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Fundraising, Grants and Charity Finance

Commercial Fundraising and Sponsorship

Use this section when a business or a paid fundraiser is going to raise money for your charity. These arrangements are valuable but they are regulated. Charity law requires a written agreement containing prescribed terms before a professional fundraiser or a commercial participator raises funds on a charity's behalf. The agreements in this section are drafted with those requirements in mind.

What is a commercial participator?

A commercial participator is a business that tells its customers that buying its product or service or taking part in a promotion will benefit the charity, for example a shop that donates a percentage of sales. There are four Commercial Participator Agreements: two for promotions of a product and two for other promotions, each available in a two-party version between the charity and the business or in a three-party version for use where a third party is also involved in the arrangement.

What is a professional fundraiser?

A professional fundraiser is a person or organisation paid to raise money for the charity, such as a telephone or street fundraising agency. The Professional Fundraiser Agreement (Individual Donors) is for a fundraiser approaching members of the public. The Professional Fundraiser Agreement (Organisations) is for a fundraiser approaching businesses and other organisations.

What about event sponsorship?

Where a business sponsors a charity event in return for publicity, the Charity Event Commercial Sponsorship Agreement sets out what each side will provide, how the sponsor's name can be used and what happens if the event is cancelled. Gift Aid declarations for individuals sponsoring a participant in an event are a different matter and are in the Donations, Gift Aid and Other Fundraising section.

A charity's own employees and volunteers who raise funds are not professional fundraisers for these purposes. Guidance for them is in the Appeals, Collections and Volunteer Fundraising section.

Commercial Fundraising and Sponsorship is part of Charity. Just £38.50 + VAT provides unlimited downloads from Charity for 1 year.

Frequently Asked Questions

What is the difference between a commercial participator and a professional fundraiser? +
Who is doing what for money. A commercial participator is a business promoting its own goods or services on the basis that some of the price benefits your charity, think charity-branded products. A professional fundraiser is paid to raise funds for you as their service, soliciting donations from individuals or organisations. Both relationships are regulated by the Charities Act 1992 and both need compliant written agreements, but the prescribed content differs, which is why this section has separate agreement sets.
What must our agreement with a commercial participator or professional fundraiser contain? +
The prescribed essentials: the parties and the venture, how long it runs, how the charity's share or the fundraiser's remuneration is calculated, and arrangements protecting the public from unreasonably persistent or pressured approaches. An agreement missing prescribed content leaves the fundraising unlawful, the charity cannot simply waive the defect. The templates here are built around the statutory requirements in product and non-product, two and three party variants, so the compliance is structural rather than remembered.
What do customers legally have to be told when a business fundraises for us? +
A solicitation statement at the point of solicitation: the charity's name and, for a commercial participator, the notifiable amount, in practice how much per sale or in total goes to the charity, stated clearly rather than buried. Where the representation is made remotely, by phone for example, and someone pays 100 pounds or more, a written statement must follow within seven days. Vague per-sale claims like profits go to charity fail the requirement. The agreements here carry compliant statement wording.
A company wants to sponsor our fundraising event. Is that the same as commercial participation? +
Not necessarily, and the difference decides your paperwork. Pure sponsorship, money in exchange for branding and hospitality at your event, is a commercial arrangement documented by a sponsorship agreement. It becomes commercial participation when the sponsor represents to the public that buying its products or services benefits the charity. Many deals mix both, so check what the sponsor will say publicly before choosing documents. The event sponsorship agreement sits alongside the participator agreements here for exactly that reason.
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