An introduction to charitable fundraising - part 2

Welcome to part two of our two-part series on charitable fundraising in Australia.

If you haven't already done so, we strongly recommend that you first read part one.

Part one sets the scene, introduces what the whole charitable fundraising thing is all about and covers whether you need a charitable fundraising authority and what could happen if you breach the law.

This part, part two, gets into the detail and covers how to apply, why your application might be declined and what your fundraising obligations are likely to be.

Important note: this two-part series does not explore the requirements relating to raising charitable funds using other commercial businesses including:

• professional third party fundraisers;
• selling goods and/or services during the course of trade (eg for every item sold 10 cents will go to charity).

Applying for a charitable fundraising authority

While each state and territory has its own application process and criteria and fundraising authority requirements, here are some general comments that cover all, or most, of the jurisdictions.

• There are no government fees associated with applying for a charitable fundraising authority.
• Applying for an authority will require you to complete an application in the form that the state or territory regulator has produced for such applications.
• The application form will require you to provide general contact and other information about the organisation you are applying for, the types of activities you will be undertaking and some financial information. You may also need to provide police checks and other information to accompany your application.
• It will take around four weeks for your application to be assessed.

Granting the authority

It is the job of the Government Minister responsible for the administration of the relevant charitable fundraising laws in each state and territory to decide whether or not to grant an authority to fundraise.

The same Minister also has the power to impose conditions on any authority issued. In most cases the standard conditions will be imposed. Some of the common requirements are described below.

Note: While it is the Minister that has the power described above, this power will be delegated to the relevant Government department (such as the Department of Fair Trading) to administer and determine.

Refusing an application for a charitable fundraising authority

The relevant Minister (or Government department) may refuse to grant an authority to conduct charitable fundraising activities (or appeals) for a variety of reasons, including because:

• the activity is not in the public interest; or
• the applicant is not a fit and proper person.

If your application is rejected, you can always ask for the decision to be reviewed. The process for doing so will depend on the state or territory within which you have been rejected and should be explained in the correspondence letting you know about the rejection. You can also visit the website of the relevant regulator for more information, or give them a call.

Introduction

You've got it by now, right? Yep, the below information is general in nature and may vary from state to state. Painful isn't it? – We feel your pain.

The conditions generally imposed upon the holder of a charitable fundraising authority can be divided into the following main categories:

• the way you use funds;
• the way you conduct fundraising activities (also known as appeals);
• the financial records you are required to keep;
• your audit requirements;
• public access to your information; and
• notification of changes to your organisation.

Use of funds

The types of requirements you are likely to find in relation to the use of funds raised through charitable fundraising activities include:

• the requirement to use the money in the way you said. (i.e. If the request for money was said to be for a particular project, then the money raised must be used for that project);
• requirements relating to where money received is to be paid and by when (including conditions about bank accounts);
• how funds not required for immediate use may be invested;
• which expenses incurred in relation to a fundraising activity can be deducted; or
• whether money or other benefit received during the course of a fundraising appeal can be used outside the state or territory within which it was raised.

Conducting fundraising activities

There are many requirements associated with conducting charitable fundraising activities. What you must comply with depends on the type of activity (e.g. face-to-face, by phone, through the Internet) and which states and territories you are fundraising in. Some of the main requirements include:

• ensuring people engaged in face-to-face fundraising prominently display an ID badge or card;
• ensuring that marketing material is not misleading or deceptive;
• ensuring that if a person being asked for support requests, that person is informed of where the fundraiser obtained that person's name and details;
• compliance with the Commonwealth 'Do Not Call' laws; and
• ensuring that the specific obligations relating to the involvement of children in fundraising activities are complied with

Financial records

Typically a person or organisation conducting a fundraising appeal will be required to:

• make records of income and expenditure, and keep them for at least seven years; and
• include details of all items of gross income and expenditure, and show the application of the proceeds obtained from each fundraising activity (or appeal).

You may find that there are also obligations to keep a:

• cash book;
• register of assets;
• minute book;
• register of receipt books;
• register of identification badges; and
• register of collection boxes.

Audit requirements

Don't be surprised if, being a holder of a charitable fundraising authority, you are required to have your accounts audited annually.

Important note: This means that even if you are a type of company or registered charity that is not required by the Australian Securities and Investments Commission (ASIC) or the Australian Charities and Not-for-profits Commission (ACNC) to have audited accounts, you may still be required to be audited if one or more charitable fundraising laws require it. And even then, it may be that only some of what you do requires auditing, rather than your entire accounts.

Public access to information

Depending on which state or territory you are fundraising in, you may be under an obligation to provide the following information if requested to:

• audited financial statements for fundraising appeals over the previous seven years;
• your organisation's constitution; and
• the names, qualifications and occupations of the members of your governing body (i.e. the management committee or board of directors).

Notification of changes

If you are an authorised fundraiser, you may be required to let one or more government regulators know in writing about a change to your organisation's:

• name;
• address or phone number;
• constitution;
• charitable objects or not-for-profit nature;
• incorporated status; and
• auditor's name, address or telephone number.

Conclusion

We hope that you now have a better picture of what this whole charitable fundraising thing is all about and are armed with the knowledge and language needed to find out more.

To help you get started and to find out more, we have prepared a free resource for you.

Download our handy Regulator Contact List for a list of all the state and territory charitable fundraising regulators together with their contact details and website address.

You will note that the Northern Territory is missing. Don't worry! This is not an error. The NT does not have any charitable fundraising laws at this time.

While we genuinely hope that this two-part series and our free download have been of great assistance, there is so much more to charitable fundraising, much more than we can cover in an introduction.

To get your hands on state and territory-specific fundraising factsheets and guides, and access to lots more great content, awesome tools and our vibrant forums, please join the NFPhq community, and make your way to Fundraising HeadQuarters.

For legal advice specifically tailored to your particular needs and circumstances, please feel free to contact us.

Have a thought? A comment? An observation or experience relating to charitable fundraising? Please let us know in the comments section below. We would love to hear from you.