Charitable fundraising – what are the rules around this?
So, you have set up your social enterprise and are ready to start fundraising – wonderful news! However just because you classify as a charity does not mean you are exempt from rules – quite the opposite. There are some complex regulations that apply (here we will focus on the rules in Victoria).
Ensure that you comply with all applicable laws and that your fundraising practices and other activities are fair, transparent and well-governed.
Consumer Affairs Victoria: Registration and Exceptions
Any charity wishing to conduct fundraising appeals must register with Consumer Affairs Victoria first – however there are some exceptions. If you are a very small startup and not needing to raise large amounts of funds and satisfy the following:
- Your charity receives less than $10,000 gross in a financial year from fundraising; and
- You and your charity are not paid for conducting the fundraising; and
- Your charity only uses unpaid volunteers;
Then you will be an exception and not need to register.
You will also not need to register with Consumer Affairs Victoria if your charity is conducting fundraising through gaming activities such as lotteries or raffles; instead you will need to apply for a permit from the Victorian Commission for Gaming.
Registration will also be unnecessary if your charity is only receiving sponsorships from commercial organisations permitted to donate money or benefits to charity.
All registered charitable fundraisers must keep accurate financial records.
Charities that are exempt from registration with Consumer Affairs Victoria:
If your charity is exempt, you still must follow some rules:
- Collectors must display identification; and
- Your charity must keep collection tins and other receptacles secure.
If you are running gaming activities such as lotteries or raffles:
The community and charitable gaming application process and requirements for charitable organisations is as follows:
- Complete the declaration as a community or charitable organisation application form and lodge with VCGLR no less than 21 days before the gaming activity is to be carried out;
- Appoint a responsible nominee;
- Apply for a minor gaming permit if there is to be a raffle with total prize value exceeding $5,000; or lucky envelopes; or fundraising events such as casino nights;
- Follow the gaming activity guidelines as found on the VCGLR website.
How to register your charity for fundraising with Consumer Affairs Victoria:
- Complete an application for fundraiser registration through the Consumer Affairs Victoria website;
- You will need to clearly identify the beneficiaries of the fundraising – (this information will appear on your public register and will give public confidence in donating to your appeal);
- You (or the person/s nominated as your fundraising appeal managers) will need to complete a criminal record and personal insolvency declaration;
- Appoint a responsible person (or an incorporated association) to complete the responsible person consent.
If you plan to distribute money overseas you must attach a letter of verification from either:
- The government, local embassy or consulate of the country in which money will be distributed; or
The Australian embassy in the country in which money will be distributed; or
A recognised provider in that area (such as the Salvation Army); - Your charity must provide a Victorian address as the fundraisers principal place of business – a P.O. Box will not be acceptable.
- There is no fee for applying to register or for registration.
Urgent fundraising:
For emergency appeals, apply for registration as above together with a statement telling the department why the application is urgent.
What happens after you have lodged your application:
It can take up to 28 days for the department to approve your registration, so make sure you apply at least 28 days before you intend to start fundraising.
Once approved, your registration lasts three years and can then be renewed. If your charity or fundraising circumstances requires more than 3 years, you may apply for a longer registration period.
The Australian Consumer Law and charitable fundraising:
The ACL applies to fundraising activities if that activity occurs in ‘trade or commerce’. If your charity:
- Engages in a fundraising activity involving a supply of goods or services or
- Are a for-profit professional fundraiser or
- Are fundraising in an organised, continuous and repetitive way
Then you are likely to have certain obligations under the ACL. You should be open, transparent, truthful and fair when fundraising. You must not engage in misleading or deceptive conduct, and if your fundraising activities also involve supplying goods or services, you must not make false or misleading representations or engage in unconscionable conduct in relation to the supply of those goods or services.
Australian Securities and Investments Commission (ASIC)
ASIC regulates companies including charities seeking funds from the public, and requires charities provide fundraising disclosure documents.
How and when do the fundraising provisions in the Corporations Act 2001 apply to charitable investment fundraisers?
Do not apply to fundraising limited to the solicitation or acceptance of donations.
Do apply to charitable fundraisers that involve either –
- The issue of debentures:
- You may need a trust deed and trustee.
- You will need to issue a prospectus and comply with certain requirements including the prohibition on securities hawking.
- Offering interests in a charitable scheme:
- You will need to comply with managed investment scheme provisions;
- You will need to comply with anti-hawking prohibitions;
- You will need to issue a product disclosure statement and provide ongoing disclosure of material changes and significant events;
- You will need to comply with dispute resolution requirements; and
- You will need to comply with certain restrictions on advertising.
Your charity may also be required to comply with licencing provisions, hold an Australian financial services licence, and meet obligations as such.
If you would like some help navigating through the laws around fundraising, and making certain you are complying with those relevant to your charitable fundraising activities, we would love to help.
This is general advice only. Liability limited by a scheme approved under Professional Standards Legislation.
Published May 7, 2018
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