Charities undertaking certain fundraising activities – as well as third party organisations that carry out fundraising for charities – are likely to have obligations under the Australian Consumer Law (ACL), according to a new guide.
The guide – entitled: A guide to the Australian Consumer Law – for fundraising and other activities of charities, not-for-profits and fundraisers – was released in December 2017 following feedback provided during the Consumer Affairs Australia and New Zealand’s (CAANZ) review of the ACL.
The guide sets out to help charities, not-for-profits and fundraisers better understand their obligations under the ACL. According to the guide, your fundraising activity is likely to be classed as “in trade or commerce”, and you are likely to have certain obligations under the ACL, if:
- you engage in a fundraising activity that involves the supply of goods or services
- you are a for-profit professional fundraiser, or
- you are fundraising in an “organised, continuous and repetitive way”.
Supply of goods and services
The guide states:
"If you are regularly supplying goods or services in return for payment or other consideration, then that activity is likely to be in trade or commerce and the ACL is likely to apply to you when you engage in that activity."
For-profit professional fundraisers
The guide states:
"Professional fundraisers are in the business of seeking donations and this is likely to be in trade or commerce for the purposes of the ACL. If you are a professional fundraiser, or if you engage a professional fundraiser to carry out fundraising activities on your behalf, then you need to be confident that the conduct of the fundraising activities does not breach the ACL."
Fundraising in an “organised, continuous and repetitive way”
The guide states that fundraising activities which “are carried out in a business-like way” are likely to be in trade or commerce and subject to the ACL.
Factors that indicate fundraising activities occurring in a business-like way include some or all of the following:
- the fundraising activities are continuous and repetitive
- the fundraising activities are organised and managed (through the use of business plans or fundraising strategies, measurement of fundraising goals and outputs, processes, policies and procedures, for example)
- the organisation that is fundraising uses resources (assets and employees, for example)
- the fundraising activities are promoted or marketed
- financial or other records of the fundraising activities are maintained.
Obligations under the ACL
According to the guide, if an organisation’s fundraising activity is classed as “in trade or commerce”:
- it must not engage in misleading or deceptive conduct or unconscionable conduct; and
- if its fundraising activities also involve supplying goods or services, it must not make false or misleading representations or engage in unconscionable conduct in relation to the supply of those goods or services.
The guide also contains several examples outlining conduct which may fall under “in trade or commerce”. The full guide can be viewed through the Australian Consumer Law website.