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OVERVIEW: Auspicing: Partnerships, Permissions, and Power


THE TAKEAWAY: Joining with other agencies to apply for grants involves you in a skein of relationships and responsibilities.


There are a range of reasons why such cooperation may be a good thing. Having a widely-based consortium demonstrates that you've got wide acceptance in the community, access to necessary expertise, good project management skills, and fewer competitors, all of which are considerations that have considerable weight with grantmakers. Grantmakers are now in fact often demanding such consultation and consolidation in the terms of the grant.


Auspicing

Another reason why you might need to join up, though, is that your group needs to be auspiced by another organisation.

If you're not eligible for a grant to do something in your area, then you can sometimes remedy this by working with an organisation that is eligible. Some organisations provide an umbrella for groups that aren't incorporated. Some provide a tax-deductible pathway to get money to a group that doesn't have Deductible Gift Recipient (DGR) status.


Can you collaborate with a DGR?

It sometimes happens that you have an offer of funding from someone who can only give to an organisation with DGR status. If this happens, it's worth looking around to see if there are any DGR charities working your side of the street. It may be that if something you want to do comes under a charitable heading you can work together on it - you provide the staff and venue, say, and they provide a tax-deductible umbrella.

There are some DGRs that have been set up specifically for this purpose.

The Australian Sports Foundation, for example, was set up by the Federal Government in 1986 to get more private sector funds for sport, given that sporting organisations generally can't claim tax deductibility status in their own right. You can make tax-deductible donations to the Foundation, and the Foundation will pay them out again to a sports project run by the organisation you name - and this includes helping state and national sporting organisations, local clubs, schools and community groups to build new club rooms, upgrade their oval's lighting, fund their team's travel to national championships, get new gym equipment, or host a major event. Donations can also be received by the ASF from Private Ancillary Funds and other DGRs that are required to distribute funds.

If your organisation and project meet the ASF's guidelines, you may be able to register your project with the Foundation to seek tax deductible donations, which can provide your organisation with additional fundraising possibilities (the application form is available online).

Other bodies with DGR pass-through powers that your organisation can investigate include:


Criteria

If you are not able to register with a group like the ASF you may want to turn for help to another DGR colleague in the not-for-profit sector.

Many groups look on auspicing as a formality, a triviality, a way to get funding through a friendly charity on a nod and a wink. This isn't the case.

Organisations that have DGR status, for example, have that status because they've undertaken not to spend their money on activities that aren't, in the most technical sense, charitable. They can't fund anything you want to do; they can only fund those bits of what you do that can be brought under their own charter. This may be easy, or difficult, depending on how closely your aims match. A lot of projects are always going to fall outside the guidelines.

Nonetheless, even if what you want to do isn't charitable in the narrow sense it's still worth checking some charities out to see who's interested. Someone may be prepared to cut you a bit of slack. Because while you can't become a charity simply because some of the things you do are charitable, it's also true that a charity doesn't lose its charitable status simply because some of the things it does aren't charitable.

If an organisation's primary purpose is strictly and legally charitable, it's allowed to do other things related to the furtherance of that primary purpose. Alternatively, one of your donors might be able to give money to them that they then pay to you for the services you're providing for a joint project. Alternatively, you might just ask them to take over the project altogether and cut your expenses.


Get it in writing

It's important to have your inter-agency arrangements regulated by a comprehensive agreement to prevent misunderstandings and disputes.

Some co-operative relationships you can work out for yourself, picking language that covers the essentials, gives something to everybody, and doesn't give away the farm.

There are some occasions when these inter-agency agreements have to take even more weight. Whatever the reason you're seeking auspicing, there's always the possibility that your idea of what's involved isn't the same as that of your prospective partner/s. The agreements have to be designed with care, because there's a chain of responsibility to be organised.

The entity at the top of the line (let's call them A) is giving the money (or the DGR privileges) to the auspicing organisation (B), which is giving it to the group at the coalface (C). The top - A - doesn't have any contract with the bottom - C - and hasn't got a comeback against C if things go pear shaped. The only remedy A has is to take it out of B's hide. B is therefore taking the risk, if any, and needs to have insurance - provisions in the agreement that will enable it to intervene where necessary to keep things on track.

If you're A, you need to be able to draw up a contract that will make sure that you have somebody who will suffer if there's a breach of the terms.

If you're B, you need to be able to pass that potential pain on down the line rather than having it stop with you. You're in a strong bargaining position here, because C can't do anything without you. Use this power to make an agreement with C that's able to be monitored and enforced (and, while you're at it, make sure the agreement has C standing the cost of any necessary administration you've got to do. Don't pass all the money down, or you're out of pocket.)

If you're C, check around to see if there any other alternative auspicers, just to shore up your negotiating position.

Financial auspicing can run in tandem with many other forms of not-for-profit partnership - sharing of physical resources, mentoring, social entrepreneurship. All these can be worked out between the parties. Tax-related auspicing, on the other hand, involves bringing into the relationship the 800-pound gorilla that is the Australian Tax Office, and all parties are under considerable constraints.

It's important to note, too, where the strength lies in this relationship. The auspicing body generally holds the better cards. They have legal powers the actual project administrator doesn't, and they're one step closer to the source of the money. B is doing C a favour, not the other way round, and in general, what B says goes. DGR status is very hard to get in this country, and those that have it can leverage it into considerable influence.


Negotiating

It's easy for two partners in an auspicing agreement to find that things aren't working out the way they expected. What seems to one party like inefficiency can seem to the other like muddling through. What seems like monitoring to one can seem meddling to the other. In good times nobody bothers about who does what; in bad times everybody is treading on each other's feet and shouting.

Try to anticipate any hypothetical disagreements ahead of time, and try to draw up an agreement that's expansive enough to cover them. In the worst-case scenario, what happens?

Click here for more tips on how to negotiate effectively.

It's not possible to draw up a standard agreement that will cover all cases. The agreement will need to be adjusted to meet the needs of the parties and the project. Nonetheless, all these agreements will need to contain:

And may need to contain provisions covering:


Agreement Checklist


Agreements relating to every project partnership arrangement should deal with: