Australians are incredibly generous, donating billions of dollars to charities each year. Rightly, there is intense public scrutiny of the way charities raise funds, so it is important that charities are fair and open about their fundraising policies and practices.
While the ACNC does not regulate fundraising, we consider the way charities conduct fundraising a crucial aspect of good governance and practices must comply with the Governance Standards. Appeals and fundraising campaigns are a significant part of the sector’s engagement with the community, and must be conducted in ways that maintain and enhance public confidence.
Regardless of whether donations are sought in person or online, the manner of the approach must comply with relevant state or territory fundraising laws, be in the best interests of the charity and meet community expectations. Your charity should have in place policies and procedures to address a range of pertinent matters, such as record keeping, how to manage donors’ data, how to respond when someone declines to give and how to engage with vulnerable people, like the elderly and those who have an intellectual disability. They must also ensure money raised, less reasonable expenses, is put towards pursuing the charity’s charitable purpose.
All forms of fundraising cost money, yet the public is highly sensitive to the amount charities spend on administration. We understand administration costs are legitimate and essential for charities to fulfil their charitable purposes, and that for some, it may be cost-effective to outsource it to a commercial enterprise. However, there can be pitfalls. If the enterprise engages in questionable tactics − badgering, pressuring or intimidating people − it is the charity’s reputation, perhaps its most valuable asset, that is damaged.
As we found when we reviewed three 2019-2020 bushfire appeals problems can also arise when others, such as celebrities, raise money for a charity without first liaising with them, albeit with the best of intentions. In these situations, the charity has no control over promises made to donors about how and when funds will be spent, creating confusion and concern. Your charity should be aware that donated funds can only be used for activities that advance its charitable purposes. New South Wales RFS Trust went to the Supreme Court to confirm this point. I discuss these matters in more detail in episodes 18 and 19 of the Charity Chat podcast.
Regardless of the way fundraising is conducted, the board or Responsible People of a charity, collectively, are accountable. Each state or territory has its own regulations and it is important for your charity to know them. Further, different regulations apply to different types of charities. For example, some charities can offer donors a tax-deductible receipt, but others are not eligible to do so.
Unfortunately, when major concerns about fundraising enter the public domain through the media or on social media, that can tarnish the reputation of the particular charity involved, as well as impact the reputation of the sector as whole. I would like to urge charities to develop good policies and practices so that all Australians can continue to feel reassured that their generosity and trust in charities is well placed.
The Hon Dr Gary Johns