Contract

Charities enter contracts constantly: leases, employment, service delivery, supplier agreements. The one that causes the most trouble is the funding contract, because it is routinely called a grant.

What makes something a contract is the substance of the exchange, not the title on the document. If the funder is buying a service — specifying outputs, requiring delivery, paying for performance — it is likely a contract however it is labelled. That brings VAT into scope, changes how the income is recognised, and may bring procurement rules with it.

Read the grant-versus-contract test before signing anything that specifies what you must deliver, and see grant for the other side of the distinction.