Agriculture Reference
In-Depth Information
An MOU (Memorandum of Understanding) is the nonprofit version of what is otherwise known in
the corporate world as a contract or business agreement. While legal liability may or may not be in-
volved, an MOU outlines what two or more organizations are agreeing to do together. MOUs are usu-
ally negotiated and approved by a governing board or leadership of the agreeing organizations. Simple
or fancy, the process of working through an MOU will determine what each party is agreeing to do and
the consequences for nonperformance. An MOU can outline the markers for a successful partnership,
as well as define exit clauses and other actions or milestones to review the terms of the agreement or
end the relationship.
ELEMENTS OF AN MOU
MOUs can be used for all types of agreements—space or land usage, partnership agreements, and fiscal
sponsorships just to name a few. They are, essentially, a great way to come to agreement and document what
you are agreeing to do with another organization. The steps taken to define the terms of an MOU can also
give you a sneak preview of what the process of working with another organization might be like: Are they
timely in replying to you? Are they willing to do everything they said in meetings, now that things are being
documented? How do they react when you disagree on some terms? If they refuse to put anything in writing,
that might be cause to decide not to proceed with a partnership. Much like the work your community did to-
gether to determine a mission statement, the back-and-forth with an MOU process can deepen a partnership
or reveal fissures that need to be either mended or walked away from.
If your MOU will be legally binding, and not just an outlined agreement, as with any legal document, you
should have an attorney or other legal professional help you draft or, at least, review it.
MOUs are unique to every situation and can be as long or as short as both parties feel comfortable with.
Generally, these are the elements involved.
PARTIES
This component explains the organizations involved in the agreement, their names, addresses, legal status or
corporate structure, and in which city and state the agreement is happening.
INTENT
An overview of what the MOU is for and what the parties intend to do together.
TERM
Explains the duration of the agreement.
RESPONSIBILITIES
This is the meat of the MOU, where the project is outlined and all parties define what they will do.
FINANCIAL RESPONSIBILITIES
While financial responsibilities could be outlined merely in the responsibilities area, to keep things simple,
they are often called out as a separate section. If there are no financial responsibilities—be sure to spell that
out as well! There should be no ambiguity in the MOU. If you are drafting an MOU for fiscal sponsorship,
this is the area where fiscal elements are clearly defined.
LIABILITY AND RISK SHARING
