Hey everyone, so Charity X is working on this cool project where they refurbish old tech and set up community hubs for free tech courses. A construction company wants to collaborate—they’re offering £20,000 in cash plus £10,000 in products/services. They also want to share office space with Charity X for a year to help implement the tech. The tricky part is figuring out how to structure this deal to comply with charity law and tax rules. Should the cash be a donation, a payment for services, or a mix of both? And what kind of agreement would work best for this? Any thoughts?
Sounds like an awesome project! For the £20,000, maybe split it? Treat part as a donation and the rest as payment for using the tech and space?
Kerr said:
Sounds like an awesome project! For the £20,000, maybe split it? Treat part as a donation and the rest as payment for using the tech and space?
Yeah, but how would they decide how much is donation vs payment? Any guidelines for that?
Kerr said:
Sounds like an awesome project! For the £20,000, maybe split it? Treat part as a donation and the rest as payment for using the tech and space?
Good question! I think they’d need to document what’s strictly for services and what’s voluntary with no direct benefit. Helps with tax stuff too.
For the £10k in products/services, they should probably record it as an in-kind contribution. Keeps everything transparent.
Soren said:
For the £10k in products/services, they should probably record it as an in-kind contribution. Keeps everything transparent.
What’s an in-kind contribution? Sorry, new to this.
Soren said:
For the £10k in products/services, they should probably record it as an in-kind contribution. Keeps everything transparent.
Oh, it’s when donations aren’t money but goods or services. They just assign a value to it for their records.
They could start with an MoU—sort of like a casual outline—and then move to a binding agreement later.
Perry said:
They could start with an MoU—sort of like a casual outline—and then move to a binding agreement later.
Makes sense. Would that be a Service Agreement or something else once they go formal?
Perry said:
They could start with an MoU—sort of like a casual outline—and then move to a binding agreement later.
Depends. If it’s mostly tech access, maybe a Licensing Agreement? For the space and broader stuff, Service Agreement sounds better.
They’ll need to clearly separate the donation part from the payment. Otherwise, tax headaches for sure!
Bailey said:
They’ll need to clearly separate the donation part from the payment. Otherwise, tax headaches for sure!
Totally agree. It’s all about documenting everything so there’s no mix-up.