3.1 Best Practice: Putting the Agreement to Paper

What We’re Hearing

A well written agreement is integral to a successful partnership. When an agreement lacks clarity or provides an unrealistic division of roles and responsibilities, issues may arise in all aspects of managing and operating the site.

Agreements are often created without appropriate expertise or detailed understanding of operations. In some cases, agreements do not exist at all between owners and operators or third parties, leaving everyone involved vulnerable to liability and instability. There are also instances where an agreement exists, but partners do not understand or respect it. It is crucial to establish mutual understanding from the start and build in mechanisms for review and adjustment over time.

Agreements need to be revisited because partnerships inevitably change over time. Perhaps the initial roles envisioned for the partnership are no longer practical for the site, or the status of the property changes, as in the case of a community group taking on operations to save a building from demolition. Having a formal conversation about the relationship agreement provides a context to explore and accommodate changing needs.

Best Practices

Partnerships are highly unique, shaped by the specific conditions of each site and characteristics of each partner involved. For this reason, it is not possible to provide a standard template for partnership agreements at historic sites. Agreements must be tailored to these unique circumstances every time a new partnership is formed.

The following general best practices can be applied by all parties involved. Agreement writing should consider the principles and recommendations contained elsewhere in the Toolkit, as well.

01. Length of Term

Agreement periods longer than one year offer greater security in strategic and financial planning, while agreement periods that are too long between renewals can limit evolution and impose outdated mechanisms. Determine a renewal schedule that best suits each party’s needs and build that into the agreement.

02. Negotiation Schedule

Write the agreement collaboratively with appropriate expertise and representation at the table. Developing the agreement may be a lengthy process and should not be rushed. Consider the timelines of the partners with whom you are working and their decision-making process when establishing a negotiation schedule. A partner with a consensus-based process may take longer than a hierarchical structure will.

03. Level of Detail

Include a statement that reflects the partners’ shared vision for the site, which will help establish a direction for long term planning. Sections of the agreement may require different levels of specificity. For example, terms around finances and maintenance should be highly specific while site use and programming can be laid out more broadly, offering freedom for development.

04. Assigning Roles

Divide roles and responsibilities according to the expertise, skills, and resources of each partner. Doing so will set up a balanced structure with which to move forward. Ensure the agreement reflects an understanding of roles.

05. Success Indicators and Limits

Build in success indicators to avoid complacency in the implementation of the agreement. It is also crucial to integrate limitations (funding, staff time, etc.) based on realistic expectations of what each partner can offer.

06. Independence vs Accountability

Integrate measures that ensure owner oversight and accountability on the part of operator or third party, while leaving room for flexibility so that these parties can evolve in their roles.

Best Practices for Owners

Consider the responsibilities you intend to relegate to the partner – are they realistic? Can you offer support, even if only during a transitional phase? For example, if fundraising is going to be expected of the partner, ask for information about their fundraising history.

Consider the financial capacity of the operator and whether their resources are limited. How can you accommodate a lean partner, such as keeping rent to be paid by the operator as modest as possible?

Recognize that there are certain costs the owner must maintain, such building insurance. On the other hand, there are typical costs that owners should expect to cover, such as liability insurance.

Give operators and third parties necessary control over their working environment, while also establishing parameters to ensure your due diligence as site owner.

Consider completing a risk assessment as part of the exercise of assigning roles.

Determine a logical point of contact within your own structure and clearly indicate it within the agreement, so that the lines of communication between partners are clear.

Best Practices for Operators and Third Parties

Ask questions and do your research! Review your charitable status, bylaws and other foundational documents to ensure this venture is in line with your purpose as an entity. Insist on seeing data that will help you understand what you are taking on. For example, utility bills, tax bills, maintenance records, insurance costs, visitation statistics. Will your role bring unanticipated expenses, such as property tax or liability insurance?

Don’t take on responsibilities that you do not have the expertise or capacity for. When entering into a new agreement, consider whether you have the skill set to manage and deliver on your role effectively.