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Summary - The Treasurer released a consultation
paper on charitable fundraising reform in February 2012.
The Treasury recently released a discussion paper and draft
regulation impact statement in relation to proposed charitable
fundraising reform. At the moment, all States and Territories in
Australia (except the Northern Territory) have their own
fundraising regulations and they have different requirements for
registration and compliance. The discussion paper proposes to
introduce standardised fundraising laws across Australia.
The kinds of "fundraising activity" subject to
regulation, as proposed by the paper, would encompass any activity
involving the solicitation or receipt of money or other property
primarily for a "charitable purpose". "Charitable
purpose" will be defined in accordance with the
upcoming statutory definition of "charity", currently
contemplated by the Commonwealth Government. The requirement for a
"charitable purpose" suggests that fundraising activities
for causes that do not fall within the definition of
"charity" will not be caught by the proposed national
fundraising laws.
The paper submits that a key objective of such fundraising
reforms is to reduce the costs for the Not-For-Profit sector. It is
recognised that "small scale" fundraising is less likely
to present a risk to the community and it is therefore proposed
that annual fundraising of less than $50,000 by a single entity or
related organisations will be exempt from the proposed national
fundraising regulations. This is positive news for small charities
or Not-For-Profits that would otherwise need to use their limited
resources towards compliance with State or Territory based
fundraising regulations.
An interesting proposal in the paper suggests that charities
registered with the upcoming Australian Charities and
Not-For-Profits Commission (ACNC) should be authorised to engage in
fundraising activities in Australia. If this is an automated
process, it would mean that charities that would otherwise have to
register with the ACNC anyway will be also granted an authority to
fundraise throughout Australia. If enacted, this may mean
fundraising could become much easier for registered charities and
may encourage more charitable organisations to engage in
fundraising activities if the option becomes so readily
available.
The paper discusses at length the proposed regulations
concerning the conduct of fundraisers and information disclosure.
Due to the higher risks posed by internet and electronic
fundraising, it is also proposed that fundraising over the internet
for charitable purposes will be prohibited unless an entity is
registered with the ACNC. While this may increase costs for
Not-For-Profits conducting fundraising activities online,
registering and having an accessible profile on the ACNC website
could help establish credibility, which in turn may encourage
potential donors to donate.
A survey of the Not-For-Profit sector
published recently revealed that the impact of the recent
economic downturn has been felt by most organisations that rely
upon fundraising as their main source of income. The survey also
indicated that the sector appears to be moving away from high cost
methods of fundraising and is branching out into electronic
communications to carry out fundraising activities. The proposed
reforms could help address both issues by reducing costly red-tape
for the sector (particularly for compliance in each State or
Territory, if fundraising on the internet) and acknowledging the
increasing role of electronic communications in fundraising
activities.
The proposed reform is generally a step in the right direction
in standardising fundraising regulations in Australia. Its focus on
reducing cost for the sector and recognition of fundraising
activities that increasingly take place all over Australia through
the internet is relevant and timely in light of the difficulties in
applying current fundraising laws that differ from one Australian
jurisdiction to another.
Careful attention should be given to exemptions under current
State or Territory legislation and how they may be affected in any
new Federal regime. This may be particularly important for
religious organisations in New South Wales most of which have the
benefit of exemption under the
Charitable Fundraising Act.
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