It's Friday – and it's the end of Trustees' Week. Each day, we've been looking at the elements of the Trustees' Week slogan: Many voices. Working together. With purpose.
Today, Tora Pickup, Charity Lawyer and Principal Associate, focuses on "Working Together".
There are lots of ways that charities can work with different organisations. The focus is often on carrying out charitable activities, but it can also provide financial efficiencies. There is a range of formality with which such arrangements can be structured, and we've flagged a few below.
What works best for a charity will depend on the circumstances, and we might not have covered the right thing for your charity here, so if you have any queries about what might be best for you, please do get in touch.
Shared facilities
It might be the case that a charity needs access to a particular facility, or member of staff, but can't justify or afford to purchase and maintain that facility or employ that member of staff on its own. In that case, trustees should consider whether other charities are in a similar position and might want to share resources. Such arrangements could be set up so that one charity acquires the facility or hires the employee, and the other leases the facility or seconds the employee for the time they need.
In such cases, the risk lies more with the acquiring/engaging charity. Alternatively, the facility or employee could be acquired or employed jointly. In both cases, the arrangements must be properly documented.
Each charity's trustees will want to ensure that their charity's position is effectively protected and that any risk arising from the arrangements is identified and mitigated as much as possible. For example, any confidential information and/or personal data held by one charity and accessible by a joint/shared employee needs to be effectively controlled between the parties, and line management needs to be clear.
Joint ventures
There might be occasions when a particular element of a charity's work aligns with the activities of another charity or organisation. In such cases, the organisations (which might, but need not, be charitable) could join together to work on a particular project. In these cases, the charities remain independent entities but carry out certain activities collaboratively.
For example, two charities, each established as 'friends of' different museums in Birmingham, might run a single fundraising event to support the respective museums.
The combined resources for the event could result in a more successful appeal and raise the profile of each museum among the usual donors of the other. When entering into this kind of arrangement, the trustees of both charities will need to formally document how the costs and funds raised will be divided (and the allocation of funds raised should be made very clear to all donors too), as well as other aspects such as which entity is responsible for each task, how decisions will be made and for how long the arrangement will remain in place.
Similar considerations apply where the joint venture is about carrying out charitable activities. In such cases, it is particularly important that the joint activity is within the objects of all participating charities.
Merger
Sometimes, especially where less formal arrangements have been particularly successful, it might be in the best interests of two or more charities to merge to create a single organisation.
This can bring efficiencies in terms of staff and facilities, allowing greater expenditure and focus on the charitable activities. There are various ways in which such a merger can be structured. For example, one charity could transfer its assets and activities to another, or a new charity could be established to which all merging entities are entitled to transfer their assets and activities.
This restructuring is the most formal of arrangements and would be used only where the changes are intended to apply indefinitely. While this can provide excellent opportunities for all parties, there are lots of things to think about. As with all charity decisions, such a change in structure must be in the charity's best interests and further the charitable benefit it provides.
Considerations will include the objects of all entities, and ensuring that assets can be freely used after the merger will require some care. It's also important for the long-term success that existing donors and relevant communities are brought along with the process and aren't made to feel excluded.
The parties should also have a clear idea about how the merging charities' identities will be continued in the merged entity, about which facilities will be required for the activities of the merged charity, and how the employees from all merging organisations will be combined into a single happy and effective workforce.
The Charity Commission provides some helpful information about collaborations, and we'd be very happy to help if you think that collaborating would be a useful approach for your charity.
Now that we've reached the end of Trustees' Week, we want to thank all trustees for the work they do. We know that, while rewarding, it can be a difficult role. Trustees take their responsibilities very seriously, and we're pleased that we get the chance to support them in carrying out their valuable role.
