As more and more people become regular Internet users, an increasing number of web-savvy charities and Not-For-Profit organisations in Australia realise the potential of using the Internet to raise money for their particular cause. As the number of websites that raise funds online increase, an exponentially growing number of Internet users are donating through the websites of charities and Not-For-Profit organisations and through online fundraising websites. To give an example, donations through the online Australian fundraising website, GiveNow.com.au, have increased from less than $600,000 in 2005 to 2006 to $2.85 million in 2008 to 2009. In the United States of America the amount given online has risen from $US300,000 in 1997 to $US10.4 billion in 2007.
In Australia, fundraising is governed by laws determined by each State and Territory. Most States and Territories in Australia require individuals or organisations that intend to carry out fundraising activity to follow certain compliance rules and to have a valid fundraising licence. These licences are generally only valid in the State or Territory where the licence is issued.
When carrying out traditional methods of fundraising, such as door-to-door appeals, charities and Not-For-Profit organisations in their respective State or Territory can be relatively certain as to what legal requirements govern their fundraising activities, as such activities are usually carried out in that particular State or Territory. However, when donations are received through online sources from donors across Australia or overseas, individuals and Not-For-Profit organisations collecting these funds may inadvertently contravene fundraising laws of various States and Territories.
Existing Legal Frameworks
On page 10 is an overview of the existing laws relating to fundraising in Australia. The Northern Territory currently does not have legislation relating to fundraising activities other than lotteries.
States and Territories that have laws governing fundraising differ in many respects, including but not limited to the following differences:
- Exempt Organisations: Most States and Territories provide exemptions for certain organisations from having to obtain a fundraising licence, however, the kinds of exemption differs from one jurisdiction to another. For example, in NSW, certain religious organisations are exempt from having to obtain an authority to fundraise, whereas in the ACT, there are categories of exempt organisations, including schools, churches and organisations that raise less than $15,000 a year.
- Compliance Rules: Each State and Territory with laws relating to fundraising have rules of compliance that organisations (including some exempt organisations) must observe. For example, Queensland legislation requires annual audits of registered charities and organisations that have been granted sanctions to fundraise, whereas in Western Australia, organisations holding a valid fundraising licence are required to submit an audited account of collected money at request of the Minister of Consumer and Employment Protection.
- State Registers: Most States and Territories require approved fundraisers to submit their details to a public register that is usually available on the website of that State or Territory‟s Licensing Body. This is to allow members of the public to discover whether a particular organisation they may wish to donate to have been approved to fundraise in that State or Territory. However, some states, like South Australia, do not have such a register.
Overview of fundraising legislation
|State/Territory||Legislation||Licensing Body||Legal Requirements|
|New South Wales||Charitable Fundraising Act 1991 (NSW)||NSW Office of Liquor, Gaming and Racing, Department of the Arts, Sport and Recreation||Entities that intend to raise funds in NSW for "charitable purposes" must make an application to the Licensing Body to obtain a licence known as an "authority to fundraise".|
|Australian Capital Territory||Charitable Collections Act 2003 (ACT)||Office of Regulatory Services, ACT Department of Justice and Community Safety||Entities that intend to "conduct a collection" (as defined in the Act) in ACT must apply to the Licensing Body to obtain a fundraising licence.|
|Queensland||Collections Act 1966 (Qld)||Department of Justice and Attorney-General, Queensland||Entities that intend to publicly fundraise in QLD must be either a registered charity or apply for a licence known as a "sanction" from the Licensing Body.|
|South Australia||Collections for Charitable Purposes Act 1939 (SA) and the Collections for Charitable Purposes Act 1939 – Code of Practice.||Office of the Liquor and Gambling Commissioner||Entities that intend to collect or attempt to collect any money or goods or obtain or attempt to obtain money by the sale of any disc, badge, token, flower, or other device for any charitable purpose (as defined in the Act), must apply to the Licensing Body for a fundraising licence. While the current Code of Practice does not mention online fundraising, the draft Code of Practice dated November 2010 does provide guidelines in respect of online fundraising.|
|Tasmania||Collections for Charities Act 2001 (Tas)||Consumer Affairs and Fair Trading||Entities that intend to solicit for "charitable purposes" must be granted an authority before doing so, unless the organisation is based in Tasmania or if the organisation is holding a valid fundraising licence from another State or Territory. The Act specifically provides for certain information that must be disclosed should solicitation for charitable purposes be conducted via electronic media.|
|Victoria||Fundraising Act 1998 (Vic)||Consumer Affairs Victoria, Department of Justice||Entities that intend to solicit or receive money or benefit for a beneficiary or cause must register with the Licensing Body. There is no other requirement for an entity to have to otherwise obtain a licence to fundraise.|
|Western Australia||Charitable Collections Act 1946 (WA)||Department of Consumer and Employment Protection||Entities that intend to collect money or goods for a charitable purpose must obtain a licence by applying to the Charitable Collections Advisory Committee who in turn will make a recommendation to the Minister for Consumer and Employment Protection for a licence to be issued.|
Other differences between fundraising laws of the States and Territories include whether an organisation wishing to fundraise is required to be incorporated or not and the differing penalties in regard to contravention of legislation (ranging from a $100 fine in Western Australia to a fine of $110,000 for contravention by a corporation in the ACT). While some legislation expressly acknowledges the validity of fundraising licences from other Australian jurisdictions, overall there is little cohesion between the various fundraising laws in Australia at the present time.
What You Can Do
While many organisations may opt to not engage in fundraising online altogether, the reality is that the Internet is an increasingly powerful and convenient tool to inspire people to donate to a particular cause. It is recommended that to comply with the laws around Australia, the most prudent actions for organisations and individuals wishing to fundraise online to take include:
- Apply to each State and Territory for a fundraising licence and/or register the entity‟s details onto the public fundraising register;
- Be aware of the compliance rules of each State and Territory in relation to fundraising. There are online fact sheets available and telephone enquiry lines set up by Licensing Bodies governing fundraising of most States and Territories that can provide further information;
- Ensure that the website where the online fundraising takes place has easily accessible disclosure information to the extent as required by the fundraising laws of the States and Territories, which includes information about the organisation, the cause for which funds are raised, how funds raised will be managed, accounted for and distributed;
- Ensure that the online fundraising website is secure if it is to receive sensitive information from donors, such as credit card details; and
- Keep detailed accounting records of funds collected and information in relation to online fundraising activities.
It would undoubtedly involve committing some time and costs to ensure compliance is achieved in accordance with every State or Territory‟s laws. Until a more standardised regulatory system is instigated to administer fundraising in Australia it would be advisable that the extra steps are taken to validly appeal to all Australians using online fundraising.