition of a ‘commercial participator’, the commercial participator must have a written agreement in place with the charitable institution it proposes to raise funds for, and certain information must be included in this.

7.2.16.

It is against the law for a commercial participator to claim, as part of a promotional venture, that they will give money to a charitable institution, unless this claim is in line with a written agreement they have in place with the charitable institution they are raising funds for. The agreement must be in writing and signed by or on behalf of both the commercial participator and the charitable institution they are raising funds for.

7.2.17.

The agreement must give:

  • the names and addresses of all the parties to the agreement;
  • the date on which each party signed the agreement and the length of the agreement;
  • any terms which relate to ending the agreement early or making changes to it;
  • a statement of the main aims of the agreement and how the parties will achieve those aims;
  • if more than one charitable institution is involved, details of how the funds raised will be shared between them;
  • details of what proportion of the price of the goods or services will be given to you or how much money the commercial participator will donate in connection with selling or supplying the goods or services; and
  • how much the commercial participator will receive as payment or for expenses.
Further guidance

7.3.Monitoring that fundraisers are meeting the code

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

7.3.1.

You must make sure that any paid third-party fundraisers or commercial partners you work with to fundraise keep to the code.

7.3.2.

You must make all reasonable efforts to monitor whether the paid third-party fundraisers or commercial partners are keeping to the agreement you have with them (including the conditions of the contract which relate to keeping to the code).

For the purpose of this code, making all reasonable efforts means that you must carry out effective and proportionate monitoring. This may include:

  • making sure your values are reflected in: 
  • choosing a named person with lead responsibility for monitoring that the requirements of the law and the code are being met;
  • developing clear reporting requirements with the other organisation and regularly reviewing their progress against agreed targets relating to performance, quality assurance and their responsibilities under the law and the code; 
  • defining how monitoring will be carried out, including how often, based on an assessment of the risk posed by the fundraising activity; 
  • approving and regularly reviewing training on keeping to the code, including frequently watching this training being delivered;
  • authorising content and materials for training; 
  • regularly carrying out (and recording the results of) call monitoring, mystery shopping, site visits or shadowing with the other organisation’s fundraisers;
  • setting out a clear policy for handling complaints and feedback, including the time frames, the procedure for making a complaint internally and taking a complaint further, and the procedure for transferring information between your charitable institution and the other organisation; 
  • setting out a clear internal procedure for members of staff and volunteers to report any concerns they have about their organisation’s fundraising practice; and
  • agreeing an action plan with the other organisation to deal with any concerns that are identified.  
Further guidance

Further requirements for England and Wales

7.3.3.

A professional fundraiser or commercial participator who has an agreement with you must, when asked, allow you to inspect their books, documents and records relating to your charitable institution.

7.3.4.

A professional fundraiser or commercial participator must pass on funds to you as soon as reasonably possible, and in any case within 28 days, unless they have a reasonable excuse.

Further requirements for Scotland

7.3.5.

If a Scottish charity has an agreement covering the activities of a commercial partner operating in England and Wales (or if an English or Welsh charity has an agreement covering the activities of a commercial partner operating in Scotland), it must make sure that the contract meets the legal requirements of the country where the fundraising will be carried out.

7.3.6.

In Scotland, if the contract is with a professional fundraiser or commercial participator, it must explain how the contract can be changed. It must include conditions saying that the change needs to be in writing and which prevent one party alone from making an unfavourable change.

7.3.7.

A professional fundraiser or commercial participator must pass on funds to you in line with the Charities and Benevolent Fundraising (Scotland) Regulations 2009 regulations. In Scotland, the funds must be passed on as soon as reasonably possible, and in any case within 28 days of receiving them. The law in Scotland does not allow you or the professional fundraiser or commercial participator to agree otherwise, and this time frame cannot be extended even if the fundraiser has a reasonable excuse for not giving you the funds on time.

7.4.Solicitation (disclosure) statements for paid third-party fundraisers and commercial participators

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

7.4.1.

Professional fundraisers and commercial participators must make a solicitation statement when asking for money or other property or saying that money from a commercial promotional venture will be paid to a charitable institution or used for charitable, philanthropic or benevolent purposes.

Please note: In Northern Ireland there is no legislation relating to professional fundraisers or commercial participators. (However, charitable institutions fundraising in Northern Ireland may decide to follow the legal requirements of England and Wales and Scotland as good practice.)

England and Wales

Professional fundraisers

7.4.2.

Professional fundraisers must make a solicitation statement every time they ask for money or other property on your behalf or for charitable, philanthropic or benevolent purposes. This is the case even if the money is not a pure donation but is given in return for something. 

7.4.3.

The fundraiser must make the solicitation statement either before the donor gives any money or before the fundraiser asks for any financial details relating to the transaction (whichever is sooner).

7.4.4.

Professional fundraisers must give: 

  • the name of the charitable institution they are calling on behalf of;
  • if there is more than one charitable institution, details of the proportions in which the funds will be shared between them; and
  • how their payment (including any payment-in-kind, for example, gift vouchers) in connection with the appeal is to be calculated and the amount of that payment (or, if they don’t know the actual amount, an estimate of the amount calculated as accurately as possible). Employees of a professional fundraiser would have to provide a statement about the payment their employer will receive in connection with the appeal, not the payment they personally will receive from the professional fundraiser (their employer).

