Jean Roberts

The dictionary defines ‘auspice’ as ‘patronage’, and one definition of ‘patronage’ is ‘the
granting of contracts’.

There appear to be two distinctly different uses of the word ‘auspice’ in the not-for-profit sector:

the formal granting of approval and/or funds (from a government department) to provide services as detailed in a funding/service agreement

• an incorporated organisation is said to ‘have the auspice’ to provide such
  services

acting as the auspicing body, in effect acting as the host organisation on
behalf of an auspiced body, which is usually a community-based group yet to
become incorporated and for whom the funds are ultimately intended.

• many self-help groups apply for funds through an auspicing body to commence activities prior to completing the process of incorporation: funding sources
  require incorporation before they will make funds directly available to an
  organisation

The first example is reasonably clear, in that one organisation receives the auspice
and deals directly with the government department in finalising and complying with the
terms and conditions of the funding/service agreement. The organisation with the
auspice may sub-contract responsibility for particular sections of service provision to
other incorporated organisations: in which case, the relationship is a contractor/sub-
contractor relationship. The organisation with the auspice is the only organisation that
will deal directly with and be accountable to the government department.

Issues of negotiation of the terms and conditions of contract, quality control, payment of
fees, grievance procedures, etc., are best negotiated prior to commencement of the
contract relationship. It is always wise to cater for the worst possible scenario by
putting formal procedures and protocols in place before the contract relationship commences.

Where the organisation with the auspice intends to contract with more than one
incorporated organisation, it is also wise to consider the nature and quality of
relationship that should be in place between contracted organisations as well as with the
contracting organisation. This is in the interests of all involved but particularly of the
organisation with the auspice, as this organisation has direct accountability to the government department to meet, and comply with, the terms and conditions of the funding/service agreement.

With the advent of competitive tendering, this first instance is likely to be more prevalent. Numbers of incorporated organisations may provide or be interested to provide similar services or to provide different services to a similar client group. In this case, it may be decided to prepare and submit a collaborative tender in which case one organisation would act as lead tenderer.

As lead tenderer, that organisation would be the only organisation negotiating with the tender-caller with other participating organisations being one step back. The need for formal procedures and protocols between the lead tenderer and participating organisations is similar to the contractor/sub-contractor relationship.

Potential for conflict, misunderstandings, misinterpretations, etc., are greater in these two situations than in the case of only one organisation being involved.

In the second example there are also a number of points that require careful
consideration.

The legal status of the auspicing body.

The auspicing body is an incorporated body -
An auspiced body needs to know and understand the legal status of the auspicing
body, and the legal status of the auspicing arrangement between the two bodies.

The purpose of the auspice arrangement needs to be crystal clear.

Is it a short-term arrangement to give the auspiced group time for establishment and then support through the process of incorporation in its own right?

Is it to act as ‘banker’ for funds to be channelled to the auspiced body while an unincorporated organisation .. until its own process of incorporation is finalised and it is able to receive funding direct into its own bank account and financial management system?

Is it to allow the auspicing body to retain control of the auspiced group, ie to allow the auspicing body to monitor or direct activities, or to include the statistics and finance of the auspiced body in its own data base or under its own financial control?

Is it to allow the auspicing body to trial a particular activity or project under the protection and direction of its own governance and management until such times as the activity or project gains sufficient momentum and community support to attract its own membership base, committee of management and fund its own staff under a separate incorporation?

The separate roles of the auspicing body and the auspiced body need to be clearly articulated to all concerned.

Whatever the purpose of the auspicing arrangement, the roles of the auspicing body and the auspiced body need to be clearly articulated and understood so that each body understands each other’s role and responsibilities.

Committee members of the auspiced body need to know that their opinions and decisions are going to be respected and carried through .. in other words that they are not just a rubber stamp for the auspicing body’s opinions and decisions, which may be quite different.

The nature and extent of authority held by the auspicing and auspiced bodies need to be clearly articulated .. what can each body do without recourse to the other body?

Is the auspicing body bound to the principles and purpose determined and upheld by the auspiced body?

Can the auspicing body withhold money from the auspiced body which it has received and banked on behalf of the auspiced body?

Can the auspicing body expel members of the auspiced body’s committee of management or staff without notice or without a procedure of appeal being available to the expelled members?

Can either body make statements or commit the other body in such a way that causes harm to the other body?

Does the CEO of the auspicing body have power of veto over decisions made by
the committee or staff of the auspiced body?

The status of the constitution of the auspiced body.

Where the auspicing arrangement is within an incorporated body which has been incorporated under its own Act of Parliament, eg one of the large Churches, the relationship between the auspicing body and auspiced body may well be restricted to the internal laws and by-laws of the auspicing body.

The constitution of the auspiced body may even be an internal document within that Church and may have questionable status in the Courts of Law .. a status that can remain uncertain unless or until tested.

Being incorporated under its own Act of Parliament, the auspicing body may have an unclear status in respect to the requirements of incorporation law (either State of Commonwealth), therefore the auspiced body may have an unclear status as a result.

The auspicing body may articulate very clearly in its internal laws that any property is vested in the auspicing body itself, but that the management and maintenance of such property is the responsibility of the auspiced body … is this a cost that the auspiced body has to meet and therefore needs to have the means of determining and allowing for in its financial planning and management. In relation to belief, principles, faith, etc., it is possible for the constitution and by-laws of the auspicing body to focus on adherence to a set of principles rather than to equally focus on the governance and operational procedures that should be in place to ensure a business (whatever the purpose of the auspiced body) and financial viability.

In relation to the power of the committee or board of management of the auspiced body, the constitution may refer to ‘responsibilities’ rather than ‘powers’ .. there is a lot of difference between having a set of declared powers and being responsible for a set of procedures or outcomes.

Separate constitutions for the auspicing and auspiced bodies.

Separate constitutions for the auspicing and auspiced bodies.
In reviewing its constitution, an auspiced body needs to include the following:

determine the legal status of that document both within and outside of the auspicing body;

consider the statement of purpose or objects to which the auspiced body wishes or is required to be committed .. this is the purpose for which the auspiced body exists and should be more localised and specific than the purpose for which the auspicing body exists;

consider the rules under which it wishes or is required to operate .. these can be influenced by the rules of the auspicing body and the rules which need to be in place to meet the requirements of external funding bodies, state or federal legislation, or statutory requirements

consider the policies and procedures that need to be in place for both the governance and operation of the auspiced body .. as these are the means by which the statement of purpose and rules as laid down in the constitution are going to be carried through into action;

identify the ‘association’ members to whom the committee of management is accountable for achieving the statement of purpose and working to the rules .. often they are the members of the Parish with the Parish Council (or similar body) having the power to elect, appoint or expel members of the committee of management

it is wise to determine the powers of the association members and (if applicable) members of the Parish Council within the constitution; and ensure compatibility between the two constitutions, in particular that the constitution of the auspiced body declares the status of the auspiced body in relation to the auspicing body .. it may be that a review of the auspiced body’s constitution is subject to approval by the auspicing body.