Sometimes, a situation comes up for a charity or non-charity to do good, but they don’t quite have the resources, capacity, or charitable status to make the most of the opportunity.
Maybe a non-profit has a donor who wants to support them, but that donor wants a tax receipt (remember, non-profits aren’t able to issue those). Maybe a charity needs a bit of help to fulfill its charitable mission by offering activities a bit different from those that it normally runs.
What then?
Time to work together!
Charities and non-charities can work together in ways that give each half of the partnership a bit more capacity to do good in the world. But there are a few things to keep in mind to make the most of your partnership and keep everything by the book.
What exactly is a non-charity?
The simple answer is anyone who’s not registered as a charity by the CRA. This could be non-profits, incorporated businesses, or individuals.
(For the full run-down of the difference between a charity and non-profit, see our guide.)
The four types of partnerships
There are different types of partnerships a charity and non-charity can enter into, depending on the need:
1. Agency Partnership
In this type, a charity uses a non-charity “agent” to carry out activities on the charity’s behalf, which are often funded or supported by the charity. This is most common when a charity needs staff or resources to provide activities in an area they can’t reach geographically.
2. Contract Partnership
A charity hires an individual or organization as a contractor to provide specialized services that the charity does not have within its own organization.
3. Joint-Venture Relationship
In a joint venture, a charity and non-charity each contribute resources and provide services to meet the goal. However, the charity would still maintain enough authority and responsibility to dictate and account for how the resources are used (though, ideally, the decisions about how resources are used would still be made jointly).
4. Co-operative Venture Relationship
Similar to a JVR, both organizations work together and contribute jointly to complete a project. However, in this partnership, each organization maintains responsibility for and uses their own resources to complete their part of the project.
An important note: for the first three types of partnerships, charities are responsible for monitoring and regulating the funds, as well as ensuring that the non-charity’s work aligns with their charitable mission. Otherwise, they can’t issue tax receipts for the work!
Once you’ve considered what type of partnership might work for you, here are a few questions to ask before entering into an agreement.
Some questions for charities to ask before partnering with a non-charity
- Will partnering with a non-charity help you achieve your charitable goals?
- Do you have the capacity to support and oversee the proposed partnership?
- Are the activities of the non-charity considered “charitable” by CRA?
- Do the activities of the non-charity align with your charitable mandate?
- Does the non-charity have the capacity, resources and abilities to deliver the services you require and hold up their end of any contract?
Some questions for Non-Charities looking for charity partners
- Are your activities a good fit with the charity’s mission?
- Are the administration costs reasonable for the support the charity is providing? Some charities will charge a percentage or flat rate fee to non-charities to cover costs related to administering the relationship.
- Does the charity have the resources and administrative capacity to support the project?
- Does the charity offer the level of support the project needs in:
- Governance
- Programmatic oversight
- Financial oversight
Contracts and Agreements
Time to make it formal! Templates for charity and non-charity contracts and agency agreements can be found online. You can find further guidance on what should be included in contracts and agency agreements on the Charities Directorate’s website.
Like everything in the charitable sector, care and attention are key to formalizing a partnership between a charity and a non-charity. We advise having a lawyer or other professional draft or review your agreement or contract to ensure it is accurate, functional and legal.
Need help figuring out a partnership? Give us a call and we’ll walk you through it.