Failing to make the correct solicitation statement is a criminal offence. The Cabinet Office published ‘Charitable Fundraising: Guidance on Part 2 of the Charities Act 1992 (2008)’ which includes example wording of statements. For more detailed guidance, you should get professional advice.

7.4.5.

In the case of fundraising where the fundraiser asks for a donation verbally but the person they are asking is not present (such as telephone fundraising), the professional fundraiser must make the appropriate statement during the conversation. Also, within seven days of the donor making any payment of £100 or more, the professional fundraiser must give them a written statement containing the solicitation statement and details of their right to a refund or to cancel the payment. 

7.4.6.

A professional fundraiser must keep to specific requirements relating to the information they must share in connection with television, radio and telephone appeals, including donors’ rights to cancel a donation and receive a refund.  

Commercial participators 

7.4.7.

Commercial participators must make a solicitation statement whenever (and wherever) it is stated or implied in the course of a commercial promotional venture that money will be paid to one or more charitable institutions or used for charitable, philanthropic or benevolent purposes.

7.4.8.

The solicitation statement must give:

  • the name of the charitable institution or institutions;
  • if there is more than one charitable institution, details of how much of the funds will be shared between them; and 
  • the sum (or, if it is not possible to calculate accurately beforehand, the amount believed to be as accurate as possible) of whichever of the following apply.
    • The amount of the cost of the goods and services that will be given to or used for the benefit of the charitable institution or institutions 
    • The amount of any other proceeds of the promotion that will be given to or used for the benefit of the charitable institution or institutions
    • The amount of the donations made in connection with the sale or supply of goods and services that will be given to or used for the benefit of the charitable institution or institutions
7.4.9.

In the case of fundraising by commercial participators, where a commercial participator asks for donations verbally but the person they are asking is not present, the commercial participator must make the appropriate solicitation statement during the conversation. Also, within seven days of the donor making any payment of £100 or more, the commercial participator must give them a written statement containing the solicitation statement and details of their right to a refund or to cancel the payment. 

Scotland

7.4.10.

In Scotland, the standards on solicitation statements apply to and must be followed by professional fundraisers asking for donations, commercial participators making representations and benevolent fundraisers (other than volunteers) carrying out benevolent fundraising.

7.4.11.

Professional fundraiserscommercial participators and benevolent fundraisers (other than volunteersmust:

  • give the name of the benevolent organisation which will benefit;

  • if there is more than one benevolent organisation, give details of how the funds raised will be shared between them;

  • if the funds are for general charitable, benevolent or philanthropic purposes (rather than for a particular benevolent organisation), give details of how they will decide how to distribute the funds; and

  • say in writing if they are being paid (unless they are a benevolent fundraiser and an employee or agent of the benevolent organisation concerned or a company connected to it, and are carrying out the fundraising).

7.4.12.

Professional fundraisers and commercial participators must also keep to the following extra standards.

  • If you make the solicitation statement verbally (but not by speaking directly to and in the presence of the person it is addressed to) or in the course of a radio or television programme, you must explain the donor’s right to a refund or to cancel the agreement under the Charities and Benevolent Fundraising (Scotland) Regulations 2009.
  • If you are being paid for the activity, you must say how your payment will be decided and state:
    • the amount (or the estimated amount) you will be paid as a professional fundraiser; or
    • the amount (or the estimated amount) of the money made from sales or from the promotional venture that you, as a commercial participator, will use for the benevolent organisation or purpose, or the amount of the donation (or donations) that will be made.
  • If you provide the solicitation statement about your pay verbally, you must:
    • if you are making the statement in person, tell any person making a payment that you have the information on your pay available in writing if they want to see it; or
    • if you are not making the statement in person, tell any person making a payment that you have the information on your pay available in writing and will provide it if they ask for it.

It is a criminal offence for a professional fundraiser or commercial participator to fail to keep to any of these conditions, and the trustees of a charity may have broken their duty of care if they do not make statements where appropriate. You can get more information and guidance from the Office of the Scottish Charity Regulator or you should ask for professional advice.

7.4.13.

You must make the statement either before the donor gives any money or before you ask for any financial details relating to the donation (whichever is sooner).

7.5.Fees and payment

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

The following standards apply as well as the general standards in section 2.5 Paying fundraisers.

7.5.1.

Third-party fundraisers who do not fall within the legal definition of a professional fundraiser must state the actual amount and the way the payment is calculated in any proposal or agreement and make completely clear all fees, expenses and other associated costs, how their fees will be calculated and the timescale for payments.

7.5.2.

If the agreement allows payment levels to vary, this must be clearly justified in agreements by referring to the particular circumstances in which different payment levels may apply. If this applies, the agreement must include terms which allow you and the third-party fundraiser to end the agreement before their pay changes.

7.6.Confidentiality

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

7.6.1.

Third-party fundraisers must not share any confidential information they get from you unless that information is already available to the public or they are allowed to share the information by law.

7.6.2.

The written agreement between you and the third-party fundraiser must include terms defining what is considered confidential information.

7.7.Company law and tax

In this section, ‘you’ means a charitable institution, unless we tell you otherwise.

If you are also a company, you must also meet the relevant company law requirements.

7.7.1.

You must understand how your fundraising activities could affect the tax and VAT that your organisation has to pay (if at all) and make sure you pay the correct amount.

For more standards on reasonable monitoring arrangements as part of a contract or agreement, see section 7.2. Contracts and agreements

Further guidance