5 recommendations for effective partnership agreements
When I was working at BBC Children in Need, and leading on the partnership with Lloyds Banking Group, our partnership agreement was one of the most useful tools. Why? Because it was simple and effective, supported the delivery of our partnerships goals, whilst protecting both parties brands.
This example stands out. From our experience we see a huge variation in the quality of partnership agreements. – not even in place, whilst others are so complex that they add no value.
An effective partnership agreement helps protect the interests of all parties involved and prevents potential disputes. Here are our 5 recommendations for effective partnership agreements:
- Simple and effective
The problem is that most partnership agreements do not provide a true reflection of what the partnership is trying to achieve, but instead are often filled with over-protective clauses which are unlikely to be pursued by the charity or partner even if they did happen. Keep the agreement simple. Be proactive by providing your partner with a simple and effective agreement to review and sign. The agreement should not allow for any ambiguity, should use everyday language, and only use legal terminology when needed. Include useful information, such as who the key contacts are, and the benefits and activity that will be delivered by both parties.
2. Include your partnership objectives
We often see that agreements aren’t a collaborative process. When you create the partnership agreement it is the ideal time to discuss with your partner what the objectives are, and what success looks like is. This will provide a framework for resolving any difficult conversations in the future, because you can always refer back to your agreed objectives. When at BBC Children in Need, it was a 3 month process discussing each element of the agreement to mutually agree on the content, however it was worth all the time as the partnership was maximised, and raised over £15m across three years.
3. Define roles and responsibilities
It is important to clearly define the roles and responsibilities of each partner. This section sometimes lacks clarity, so both partners end up with unrealistic expectations of each other. To avoid this problem we recommend you include each partner's obligations, responsibilities, and decision-making authority. Defining these roles and responsibilities will help prevent misunderstandings and potential disputes down the line. When working at The Prince’s Trust and onboarding new corporate partners in the insurance industry, this was always an essential topic to discuss with potential partners before finalising the agreement.
4. Establish a dispute resolution mechanism
However much you prepare, disputes may still arise. It is important to have a mechanism in place to resolve them. Therefore, your partnership agreement should describe how disputes will be resolved, such as involving senior decision makers, or even mediation. As the saying goes “prepare for the worst and expect the best”. I have often used the agreed contract to refer to, to overcome difficulties, especially about donation amounts due and their timings.
5. Minimum guarantee
We recommend you include the financial terms of your partnership – both income and expenditure (if relevant). Partnerships agreements are legally binding, so once signed, both parties are bound by the law to deliver their contribution. However, corporate partnerships are about relationships so it is likely that any dispute over finances can be resolved without enforcing the agreement. We also recommend you include a commitment from your corporate partner to pay 50% of the partnership target, if they can’t achieve raising it as planned. This will make sure the company is serious about your partnership and will reassure your senior management.
In conclusion, a simple and effective corporate partnership agreement is essential for any corporate partnership to be maximised. If you would like Remarkable Partnerships free partnership agreement template then please email aj@remarkablepartnerships.com
Written by Georgina Oxlade.
