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An auspice agreement is an agreement where one organisation (the auscpicor) agrees to enter into an agreement on behalf of a second group or an individual (the auspicee). This is often a funding agreement, but can also be a lease, or insurance.
Another way to think of an auspicing arrangement is that it is a bit like a sub-contracting arrangement: the auspicor enters into an agreement, and then sub-contracts their obligations under the agreement to the auspicee. However in reality, normally the auspicee would approach the auspicor, and the auspicor may even charge a fee for auspicing the auspicee.
An auspice agreement is a legally binding contract. It sets out the legal obligations of both the auspicor and auspicee toward each other and in relation to any specific funding or other agreements.
For detailed informaiton on auspicing, see the link the Auspicing Guide below on this page.
When is an auspice agreement used?
Auspice agreements are often used to help certain community organisations to access funding for their activities.
Some common auspicing arrangements include:
- auspicing of one-off events such as art exhibitions, concerts, fairs or festivals by arts organisations
- auspicing of pilot projects or program trials
- auspicing to incubate start-up groups
- auspicing of local playgroups and study groups by a larger organisation
- auspicing of youth projects, and
- auspicing of sporting programs or competitions.
The most common reason for a group or individual to seek to be auspiced is a need to quickly and easily meet grant funding requirements. Grant funding often requires that a recipient is incorporated, is a Tax Concession Charity or has DGR endorsement.
While it is possible for a group seeking to run a project to become incorporated and then make applications to access tax concessions and DGR endorsement, this can be a time consuming and expensive process. Where a group or individual only wants to run a short term project, or is exploring a model and wishing to trial an idea before committing to incorporation, auspicing offers a neat solution.
Completing a project under the auspices of the auspicing organisation provides quick access to tax concessions and DGR status. Sometimes groups that have already incorporated may also seek to be auspiced. An example is where the funding body wants to see the project group establish a reputation of successful implementation of projects before providing direct funding to the group. Another reason could be that the incorporated group is yet to receive the appropriate tax endorsements required for the funding or activities. In that circumstance, the auspice agreement would reflect that the group is operating through a legal entity.
In general, before agreeing to auspice another organisation, the auspicor, should:
- ensure they are is satisfied that the project or activities for which the funding is sought for the auspicee, furthers the mission of your organisation in some way, and
- check their constituent documents (constitution, rules, by-laws) to ensure that entering into the auspicing agreement is consistent with the objects and powers of your organisation.
The Auspicing Guide
The Auspicing Guide provides a detailed overview of auspicing arrangements, important issues for parties involved to consider, and guidance on reaching agreement on the terms of the auspicing agreement. The Guide addresses the following issues:
- what is auspicing and when is auspicing appropriate?
- the pros and cons of auspicing arrangements for both auspicors and auspicees
- issues to consider prior to negoitating an auspicing agreement and coming to an agreement, and
- what to do when things go wrong.