Guidance for charitable institutions working with commercial participators

Charitable institutions must carry out the necessary due diligence before entering a relationship with a commercial participator and ensure that any conflicts of interest are appropriately addressed.  

Charitable institutions must have a written agreement with any commercial participator they work with. These agreements are commonly referred to as Commercial Participation Agreements (CPAs) and must be signed by the charitable institution and the commercial participator. A CPA must be in place before a commercial participator begins any promotion which makes representations that contributions will be given to a charitable institution.  

All CPAs must include the following:  

• The names and addresses of the charitable institution and the commercial participator. 
• The date the CPA was signed and how long the CPA is expected to last for. 
• If the CPA can be amended or ended early, details as to how this can be done and by whom. 
• A statement of the main aims of the CPA and the methods to be used to achieve those aims. Additionally, in relation to each method, a description of the type of contribution which will be made to the charitable institution and a description of the circumstances in which these contributions will be made. 
• How much the commercial participator will be paid (if anything) in expenses and the method by which that amount will be calculated. 
• How much the charitable institution will receive from the commercial participator, either as a fixed amount (e.g. 10p from every £1) or in percentage terms (10% of sales).  
• If more than one charitable institution is involved, details of how the contribution from the commercial participator will be shared between them. 

If the CPA involves charitable institutions registered in England and Wales, it must also include details of:  

• Any voluntary regulation that the commercial participator has agreed to be bound by (such as being registered with the Fundraising Regulator and so being bound by the code). 
• How the commercial participator will protect people in vulnerable circumstances and the wider public from unreasonable intrusion on their privacy, unreasonably persistent approaches or undue pressure to donate.  
• How the charitable institution will monitor the commercial participator to make sure it is keeping to the CPA.  

Although not strictly a requirement in Scotland, it would be considered good practice to include the above in the CPA.

Charitable institutions must monitor commercial participators to ensure that they are complying with the terms of the CPA for so long as it lasts. Charitable institutions must also make sure that commercial participators comply with the code. 

If you are a charitable institution in England and Wales with an income of over £1 million, you must also comply with certain reporting requirements regarding your relationships with commercial participators. For further details, please see our Fundraising reporting requirements guidance.  

The CPA between the charitable institution and the commercial participator must be in place before the promotion starts. It is unlawful for a commercial participator to represent that contributions will be made to a charitable institution without a signed CPA being in place. The relevant charitable institution may apply for an injunction to stop any such promotion.  

Solicitation statements are statements that commercial participators must give whenever they promote their goods or services on the basis that they will make contributions to a charitable institution. These statements should be given before the donor gives any money or other property. 

These statements must outline the relationships between the commercial participator and the charitable institution they are fundraising for and explain how the fundraising will benefit the charitable institution. Solicitation statements can be given verbally or in writing.  

Solicitation statements for commercial participators working with charitable institutions registered in England, Wales and Scotland must include: 

• the name of the charitable institution 
• if there is more than one charitable institution, details of how funds will be shared between them; and 
• the method that will be used to determine the sum that will be given to the charitable institution based on whichever of the following apply: 
• the proportion of the price paid for the goods and services 
• the proportion of the profits 
• the proportion of any other proceeds of the promotion; or 
• the amount of any contributions made in connection with the supply of the goods and services. 

A commercial participator may make a representation verbally and the person they are making the representation to is not physically present (such as in telephone sales). In this situation, the commercial participator must, within seven days of the person to whom the representation is made, when making a payment or entering into an agreement to make a payment of £100 or more, give that person a written solicitation statement which also explains that the person can: 

• Cancel the agreement (if relevant) by written notice to the commercial participator within seven days of receiving the written statement.  
•  Request a refund (if the payment has been made) by written notice to the commercial participator within seven days of receiving the written statement.  

When a representation is made during a radio or television appeal, a person making a payment of more than £100 can cancel their payment by giving notice in writing up to seven days after the date on which the request is made. The commercial participator will then need to refund the payment. The solicitation statement which accompanies the radio or television programme must include details of this right. It is also good practice to extend these rights to any requests for donations which are made via video, e.g. on social media. 

Solicitation statements for commercial participators working with charitable institutions registered in Scotland must also state whether the commercial participator will receive any payments (and the method of calculating these payments, or the amount or estimated amount of these payments) from the charitable institution as part of this fundraising. Also, if a solicitation statement is made verbally, the commercial participator must inform the person making the payment that this information is available in writing upon request. 

Commercial participators should consider – and if necessary take advice – as to the form their solicitation statement needs to take. In England and Wales, the Cabinet Office: Guidance on Part 2 of the Charities Act 1992 includes examples of solicitation statements in Annex B. In Scotland, commercial participators should refer to OSCR’s Technical Guide on the Charities and Benevolent Fundraising (Scotland) Regulations 2009 

In England and Wales, solicitation statements could take the following forms: 

“[£x] of the purchase price from each book sold will be donated to [charitable institution].” 

“[Prize draw company] will donate 50% of the profits from each prize competition to [charitable institution]. This is expected to be at least £x.” 

In Scotland, solicitation statements could take the following forms: 

“[Charity bag company] will donate [£x] to [charitable institution] for every tonne of textiles collected. [Charity bag company] will receive [£x] from [charitable institution] as part of this fundraising.”  

“[Musician] will evenly split the profits from ticket sales for this event between [charitable institution 1] and [charitable institution 2]. [Musician] will not receive any payments from [charitable institution 1] or [charitable institution 2] as part of this fundraising.” 

Commercial participators must monitor their activities and the conduct of their employees in accordance with the CPA. 

Commercial participators must report to the charitable institution in accordance with the CPA. 

Commercial participators must on request and at all reasonable times make available to the charitable institution any books, documents or other records (however kept) which relate to the charitable institution and are kept for the purposes of the written agreement.  

If commercial participators receive money or cheques which are payable to the charitable institution, they must pay these over to the charitable institution as soon as possible and within 28 days of receipt. (In England and Wales, they may pass on funds after 28 days if this has been agreed with the charitable institution).