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 approach the auspicor first, and the auspicor may even charge a fee for making the relevant arrangements on behalf of the auspicee.
If your organisation is not incorporated, you must arrange for an incorporated organisation to manage the grant funds and take financial and legal responsibility for the project prior to submitting your application.
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
Depending on the arrangement, the auspicee project can also benefit from the management, infrastructure, insurance protection and resources of the auspicor, which are made available to the auspicee for the project.
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 in some way.
Role of the auspicor
The auspicor is responsible for accepting the funds from Nillumbik Shire Council, and managing the funds on behalf of the applicant. The auspicor:
- remains bound by and must act in accordance with the grant’s terms and conditions; and
- is ultimately responsible for and accountable to Nillumbik Shire Council for the proper use and acquittal of funding.
Nillumbik Shire Council may, in its absolute discretion, elect to deal with the auspicor (in lieu of, or in addition to, the funding applicant) in respect of any aspect of the during the grant cycle.
When an auspice arrangement is set up, it is important to have a written auspicing agreement so that all parties understand their role and responsibilities in the auspice relationship. An auspicing agreement must be drafted with care because the auspice organisation is taking legal and financial responsibility for the auspiced project.
Every auspicing relationship will be different and for the auspicor there may be risks and extra administrative burdens. The auspicor needs to be prepared for this, and have in place a solid auspicing agreement and appropriate insurance, risk management protocols and other guidelines (such as policies around releasing grant funds to the auspicee in instalments as the project progresses) to reduce risks as much as possible.
The auspicor may also be responsible for any GST requirements around grant income and expenditure as grants paid by Council are generally inclusive of GST. Council recommends seeking the advice of the Australian Tax Office in relation to this.
Both parties need to determine if the auspicee will receive the benefit of the auspicor's existing insurance coverage and whether those insurance policies are adequate to mitigate against the potential risks of the project. The auspicor will need to notify its insurance broker and review its insurance policies if it intends to extend its insurance protection to the auspicee.
For more information
Not-for-profit Law’s auspicing guide provides a detailed overview of auspicing arrangements.