1. 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
© Birketts 2018

2. 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

3. Fundraising with commercial partners
16 November 2018
Introduction
© Birketts 2018

4. Fundraising with commercial partners
16 November 2018
Types of commercial partnerships
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5. Fundraising with commercial partners
16 November 2018
Commercial participation
© Birketts 2018

6. 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

7. 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

8. 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

9. Fundraising with commercial partners
16 November 2018
Protection of vulnerable people
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10. Fundraising with commercial partners
16 November 2018
Key points for charity trustees
Trustee duties
Code of Fundraising Practice
Fundraising Regulator and Charity Commission
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11. Fundraising with commercial partners
16 November 2018
Sponsorship: key considerations
© Birketts 2018

12. 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

13. 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

14. Fundraising with commercial partners
16 November 2018
Non-primary purpose trading: exemptions
Lotteries
Fundraising exemption
Small-scale exemption
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15. 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

16. 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

17. 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
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18. Fundraising with commercial partners
16 November 2018
QUESTIONS?
© Birketts 2018

19. 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
@LizCharityLaw
Clear Legal Advice Cambridge │ Chelmsford │ Ipswich │ Norwich