And Why They May Need A 'Commercial Participation Agreement' (CPA)
I’ve always believed it’s not governments that will change the world, it’s businesses."
Holly Tucker, MBE
Do you want to do something amazing with your business and support a charity?
One sustainable way for businesses of all sizes to support a charity is to raise funds through the sales of products or services.
This is called sales fundraising and it is a powerful way for your business, whether a sole trader or a large company, to make an impact and do some good.
But in order for your business to raise funds for a charity through your sales, there is a legal requirement and this is called a Commercial Participation Agreement.
Sound intimidating? Don't be put off, because your business can actually create this agreement quickly and easily and then be ready to start your sales fundraising campaign.
But before we tell you how your business can do this, it's important to understand what a Commercial Participation Agreement is and why your business must have one with a charity if you want to fundraise for them through your sales.
What is a Commercial Participation Agreement?*
A Commercial Participation Agreement (CPA) is the legal agreement needed by charity law, between a business and a charity whenever any business wants to raise money for a charity through the sales of a product or service. This is important because it protects the charity, and the consumer.
Known as a ‘commercial participator’, a business needs a CPA if they:
- Donate money to charity and tells this to their customers, or
- Encourage sales of their products or services on the basis that some proceeds will go to charity.
The agreement is needed to make sure the charity receives the donation that the business pledges.
It also makes customers aware of what happens to their money before they spend it as businesses must include a Commercial Participation Statement at point of sale to inform the customer that part of their spending will be donated to the charity.
The statement is short, but must include exactly how much will be donated of what product or service, and to which charity e.g '£2.50 from every candle will be donated to WWF-UK.'
What’s involved in a Commercial Participation Agreement (CPA)?
A CPA sets out some basic terms for both parties to agree to. It usually includes:
- Information about the organisations and people involved
- Terms of the agreement i.e how the business will be raising funds and how much the fundraising is likely to generate based on sales forecasts
- Details about protection and privacy
There can also be information about things like responsibility, monitoring, complaints, confidentiality and tax.
Do all businesses need a Commercial Participation Agreement with a charity?
If you want to raise money through your sales, then Yes you do!
Whether you are an Etsy maker or an estate agent, each time you want to raise money through your sales and especially if you want to talk about this with your community or customers then you must legally have a Commercial Participation Agreement in place with the charity you wish to support.
Even if you're a hobbyist, or have a side hustle where you sell something (so not a registered business), and fundraise for charity through your sales, you still need to have the agreement in place. Why? Because there is a commercial advantage for you because you are linking your sales to supporting a charity.
The same applies for charities, when a a business wants to donate money to a charity through their sales, the charity has to set up a CPA with that business.
Why can this be tricky?
For a small business who wants to do good, the idea of a CPA can sometimes be a little intimidating and put them off.
And, although charities really appreciate the support, coordinating the CPA can also be a challenging task for them because of:
- The time it takes to set up a CPA for each business fundraising campaign
- The cost of setting up a CPA, such as paying for a lawyer
- The due diligence involved in researching the background of the business to make sure the business aligns with the charities ethics
- Limited people and resources available.
A digital solution...
That's where we step in.
Thousands of charities want to make sales fundraising easier for businesses and so use our platform to make it simpler for businesses to create these agreements and raise funds for their causes.
In a matter of minutes, businesses can create their Commercial Participation Agreement for the charity they care about via our easy to use donations form.
We also generate a unique Commercial Participation Statement for each business which can be used at point of sale and then the businesses can have fun telling their customers, and community all about the good they are doing!
It gives peace of mind for charities and means they can receive donations and feel confident that they’re protected. And both can enjoy the benefits of sales fundraising knowing the the complex legal stuff is under control!
Read more about how we create Commercial Participation Agreements in our FAQs.
*This is the law in England, Wales and Scotland. Northern Ireland doesn’t have the same law, but it’s good practice for charities to follow the legal requirements of the rest of the UK.