With budgets stretched and charities under pressure to care for even more service users, more and more groups in the charity sector are exploring collaborative ways of working: finding ways of pooling their resources to achieve shared aims.
However, before charities seek to ‘tie the knot’ in a working “partnership”, there are a couple of key points that they need to bear in mind. I’ve found that when charities look at getting together, there’s a lot in common with the dating game: it works best when both parties have the same expectations about what they’re getting in to, when they’ve done suitable ‘due diligence’ on their potential new ‘partner’ and where it’s clear to both parties how the success of such a venture will be measured.
Jenny Ebbage of Edwards & Co Solicitors
It’s important that there is a cool and analytical assessment of the reason for two organisations to work together in the first place. The relationship has to be in line with the charitable purposes or objects of both parties —that are enshrined in the constitution of each charity. If trustees breach this, they could find themselves personally liable for any losses that the charity incurs.
One of the less well-known principles of any kind of contracting is that it has to be in both parties’ interests- there has to be ‘mutual value’: it needs to be clear what both parties are gaining from the exchange and that needs to be totally clear in any agreement.
Something charities also need to work through is how formal or informal the commitment will be; indeed how long it is intended to last. Agreements can be as simple as a memorandum of understanding (between two organisations XX) right up to the formality of a full-blown merger (two organisations becoming one) but the legal structures have different implications in terms of how the joint working will be run.
Remember – in a legal context being ‘partners’ means something very different than two organisations happening to get on well with one another! One thing, however, that is of paramount importance in the collaboration process is that both sides carry out a thorough risk-assessment.
Charities have to be prepared to ask a great deal of difficult ‘what if’ questions — working on scenarios ranging from one party encountering financial difficulties to who is liable in the event of a legal challenge. This can be difficult because no-one wants to countenance the idea of failure before you even start out.
Nevertheless, it’s an essential aspect of the duty of care that those who run charities have to their organisation.
With all that said, charities shouldn’t be put off from considering collaborative working. There are a great many benefits to be gained from such co-operation – greater clout for political engagement or new ways to spread a cost-base.
It can be an excellent way for charities to survive and thrive in a difficult environment. I’ve personally overseen some of the largest charity mergers in Northern Ireland and providing both sides ‘look before they leap’, many charities shouldn’t hesitate in saying ‘I do!’