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What is auspicing?
To ‘auspice’ means to provide support, sponsorship or guidance. The group or person requiring support is known as the ‘auspicee’ and the entity (usually an incorporated organisation) that auspices the group or person is known as the ‘auspicor’. When using an auspice arrangement, the relationship is often described as one where the auspicee will be carrying out the project ‘under the auspices of’ the incorporated organisation – the auspicor. It is the auspicor that receives the project funding and enters into relevant agreements for the auspicee.
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, the auspicor will typically retain the obligations for delivery of the project for which the funds are being provided. In practice, the auspicee would normally approach the auspicor first, and the auspicor may even charge a fee for making the relevant arrangements on behalf of the auspicee.
An auspice agreement entered into by the auspicor and the auspicee is a legally binding contract. It sets out the legal obligations regarding the roles and funding relations between the auspicor and auspicee.
For detailed information on auspicing, see our guide to auspicing below.
When is an auspice agreement used?
Auspice agreements are often used to help community organisations 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 person to seek to be auspiced is a need to quickly and easily satisfy grant funding requirements that the group or person is not able to meet.
Grant funding often requires that a recipient is incorporated, is a tax concession charity or has DGR endorsement, and the group or person seeking the assistance may not be able to satisfy those characteristics in the time available. Depending on the agreement, the project can also benefit from the management, infrastructure, insurance protection and resources of the auspicor, which are made available to the auspice for the project.
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 person only wants to run a short term project, or is exploring a model and wishes 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 satisfied that the project or activities for which the funding is sought for the auspicee, furthers the mission of the auspicor organisation in some way, and
- check its constituent documents (ie. constitution, rules, by-laws) to ensure that entering into the auspicing agreement is consistent with the objects and powers of the organisation
Our 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 before negotiating an auspicing agreement and coming to an agreement, and
- what to do when things go wrong
There is a handy checklist at the end of the guide. You can also download it separately below.
Many community organisations require an Auspicing Agreement to formalise working together or other joint objectives.
Make an enquiry
Our lawyers are experts in the law and auspicing for not-for-profits. Your organisation may be eligible for our free legal advice service. To find out, please complete the online enquiry form below. Using the online form is the quickest and easiest way for us to deal with your enquiry and means that we can respond to you sooner (usually within 48 business hours) and let you know how we might be able to assist. Find out more information about eligibility on our Legal Advice page.