Yes, You Need a Contract
Whether you're an environmental organization raising funds for a lawsuit or a community group needing new equipment, you may want to sell something to raise money.
You may not think it's necessary for product vendors and not-for-profit groups to have written agreements, but most professionals generally agree that some form of contract is prudent and accomplishes three objectives:
1. Clarity. With all major decisions in writing, both parties can assume responsibility for complying with the terms and begin the fundraising project with a clear understanding of who must perform which tasks.
2. A record. A signed agreement is important when questions come up. It serves to keep track of details and may help the not-for-profit group reach their target goal.
3. Framework. The agreement sets the wheels in motion. Once all parties have signed on the dotted line, they can arrange for items such as brochures or catalogs and start lining up volunteers.
When hammering out the fundraising accord, here are a few pointers on what to include:
Numbers. The material costs and expected profits should obviously be the same as the numbers you agreed to verbally. And be sure the agreement spells out who covers the costs of any services.
Services. List all of the services you require, including packing, shipping, tallying, kick-off presentations and incentive programs.
Materials. The contract should include all promotional materials that were reviewed and approved, such as take-home brochures, display kits and sample packs.
Dates. Make sure any important dates are included, such as delivery dates and schedules of payment.
Returns. There should be a clause stating the procedure for handling damaged, unsold or returned merchandise, back orders and substitutions for popular items.
Signatures. You should have all the appropriate signatures (many groups require at least two people to sign). The contract should include a clause that the agreement is between two organizations, not between individuals.
Given the fact that fundraising drives can net thousands of dollars, it's important to have written safeguards. A fundraising agreement should be a prerequisite for doing business for any not-for-profit group.