![]() ![]() Source(s): CNSSI 4009-2015 under memorandum of understanding (MOU)ĭoDI 4000.19 A statement of intent between the participating organizations to work together and often states goals, objectives, or the purpose for the partnership details the terms of and conditions for the agreement and outlines the operations needed to achieve the goals or purpose. A MOU (Memorandum of Understanding) will help you get working on contracts much quicker. It neither includes a commitment of resources nor binds a party to a specific action. Source(s): CNSSI 4009-2015 under memorandum of agreement (MOA)ĭoDI 4000.19 A type of intra-agency, interagency, or National Guard agreement between two or more parties, which includes only general understandings between the parties. It includes either a commitment of resources or binds a party to a specific action. Please do not send confidential information.A type of intra-agency, interagency, or National Guard agreement between two or more parties, which includes specific terms that are agreed to, and a commitment by at least one party to engage in action. If you have a question you would like to submit to SE4N, send it to us using the contact form and we will consider answering it in a future post. A short and simple contract can be fine, but there are some very important details you will want to iron out, such as which party is responsible for managing the funds raised for the program, what happens if more money is raised than is needed for the program, and how ownership of the program’s intangible assets will be handled (such as the name of the program, the materials created for the program, and the program’s website, social media, and email lists). In your case, assuming you are past the exploratory phase, it certainly sounds like a contract would be a better fit than an MOU. It is almost always more cost-effective to pay an attorney to help you think this through upfront rather than deal with a messy situation after it has happened. This is where a qualified attorney can be very helpful, as attorneys are trained to think about what could go wrong and address this in advance in the contract. Planning Tip – An unfortunate reality is that contracts are most important when there is a dispute between the parties. But I prefer to avoid the term “MOU” when a contract is what it intended, because this can lead organizations to be less careful and thorough in writing down and adhering to the important terms of the relationship. How you label the document is less important than ensuring that it clearly and accurately expresses the mutual intentions of the parties and protects against foreseeable risks. Contracts can arise in other ways as well, but this is the most common situation. This, in fact, is a contract.Ī contract arises when one party makes a written promise (for example, to pay money, to take an action, or to refrain from taking an action) in exchange for the written promise of another party. Usually they are envisioning a short binding document that sets forth in plain language what each side is obligated to do. This is rarely what people have in mind when they talk about an MOU. ![]() A true MOU is generally non-binding, as the parties are only exploring the possibility of entering into a binding contract. Technically speaking, an MOU is an introductory agreement laying out basic terms for a more formal agreement that the parties intend to sign later (the word “agreement” is interchangeable with “contract”). However, this is not an accurate description of what an MOU is. The word “contract” tends to conjure images of long, dense documents with incomprehensible legalese and archaic words like “WHEREAS,” “WHEREOF,” and “HEREIN.” Many people prefer to avoid these types of documents and instead have a simple MOU. Very often, what people mean when they use these terms is a short and simple contract. ![]() The same goes for similar terms like “memorandum of agreement” (MOA) and “memorandum of intent” (MOI). ![]() Should we have an MOU or a contract, and what’s the difference?Īnswer: In my experience, the concept of a “memorandum of understanding” or “MOU” is widely misunderstood in the nonprofit community. We know we should have something in writing with the other organization, but we want to keep it as simple as possible. The two organizations will each do fundraising for the program and have various responsibilities with regard to the program’s operations. Question: My organization intends to carry out a joint educational program with another nonprofit. ![]()
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