Working with Third Parties

This training from Support Cambridgeshire introduces the key principles of working with third parties, carrying out due diligence, and using Memorandums of Understanding or MoUs. The guidance links, available in the transcript you will find alongside this recording, will provide you with the materials we mention.

Transcript

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Working with Third Parties : A Simple Guide to Due Diligence & Memorandums of Understanding (MoUs)

Slide 1 — Title slide

No speaker notes.

Slide 2 — Introduction

This short video from Support Cambridgeshire introduces the key principles of working with third parties, carrying out due diligence, and using Memorandums of Understanding or MoUs.

Many charities and community groups work with freelancers, fundraising consultants, delivery partners, and other organisations to increase flexibility, improve value for money, and extend their reach.

Partnership working – Support Cambridgeshire (Support Cambridgeshire)

Carrying out appropriate due diligence helps protect beneficiaries, safeguard the organisation’s reputation, and support good decision-making.

An MoU can then provide clarity about roles, responsibilities, and expectations, helping to avoid misunderstandings from the start.

Slide 3 — What “Due Diligence” Means

Due diligence is the process of checking that a potential partner is legitimate, capable, financially stable, and aligned with your organisation’s values and charitable aims.

It involves gathering and evaluating information to help trustees make informed decisions and demonstrate sound judgement. The Charity Commission expects trustees to carry out reasonable checks to ensure funds and activities are used appropriately and responsibly.

Slide 4 — Why Due Diligence Matters

Due diligence plays an important role in protecting your organisation. It helps reduce the risk of funds or resources being misused, safeguards your reputation, and supports informed partnership decisions.

It is also an important governance requirement, with Charity Commission guidance outlining key considerations when working with external partners.

Charities: due diligence, monitoring and verifying the end use of charitable funds – GOV.UK (Charity Commission)

Due diligence and fundraising | Fundraising Regulator (Fundraising Regulator)

Key duties for charities and voluntary organisations | NCVO (NVCO)

Slide 5 — Due Diligence Practical Steps

Some key checks include:

Gathering the information: Confirm who the organisation is, how it is structured, and whether it is registered with any relevant regulators.

Financial stability: Review accounts and publicly available financial information to identify any potential concerns.

Risk assessment: Consider any operational or reputational risks, look for any warning signs in news reports, social media, or regulatory findings. Seek references or recommendations and speak with referees where possible.

Alignment: consider whether the organisation is a good fit for your charitable purposes and values.

Decision-making: Use a due diligence checklist to summarise your findings, make an informed decision based on the evidence, and keep a record of the rationale for future reference.

UK Charity Due Diligence & Compliance Checklists (Charity Excellence)

Good Merger Guide 6 of 7: How to do charity merger due diligence (Eastside People) – whilst this is about mergers specifically it is still useful

Slide 6 — What Is a Memorandum of Understanding?

A Memorandum of Understanding, or MoU, is typically a non-binding document that sets out how two or more parties intend to work together.

It helps establish a shared understanding of responsibilities, expectations, and ways of addressing issues should they arise. A range of helpful templates is available online to support organisations in creating an MoU.

Memorandum of Understanding- Charity Commission and other Government agency- Template A (Charity Commission)

Slide 7— Key Components of the MoU

An MoU should clearly outline:

The purpose and objectives of the partnership.

The roles and responsibilities of each party.

How resources, budgets, and data will be managed.

Arrangements for safeguarding, data protection, and complaints handling.

How joint activities will be coordinated and managed.

Insurance responsibilities for all parties involved.

The duration of the arrangement.

How progress and outcomes will be monitored.

The process for resolving disagreements.
What happens if either party wishes to end the partnership.

Slide 8 — Practical Tips

Keep arrangements proportionate to the level of risk involved and make use of existing templates rather than starting from scratch.

Even when working with a trusted organisation, it is important to carry out appropriate due diligence. Taking time to agree expectations at the beginning is often far easier than resolving misunderstandings later.

While an MoU can be a valuable tool, a formal contract or specialist legal agreement may be more appropriate where arrangements involve significant payments, service delivery, funding agreements, data sharing, intellectual property, or substantial liabilities. For complex or high-risk partnerships, consider seeking professional advice.

Slide 9 — Closing

We hope you have found this Support Cambridgeshire resource useful.

This video provides a brief introduction to the topic and is not intended to be a comprehensive legal guide. The accompanying transcript includes links to local support services, Charity Commission guidance, and example templates.

If you need tailored advice on partnership working or due diligence, Support Cambridgeshire can provide further guidance and support.

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