As the war in Ukraine continues, many charities are working tirelessly to help the estimated 18 million people affected by the conflict.
Globally, commercial and other organisations are putting forth their best efforts to fundraise and support those affected by the crisis. Charities can collaborate with these organisations to achieve the same outcome by:
- Fundraising, donating, or making grants to the other organisation
- Collaborating to share facilities or deliver common goals/projects
However, are trustees aware of the possible implications when collaborating with charities? In this article, Charlotte Willmore explores the critical areas trustees must consider when collaborating with other organisations to help during a humanitarian crisis.
Charitable objects
A charity’s objects are its governing document and supply a statement of its purpose(s) which must be exclusively charitable.
For existing charities, there is a risk of objects slipping in the impetus to do good. Trustees must consider whether their existing charitable objects, as defined in the original governing document, allow them to help.
If, for example, the governing document has restrictions over a defined geographical area or beneficiaries, both implicit and explicit, the charity must comply with these restrictions.
While a charity may change or widen its aims, in most cases, this will require prior approval from the Charity Commission.
If you make any changes, you must show how these are in the interest of the charity and beneficiaries. Trustees should consider the long-term impact of changing the aims and the effect it may have on current and future beneficiaries.
Carefully consider and document all decisions. If changing the charitable object is the best option, the Charity Commission has issued guidance on amending the governing document.
Assisting other charities
Charities can assist other organisations in multiple ways, though with the proviso that any collaboration or funding provided must still be in the best interest of your charity’s beneficiaries and continue to further your charity aims.
If the trustees decide that a formal collaboration is the best option, conduct and document careful consideration and proper due diligence on the chosen partner organisations. Following the “know your partner” principles will help when working with organisations that will receive grants.
All collaborating parties must put in place a written agreement that sets out the following practicalities:
- The purpose(s) of the collaboration
- Whether the funds will form a separate charitable fund
- How the parties are utilising funds and resources
- Establish the processes, roles, and responsibilities
- Detail what will happen with any surplus funds
- How long the arrangement will be in place for
- Any accounting and reporting requirements
By taking this route, established charities will avoid duplicating administrative efforts when setting up new operations, keep costs down and, make the best use of funds.
Your charity can also look at fundraising on behalf of another charity.
In this instance, you will need permission from the charity they wish to raise funds on behalf of. If there is a formal agreement in place, the fundraising charity should explain to donors the purpose and application of the funds raised.
What are the six principles for fundraising activities?
These are defined by the Charity Commission, and are as follows:
- Planning effectively by agreeing and monitoring the approach to fundraising in advance
- Supervising fundraisers by having clear, defined systems in place for all fundraising activities, both domestic and international
- Protecting reputation, money, and assets through robust management of charity assets and resources
- Identifying and complying with laws and regulations such as data protection, licensing, Charities (Protection and Social Investment) Act 2016
- Identifying and following recognised standards as set out in the Fundraising Regulator’s Code of Fundraising Practice
- Being open and accountable through complying with accounting and reporting requirements as well as within fundraising communication
You may find that a more simplistic approach is to provide grants to other charitable organisations where the governing document allows.
However, this is not without risk. Any decisions made must be documented and recorded in minutes showing trustee approval. Trustees must monitor the use of funds, ensuring they are used appropriately for the specified causes, especially for overseas funding.
Where the chosen charity causes are not in line with the charitable objects of the charity in which they are a trustee, there is nothing to prohibit trustees from personally donating to charitable causes.
Are you setting up a new charity to assist causes?
The Charity Commission has confirmed that they will prioritise applications to register charities with objects relating to Ukraine’s crisis.
However, if another charity is already running efficiently, the Charity Commission will encourage people to support already-established registered charities as these humanitarian charities have more experience with emergency and relief appeals.
Careful thought and consideration are required when setting up new charities, especially as the appointed trustees have many responsibilities.
Impact of a significant increase in funding
If a charity receives additional, substantial funding, there may be practical considerations.
Trustees must carefully consider whether the current policies and procedures are still suitable, including financial controls and management. Any decisions must be documented and evidenced.
Are your actions in line with your charitable objects, or do you require help with any governance implications? Do your trustees need professional guidance for charity collaboration? Are you looking for advice to set up a new charity?
Our expert charities team can help. You can get in touch here.
