Fundraising– considerations for charities, fundraisers and donors
February 2020 | Insights | Seak-King Huang
The extensive devastation of the bushfires has compelled many people to make donations and fundraise to assist affected communities, support fire services, and care for injured wildlife, etc.
There has been a plethora of fundraising “campaigns” on web-based donation platforms and at the time of this article, donations to the Fire Fight Australia concert are still possible. At the same time, fundraising campaigns are getting legal attention, in particular, Celeste Barber’s original campaign on Facebook with our comments reported earlier this week (SBS News and the Age).
A legal conundrum has arisen from the Facebook campaign: how can the NSW Rural Fire Service and Brigades Donations Fund (the Fund) disburse funds to those and for those purposes Ms Barber and donors are expecting. The first thing to note about the conundrum is that there is no suggestion of any misconduct or wrongdoing by any of the parties involved. Everyone involved has proceeded on good faith and transparently. But the situation should invite us to consider matters from three perspectives:
· Charitable purpose – What is the charity beneficiary permitted to do?
· Fundraising – What a fundraiser should check
· Donating – What donors should check
For all charities, their purpose is foundational to why they exist and for what their resources (which includes funds raised for and donated to them) may be applied. No one would want those responsible for charities to ignore the charitable purpose and if they were to do so, they would be derelict in their fiduciary obligations.
For anyone wishing to fundraise (often nowadays a celebrity who can mobilise their fans) a check of the purpose of the charity they wish donations to go to will tell them how broadly or narrowly the funds donated may be used. Likewise for donors. Charities can assist by clearly stating their purpose on their websites and many Australian charities already do this very well.
In the case of the Fund, its purpose is described on its website in general terms and in its governing document (a trust deed) which is readily available for free via a search on the Charity Register on the Australian Charities and Not for Profits Commission website. The Fund’s purpose is narrow in two ways: first, its assets can only be applied by the trustee to or for the Brigades of the NSW Rural Fire Services and secondly, only to enable or assist the Brigades in purchasing or maintaining equipment or facilities, training or resources or for their administrative expenses associated with their volunteer-based fire and emergency services activities.
Unfortunately and by many reports, to the surprise of Ms Barber and many of those who have donated in response to her Facebook post, the purpose of the Fund does not extend to providing aid to families who have tragically lost loved ones who were volunteer firefighters or communities who need resources to rebuild, those involved in wildlife rescue and environmental rehabilitation, or indeed to other organisations similar to the NSW Rural Fire Services.
It follows from the above that if you wish to fundraise for a charity, you should make sure (amongst other things, of course) that you understand what its charitable purpose is. You would not want to discover that its charitable purpose is more limited than you wish or different to what you imagine.
There has been good general advice about fundraising published, for example, “How to fundraise for Australian bushfire relief effort” (Siobhan Hegarty, ABC Life, 8 January 2020) and from the ACNC itself, “Safe fundraising and giving in response to drought and bushfire disasters”. Both point to the need to know the charity for whom you intend to fundraise: contact them and check them out via ACNC’s Charity Register (there, in addition to their governing document which sets out their charitable purpose and financial documents showing how they have used funds previously).
Apart from knowing the charitable purpose, there is another good reason to make contact with the charity you wish your fundraiser to benefit. Amongst the ACNC’s tips for fundraisers is the stark reminder: “Don’t start raising money until you are familiar with how fundraising is regulated in the state or territory you wish to fundraise in”. Registration, authorisation, licence, permit or sanction (collectively, licence) may be needed and all the fundraising laws impose specific (and in several instances, onerous) obligations on fundraisers. Familiarity with how fundraising is regulated is not straightforward when there are the laws of seven jurisdictions to be considered if the fundraiser is Australia wide (and every “campaign” on a web-based donation platform has that reach) and no two pieces of the legislation are similar –here we must again note the need for #fixfundraising. It is both tedious and time-consuming to address the threshold question of whether a licence is required – a ground for exemption in one jurisdiction is often not a ground for exemption in others. But in many of the jurisdictions, if you fundraise as an agent of, or authorised by, a charity which is already itself licensed, you will be exempted from the need be licensed yourself. This in itself is a good reason to make contact with your intended charity, and many charities invite would-be fundraisers to make contact with them for this reason.
Good general advice about how to donate safely and how to fundraise is also readily available. Two of the more instructive ones are “How to donate to Australian bushfire relief: give money, watch for scams and think long term” (Krystian Siebert in The Conversation, 7 January 2020) and the ACNC’s “Safe fundraising and giving in response to drought and bushfire disasters”. Also, the Australian Competition & Consumer Commission (ACCC) warned about scams (reports can be made to its Scamwatch website) provided tips about how donors can protect themselves in early January.
The common advice is for donors to know the charity to whom they intend to donate. And again, as outlined above, there is a lot of information readily and freely available now about charities that are registered from the ACNC’s Charity Register. This will prevent donors from being surprised to find that the charity may not have the reach they would like.
What options are there for the funds Ms Barber has raised?
In short, it is complicated. Ms Barber’s lawyers and the lawyers of NSW Rural Fire Services are reported to be meeting. A spokesman for the NSW Rural Fire Services is reported to be saying that they do wish to distribute the money in line with Ms Barber’s wishes. But he also says that “the RFS is the beneficiary and we can’t donate money people gave us to other charities”.
Amongst the possibilities that lawyers may be canvassing could be:
· an application for Court orders from the NSW Supreme Court. Cypres order has been mentioned but this is not a classical cypres situation; there is no failure of the Fund as such (its purposes are not impossible or unable to be fulfilled).
· whether amendments can be made to its the trust deed but is it possible for amendments to achieve the balance of being true to its current purpose and achieving what is necessary to distribute the funds in line with the expectations of Ms Barber and donors.
· winding up the Fund so that in the course of the winding-up, assets in it are distributed to similar organisations but this would be a somewhat radical course of action.
· return of funds to donors so that they can “re-gift” to a charity that better fits the area they wish to benefit but this would be a costly exercise and there is another entity involved in the equation, the Paypal Giving Fund (into which all donations were first received).