Contracts - Practical tips from a charity
perspective
Mayaz Rahman – Head of Corporate and Trusts
Hannah Daft - Business Development Manager
Breast Cancer Campaign
• Breast Cancer Awareness Month – key time for
Cause Related Marketing
• Big business for both parties
• Corporate partnerships ASDA, Debenhams,
Vanish, Pentel
• Use the law to help protect your charity’s brand
"If I was giving a charity advice, I would say do
not compromise your work or your principles
and don't underestimate the power and
importance of your brand, which might actually
be more important than a product brand, even
though it is a market leader".
(Business Community Partnerships: Fact or Fiction? Business
Community Connections, 2001)
How to set up a contract
Risk
• Brand fit/synergy
• Does the company fit with the charity's
ethical policy
• Does the company have 3 years of
annual accounts?
• Exclusivities with current
partners/conflict of interest?
How to set up a contract
Expectations
• What does the company expect the charity to
deliver?
• What resource will the charity need to commit;
PR support, celebrities, social media strategy and
other resource?
• Open and honest discussions from the outset
• Setting a minimum value for the agreement
How to set up a contract
Negotiation
•
•
•
RRP - setting donation level per product
We request a minimum donation of the retail price
from products sold – this serves to prevent cynicism
from consumers and the media
VAT - the donation is viewed by HMRC as a payment
for a marketing service, and therefore VAT has to be
charged on donations received. This VAT is passed
onto HMRC
Valuing your brand and not looking ‘greedy’
Asking for a minimum
•
•
•
Assess ROI
How to say ‘no’, e.g. the charity has limited
resource. Every partnership the charity enters into
needs to maximise funds
Politely decline, offer alternatives, direct the
enquirer to the charity’s donation site
Other agreements
Regional Contracts
• Company only operates in one area
• No guarantee/licensing fee
• Commits them to the activity, approval
process, legal wording and compliance,
termination, payment terms, communications
& marketing activities
• Can either allow or disallow use of our name
and logo dependent on activity
When things don’t go to plan
Breaking contracts
• The charity’s responsibility to ensure all necessary
research and risk analysis has been undertaken prior to
entering into an agreement
• However:
– Not all products will be successful i.e. stockists pull
out
– Not all companies will pay agreed amounts on time
– A company's activity may call them into disrepute
• Cost of initiating legal proceedings for non-payment is
costly and unviable to redeem
• Some may pay once threatened with legal action some
the Charity will have to write-off as bad debt
• Key three things
•
•
•
Don’t underestimate the strength of your
brand, and the benefit this brings to the
company
Complete your due diligence to protect your
brand before entering into the partnership
Assess the ROI, will the partnership make
effective use of the charity’s resource