All you need to know about raising funds for a charitable purpose.
There’s no question Australians are a generous bunch, but if you want to raise money or ask for donations of clothes, food, or other items or benefits for a charitable purpose in NSW there are rules and processes that must be followed.
Some initial considerations to get you started ...
This will affect your responsibilities. For more information see the section below.
Your charitable purpose (for public or community benefit) must be clearly defined and will inform how raised funds will be distributed and who will benefit.
Who are you?
It’s great that you want to help your fellow Australian through a fundraising appeal but for larger appeals (over $15,000) there are a number of financial reporting and record keeping requirements. For that reason, individuals are encouraged to work with an established charitable organisation rather than taking on all the responsibilities themselves.
Organisations can register with the Australian Charities and Not-for-profits Commission (ACNC). Registration is voluntary but most importantly offers access to tax concessions.
ACNC registered charities holding a NSW Authority to fundraise will have reporting obligations to both the ACNC and NSW Fair Trading, but these obligations can be met by submitting your Annual Information Statement (AIS) to the ACNC.
Check who is registered with the ACNC.
Often a charitable fundraiser is an incorporated association, company or cooperative. Established charitable organisations or newly minted organisations set up for the purpose of fundraising have more financial reporting responsibilities than individuals. But these organisations enjoy the benefits of having a legal identity separate from its members, providing protection in legal transactions and limited liability to its members.
An incorporated entity such as an incorporated association, company or cooperative:
- is a 'legal person'
- can enter into and enforce contracts in its own name
- can open a bank account
- can hold, acquire and deal with property in its own name
- can sue or be sued
- continues, even though its members may change.
A trader, also known as a commercial fundraiser, is a for profit business that provides services to fundraising appeals. For example, a trader may hire and train individuals to seek donations from members of the public in train stations, supermarkets etc.
It's important to note, that a trader can only be involved in a charitable fundraising appeal if they are authorised by an existing NSW Authority holder and they have a written agreement in place.
Did you know?
During the summer bushfires of 2019/20, comedian Celeste Barber set out with the best intentions to raise $30,000 for the NSW Rural Fire Service & Brigades.
Swept up in the nation’s desire to help during the bushfire crisis, within a short time her fundraising appeal had gone viral and amassed $51 million. Many Australians were donating thinking that their funds would be widely distributed to those in need and affected by the bushfires. That was not the case.
Because Ms Barber had clearly stated (as is required) that the funds were being raised to benefit the NSW Rural Fire Service & Brigades, all $51 million raised was legally bound to go to that exact benefactor or cause. Further complicating matters, the NSW Rural Fire Service & Brigades had its own rules about how any donated funds could be spent.
As you can see, while well-intentioned, fundraising can be a tricky business.
Starting a fundraiser
If you are donating to a fundraising appeal, it’s important to know how your funds or donations will be used. All fundraisers should have a clearly stated charitable purpose.
Additionally, fundraisers that intend to raise more than $15,000 should have an Authority issued by NSW Fair Trading. You can look up the details of a NSW Authority holder. You can also contact us on 13 32 20.
Fundraisers not expecting to raise more than $15,000 may not be registered. This does not mean they are not valid fundraising appeals.
Lodge a complaint
If you suspect something is wrong with the operation of a fundraiser or an appeal, alert NSW Fair Trading right away.