Fundraising with commercial partners 16 November 2018 Fundraising with commercial partners – a legal overview Liz Brownsell Co-Head of Charities and Social Enterprise Clear Legal Advice Cambridge │ Chelmsford │ Ipswich │ Norwich www.birketts.co.uk © Birketts 2018

Fundraising with commercial partners 16 November 2018 Seminar outline Introduction to commercial partnerships Commercial participation: key legal requirements Sponsorship: key considerations Trading issues in corporate fundraising 15 minutes for Q&A © Birketts 2018

Fundraising with commercial partners 16 November 2018 Introduction © Birketts 2018

Fundraising with commercial partners 16 November 2018 Types of commercial partnerships © Birketts 2018

Fundraising with commercial partners 16 November 2018 Commercial participation © Birketts 2018

Fundraising with commercial partners 16 November 2018 Key statutory requirements Charities Act 1992 (sections 58 – 64) Charitable Institutions (Fund-raising Regulations) 1994 Charities (Protection & Social Investment) Act 2016 © Birketts 2018

Fundraising with commercial partners 16 November 2018 Section 59 Charities Act 1992 (1) It shall be unlawful for a professional fund-raiser to solicit money or other property for the benefit of a charitable institution unless he does so in accordance with an agreement with the institution satisfying the prescribed requirements. (2) It shall be unlawful for a commercial participator to represent that charitable contributions are to be given to or applied for the benefit of a charitable institution unless he does so in accordance with an agreement with the institution satisfying the prescribed requirements. © Birketts 2018

Fundraising with commercial partners 16 November 2018 Key definitions Professional fund-raiser Promotional venture Commercial participator Charitable institution Fund-raising business Charitable contribution © Birketts 2018

Fundraising with commercial partners 16 November 2018 Protection of vulnerable people © Birketts 2018

Fundraising with commercial partners 16 November 2018 Key points for charity trustees Trustee duties Code of Fundraising Practice Fundraising Regulator and Charity Commission © Birketts 2018

Fundraising with commercial partners 16 November 2018 Sponsorship: key considerations © Birketts 2018

Fundraising with commercial partners 16 November 2018 Charities and trading: key principles Sale of donated goods Ancillary trading Non-primary purpose trading Lotteries and some events Primary purpose trading Beneficiary trading © Birketts 2018

Fundraising with commercial partners 16 November 2018 Non-primary purpose trading: definitions Charity Commission: ‘Non-primary purpose trading’ is trading intended to raise funds for the charity, as distinct from trading which in itself furthers the charity’s objects. Charities may engage in such trading only where no significant risk is involved. HMRC: Non-charitable trading is trading which doesn’t fall within [primary purpose trading] or [trading mainly carried out by beneficiaries] but which is undertaken to raise funds to be applied for charitable purposes. © Birketts 2018

Fundraising with commercial partners 16 November 2018 Non-primary purpose trading: exemptions Lotteries Fundraising exemption Small-scale exemption © Birketts 2018

Fundraising with commercial partners 16 November 2018 Small scale exemption Current limits From April 2019 Gross annual income of the charity Max income from non-primary purpose trading Under £20,000 £5,000 £20,000 - £200,000 25% of charity’s total incoming resources Over £200,000 £50,000 Gross annual income of the charity Max income from non-primary purpose trading Under £32,000 £8,000 £32,000 - £320,000 25% of charity’s total incoming resources Over £320,000 £80,000 © Birketts 2018

Fundraising with commercial partners 16 November 2018 Fundraising exemption Qualifying events Clear objective = fundraising Max. 15 of same kind in same location each year Organised by charity or trading subsidiary No restrictions on type of event An ‘event’ not a regular activity VAT exemption on sale of goods or services at or in connection with the event Profits from sales by charity exempt from corporation tax (or income tax for trusts) No VAT chargeable on sponsorship © Birketts 2018

Fundraising with commercial partners 16 November 2018 Trading issues in corporate partnerships Role of trading subsidiary in contractual arrangements Significant risk? Licensing of name and brand © Birketts 2018

Fundraising with commercial partners 16 November 2018 QUESTIONS? © Birketts 2018

Contact me Liz Brownsell Senior Associate 19 CHARITY TRUSTEE AND REFRESHER TRAINING Contact me Liz Brownsell Senior Associate Co-Head of Charities and Social Enterprise liz-brownsell@birketts.co.uk 01473 406383 @LizCharityLaw Clear Legal Advice Cambridge │ Chelmsford │ Ipswich │ Norwich www.birketts.co.uk