Grant by a Charity to a Non-charity

Agreement for Grant by a Charity to a Non-Charity Organisation

CO.CHA.43

This Agreement for Grant by a Charity to a Non-Charity Organisation is for use where a charity (whether or not it is registered with the Charity Commission) provides a grant to an organisation which is not a charity in law. The recipient of the grant may be a voluntary, social enterprise, public sector, or commercial organisation. 

A non-charity organisation, although not a charity, can receive and use grant funding from a charity to implement the charitable purposes of that charity if the charity follows the Charity Commission’s guidance on giving grants to a non-charity (last updated by the Commission in August 2017). This template takes into account that guidance. It is important to note that the guidance requires more than simply using an appropriate form of agreement, and so we strongly recommend that you read the guidance in full before offering a grant to a non-charity or using this template.

The Charity Commission’s guidance stresses in particular the need to carry out proper due diligence into the recipient organisation to ensure that in all of the circumstances it is appropriate to issue a grant to it for it to carry out the activities.

If however your charity is intending to provide a grant to an organisation that is a charity (whether or not the recipient is registered with the Charity Commission), you should instead use one of the two accompanying forms in this subfolder for a charity giving a grant to another charity, either the long or the short form agreements. Please see the descriptions accompanying those forms which explain which of them you should use where the grant recipient has charitable status in law.

Comments on Clauses

Clause 1: The definition of the “Activities” can easily be edited to cover the nature of the activities, services or project to be funded by the grant, but the details of the activity will need to be set out fully in the “Proposal” and a copy of the Proposal should be attached to the Agreement as a Schedule. The definition of the grantor’s “Charitable Purposes” will need to be carefully completed where indicated.

Clause 2.3: This provides for payment of a single lump sum grant or grant instalments.

Clause 2.7: This and other clauses provide for “clawback” of some or all of the grant where that is appropriate. See also Clauses 2.8, 2.11, 7.3, 9.1, and 10.2. Other provisions provide for suspension of further grant instalments.

Clauses 3.1 and 8 are included to clarify that any payment by the grantor is intended to be a grant, not a contractual payment in return for the carrying out of the activities.

Clause 4: This includes important monitoring provisions to ensure that the grantor receives, or can obtain, reports and other information on the use of the grant and the grant funded activities.

Schedule: Where the charity is funding activities which bring the recipient of the grant into contact with vulnerable individuals or the recipient will be acquiring goods or assets with any of the grant funding, the additional provisions in the Schedule relating to those matters should be included. If not, delete as necessary.

The document is in open format. Fields should be completed and wording in square brackets is optional and can be deleted or retained according to requirements.

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