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Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
Charitable donation agreement
Cases of appeals from vulnerable segments of the population or individuals who cannot resolve certain issues on their own (for example, pay for treatment due to lack of funds) are not uncommon. When providing assistance, philanthropists must conclude charitable donation agreements with the person they are helping or with the organization collecting donations. It is the agreement that helps to further regulate the relations of the parties.
Definition of a charitable donation agreement
A charitable donation agreement is a contract under which a benefactor provides a charitable donation through the free transfer to the other party of a certain amount of money (the amount of which is determined by the agreement). This is determined by the Law of Ukraine “On Charitable Activities and Charitable Organizations”. The purpose of the transfer of funds is their use by the charitable organization to carry out charitable activities.
Parties to the contract
The parties to the charitable donation agreement are:
- Benefactor
- Beneficiary
Both parties can be both natural persons and legal entities.
Contract structure
- Subject of the contract
- Rights and obligations of the parties
- Terms and procedure for making a charitable donation
- Responsibility of the parties and procedure for resolving disputes
- Term of validity of the contract
- Requisites and signatures of the parties
- Other conditions determined by the parties
Rights and obligations of the parties
Benefactor’s rights:
- Organize collection of charitable donations for the beneficiary, using the media, social networks and various Internet resources
- Receive information about the condition of the person for whom the collection of donations is being carried out
- Disclose information about the beneficiary in order to receive charitable donations
- Use your own account to collect charitable donations
- Stop collection of donations in case of disrespectful attitude towards benefactors (collected funds remain in the benefactor’s account and are used in accordance with the legislation of Ukraine)
Benefactor’s responsibilities:
- Notify the beneficiary of the amount of funds collected and transfer them after the collection is complete
- Use charitable donations exclusively in accordance with the agreement
Beneficiary rights:
- Refuse charitable assistance (donations) by terminating the contract
- Receive a report from the benefactor on the amount of donations collected within three days after the request
Beneficiary responsibilities:
- At the request of the benefactor, provide documents regarding the state of one’s affairs (health, etc.)
- Provide the benefactor with a report on the use of funds (charitable donations)
Responsibility of the parties
- In case of misuse of charitable donations (which should be specified in the contract), they must be returned within 15 days from the moment the donor makes the claim.
- In case of breach of contract due to force majeure (natural disasters, etc.), the parties may be fully or partially exempted from liability.
Term and termination of the contract
- The contract comes into force from the moment of signing
- The term of validity expires after the fulfillment of the conditions specified in the contract
- The contract may be terminated by agreement of the parties
- If the beneficiary violates the terms of the contract (concealing information or providing false information), the benefactor may terminate it unilaterally
Dispute resolution
Disputes between the parties may be resolved:
- Through negotiations
- In court, if negotiations fail
Calculate the cost of contract development services
Legal assistance in drafting a donation agreement
Concluding a contract requires knowledge of the law, so it is recommended to involve a qualified lawyer. Without one, there is a risk of unnecessary problems, for example:
- Targeted use of funds. For example, the beneficiary may use the funds not for treatment, but for other needs. Or there is a need to change the clinic or treatment method, and the contract strictly prescribes a specific clinic. It happens that part of the funds remains unused, and the mechanism for their return or redistribution is not prescribed.
- Reporting. The beneficiary may not provide receipts for expenses, there are questions about the exchange rate for treatment abroad, or the benefactor requires more documents than provided for in the contract.
- Confidentiality of personal data. Beneficiaries complain about excessive disclosure of information about the disease, there are claims about the use of photos of children in meetings, conflicts arise regarding the publication of medical documents.
- Force majeure: death of the beneficiary before all funds are used, change in diagnosis or treatment method, closure of the medical institution specified in the contract.
- Problems with third parties. The beneficiary’s relatives may demand part of the funds, other charitable foundations claim the collected funds, or the medical institution suddenly changes the cost of services.
- Technical difficulties. The bank may block transfers due to insufficient justification, there are questions with the tax office regarding the taxation of donations, there are problems with international transfers.
- Reputational risks. The beneficiary may publicly accuse the benefactor of withholding funds, it may turn out that the beneficiary’s story was partially untrue, or conflicts arise in social networks regarding the transparency of the collection.
- Purely legal nuances: incorrectly executed documents for the tax office, the absence of important points about confidentiality, unclear terms and conditions for transferring funds.
That is why it is advisable to consult a lawyer. A professional lawyer will help you correctly formulate flexible terms for using funds, protect both parties from possible abuse, take into account all tax aspects, create clear reporting mechanisms, prescribe procedures for non-standard situations, protect the reputation of both parties, and ensure that the contract complies with all legal requirements.
If you need help drafting or analyzing a charitable donation agreement, please contact us! Fill out the form below to discuss your situation with a lawyer.
Calculate the cost of services
1 question
Are you planning to raise funds through social media and public platforms?
2 question
Will I need to transfer funds abroad?
3 question
Is there already a specific medical facility/institution where the funds are planned to be sent?
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