Charities working with corporate bodies

5th May 2024

Charities have for a long time worked in partnership with commercial partners for many reasons, some of which include outsourcing catering; donor acquisition; project delivery; property management; provision of temporary staff; the list is extensive.

There are many reasons why this is an effective way to manage aspects of the charity’s business from risk management and value for money, to flexibility of bringing on board specialist skills. If you wish to do so either through outsourcing, grant funding or other ways of partnership, then getting it right from the start is important. Charities need to consider the below.

1 – Governance

The choice to collaborate with a corporate partner may not be an easy one to make. Assessing risk, strategic objectives, integration with the charity and contract terms/KPIs can be complex, particularly if the reason for the partnership is because of a lack of relevant inhouse expertise. Being sure of what the objectives are and setting out parameters is key before embarking on any partnership. A good example is the outsourcing of the operation of a care home, or the provision of catering services. The standards, methods of delivery and reputation are almost more important than the price. Clarifying your expectations in any RFP is fundamental to the success of the relationship and this should be set by the trustees.

2 – Procurement

The selection of a partner to work with is not always easy and where there is a limited number of suitable companies, getting it right can be a challenge. Key things to consider are:

  • Setting the scope of the partnership is fundamental and this links with the KPIs and wider expectations you have set from the outset. Find a suitable person to help to project manage the procurement which can either be internal or external.
  • Include in the RFP sufficient detail to make your priorities clear and price/cost should only be part of the consideration.
  • Do your due diligence on the shortlisted providers (even if there is only one). You want to see that they have positive experiences working with charities and that they engage in the operation knowing that cultures align. Go and see them in action and talk to the key people who will be managing the work on your behalf. If you are outsourcing an international project it may seem to be an expensive cost in visiting that country to observe the partner in action, but the consequences of getting it wrong are significant.

3 – Onboarding

Although a corporate partner will be taking the management and delivery of a discreet part of your work, there is always an interface with staff and beneficiaries of the charity and so the corporate partner will be an extension of your staff and management. Bringing them along as such will be critical.

4 – Things to look out for when partnering:

  • Remember that the primary objective of any partner is going to be sustainable profitability and so when choosing the partner make sure that there is demonstrable value for money which is determined at the outset by reference to both quality and price. The more transparent your requirements are, the more likely that the price charged will be fair and the deliverables in line with expectations.
  • The Charity Commission accepts that making grants or other payments to non-charitable organisations is acceptable as long as the payments are to advance the public benefit of the charity to its beneficiaries, and that suitable governance is in place to prevent/manage the risk of fraud and the potential for abuses such as conflicts of interest.
  • Reputation is key – make sure that any references taken, due diligence performed, and parameters set include consideration of how their culture/values align with yours.

For any key decisions made by a charity, of which partnering with a corporate partner may be one, there should be a formalised decision-making process, and the decision-making process should be properly documented.

Remember that for all partnerships there are many considerations to be had. The taking on of a significant partner is a big step and so the preparation and management of this is crucial. Making it easy by setting out the parameters and then managing the relationship will put you in good stead to succeed. Make sure that if it isn’t working, there is enough flexibility put into the contract to make changes, and if it really isn’t working then find out why, and if you need to start again.

Adam Halsey

Partner, Head of Charities
+44 20 7969 5657
View profile

Awards and Accreditations

Accounting Excellence Large Firm of the Year 2023
eprivateclient top accountancy firm 2023

Get in touch