Partnership Agreements for Grant-Funded Projects

Working in partnership can make a grant application much stronger. It shows a funder you are connected, avoids duplication and can bring skills or reach you do not have on your own. But partnerships also raise questions funders need answered: who holds the money, who is responsible if something goes wrong, and who does what. A partnership agreement answers those questions in writing. This guide explains when funders ask for one, what to include and how to set up the lead applicant role. It is practical guidance, not legal advice. For a large or complex partnership, take independent advice, as some funders recommend.

When funders ask for a partnership agreement

The National Lottery Heritage Fund is one of the clearest examples. In its guidance for grants of £10,000 to £250,000, it says that if you plan to work with any other organisations to carry out a significant proportion of your project, you must formalise the relationship with a partnership agreement. For grants of £250,000 to £10 million, it says you do not need to provide one unless other organisations are delivering a significant part of the project. In both cases it lists the agreement as a mandatory supporting document where it applies.

Other funders set their own rules. Paul Hamlyn Foundation's Youth Fund says that for work delivered through partnerships, there must be a lead partner who can receive funds, and the partnership must already be active. Esmée Fairbairn Foundation's Expression of Interest asks how your organisation or partnership is well placed to do the work. City Bridge Foundation accepts applications from a constituted voluntary organisation with a fiscal host as the named applicant, which is a kind of partnership in itself.

Even if a funder does not ask for an agreement, the Charity Commission's safeguarding guidance says charities working with partners should have a written agreement or contract setting out the relationship, the role of each organisation, and monitoring and reporting arrangements. That is good practice for any organisation.

Partners and subcontractors are different

The Heritage Fund draws a useful line. It describes a partner as another organisation or third-party body that is integral to the delivery of your project, such as the owner of an item, building, land or collection involved in the project. It says partners are not subcontractors: they take an active role, help to report on progress, attend regular partnership meetings and support project evaluation.

A subcontractor, by contrast, is someone you pay to deliver a defined service, such as an architect, an evaluator or a caterer. You manage them through a contract, and they are not responsible to the funder.

This matters because the two need different paperwork and are treated differently in your budget. If you are unsure which one you have, ask: does this organisation share in decisions and in the responsibility for outcomes? If yes, it is probably a partner.

The lead applicant

Most funders want one organisation to apply and hold the grant. The Heritage Fund says that if you make a joint application, you need to decide which organisation will be the lead applicant. The lead applicant completes the application and, if successful, receives the grant and provides project updates. It usually expects the owner of the heritage to be the lead applicant. If the owner is not the applicant, it says it will ask them to sign up to the terms and conditions of the grant.

The lead applicant usually takes on:

• legal responsibility for the grant agreement
• paying partners and keeping the financial records
• collecting monitoring information from partners
• reporting to the funder
• being the main contact

That is real work and real risk. The lead should be the organisation with the strongest financial systems and governance, not only the one that had the idea. If a partner is not yet constituted, our guide to host organisations and accountable bodies explains how hosting works.

What to put in a partnership agreement

The Heritage Fund says the agreement should outline all partners' roles and responsibilities and be signed by all parties, and that it should reflect the needs of your project. In practice a good agreement covers:

1. Purpose. What the partnership is for, and which grant or project it relates to.
2. Partners. The full legal name, address and named contact for each organisation.
3. Roles and responsibilities. Who delivers which activities, outputs and outcomes. Be as specific as the project plan.
4. Lead applicant duties. Who holds the grant and what they do for the others.
5. Money. How much each partner receives, when, against what evidence, and how unspent money is handled.
6. Decisions. How the partnership makes decisions, how often it meets, and how disagreements are resolved.
7. Reporting and evaluation. What information each partner provides, in what format, by when.
8. Safeguarding, data and insurance. Whose policies apply, how personal data is shared, and that each partner holds suitable insurance.
9. Ownership. Who owns anything created or bought, such as equipment, content or research.
10. Publicity. How partners acknowledge the funder and each other.
11. Changes and exit. What happens if a partner wants to leave, cannot deliver, or the funder changes the grant.
12. Signatures and dates. Signed by someone authorised in each organisation.

Keep it in plain English. A short agreement that everyone understands is better than a long one nobody has read.

Getting the money right

Money causes most partnership disputes. Agree before you apply:

• each partner's share of the budget, line by line
• whether partners are paid in advance or in arrears, and how that matches the funder's payment schedule
• whether partners can claim a share of overheads
• what happens if the funder pays less than requested

Your grant application budget should show partner costs clearly. If you are building a bid with several funders, our guide to match funding covers how partner contributions can count. The Heritage Fund, for example, asks for confirmation of partnership funding where it applies.

Showing the partnership is real

Funders can tell the difference between a partnership that exists and one created for a bid. Paul Hamlyn Foundation's Youth Fund rule that a partnership must already be active is a clear signal. To show yours is real:

• describe what you have already done together, with dates
• explain why each partner is needed, and what would be lost without them
• include letters of support from partners that are specific to the project, not generic
• name the people who will attend partnership meetings

Risks to plan for

Every partnership has risks: a partner losing staff, a disagreement over priorities, one organisation running out of money. Put the main ones in your risk register with a named owner and a plan. Funders like to see that you have thought about what happens if a partner leaves, because it happens.

Also check the safeguarding position. The Charity Commission says charities must make sure any partner body is suitable and has appropriate safeguarding procedures, with clear lines of responsibility and reporting. Our guide to safeguarding policies for grant applications explains what to check.

When you are funded

Once the grant is awarded, the lead applicant signs the funder's terms. Check that your partnership agreement does not conflict with them, and update it if the funder has changed the budget or the dates. Our guide to grant agreements and terms and conditions explains what to look for. Hold a first partnership meeting before delivery starts, and agree the reporting calendar together.

Heritage projects are among the most likely to need a partnership agreement. You can browse open heritage grants and our community group grants to find funders that welcome joint bids.