Appeals conducted jointly with traders

Traders can only conduct a NSW fundraising appeal jointly with an entity that holds a fundraising authority or deemed authority.

Responsibilities outlined on this page apply to all fundraising authority holders and traders.

What is a trader

Many charitable organisations engage the services of a trader, more commonly known as ‘commercial fundraisers’, to conduct appeals on their behalf.

Traders are persons who conduct fundraising appeals in connection with the supply of goods or services in the course of their trade or business partly for their own benefit.

Traders are not required to hold an authority to fundraise. Instead, any appeal they conduct must be done jointly with a person or organisation that holds an authority or deemed authority.

Entering into an agreement with a trader

A written agreement must be executed wherever an authority (or deemed authority) holder conducts an appeal with a trader. 

For example, if a restaurant chain advertises that a specific monetary value of each meal or product sold would go to a charitable organisation or purpose, then a written agreement must be executed between the restaurant and the authority (or deemed authority) holder.

What must be included in a written agreement

The responsibilities between parties must be clear, especially around how collected funds will be used, distributed and monitored to promote transparency.

 A written agreements between an authority (or deemed authority) holder and a trader must include:

• the parties to the agreement
• the rights, duties and responsibilities of each party
• how the agreement may be varied
• how the agreement may be terminated and for what reasons
• notice that alternative dispute resolution will apply to disputes and how it will apply
• types of insurance policies, the level of insurance, and the terms and conditions of the relevant insurance policy
• an undertaking from the trader that they will comply with all relevant state and federal laws
• the trader’s obligation to comply with reporting requirements and to help facilitate the authority (or deemed authority) holder to comply with reporting requirements
• appropriate internal controls/safeguards for accountability measures (e.g. traceable donations)
• the trader’s responsibility to maintain records, types of records and manner of keeping records
• the method to be used to calculate the gross amount obtained and the manner of payment to the authority (or deemed authority) holder
• details of any commission, wage or fee payable to the trader and any other persons
• type and limits on amount of expenses that trader and the authority (or deemed authority) holder may incur.

What must be disclosed in advertising

Appeals conducted jointly with traders often include advertisements, for example brochures or leaflets, signage, online or television marketing. All advertisements, notices and/or information concerning a joint appeal must:

• be approved by the authority (or deemed authority) holder before it’s distributed
• identify the trader and the authority (or deemed authority) holder by outlining the full name, place of business and contact details
• ensure the name of the trader is displayed in the same font size as the name of the authorised fundraiser
• give details of the benefit the authorised fundraiser and the trader are to receive by including how funds or proportion of profits raised will be distributed. This must be expressed as a percentage of gross proceeds or a dollar amount
• include details of the date the appeal starts and ends.

Participants in appeals with traders should also understand the disclosure requirements.

Appeals involving donated goods or material

If the joint appeal involves the collection of donated goods or material, the advertisements, notices and information must also include details of:

• how the donated goods or material will be dealt with
• how much of the funds raised or profits the trader will pay the authority (or deemed authority) holder. This should be expressed as:
  • a percentage of the average gross income derived or expected to be received from the goods or material collected, or
  • if using a collection bin, an average dollar amount derived or expected to be derived from each bin per month.

Example 1: The donated goods and materials become the property of and sold by [Trader]. The proceeds of sale will be paid to [Trader]. From these proceeds [Trader] will pay [Authority holder] 60 per cent of the average gross income.

Example 2: The donated goods and materials become the property of and sold by [Trader]. The proceeds of sale will be paid to [Trader]. It is expected [trader] will pay [Authority holder] $... per bin each month.

The advertisement, notice or information must be updated if at any time there is a significant change in details. The details should be reviewed at least every 12 months.

Appeals involving a trader for the collection of goods or material

Authority or deemed authority holders may engage traders in appeals that involve the collection of donated goods or material (for example where traders own, distribute, collect or sort through items for a fee or benefit).

Register of collection bins

For joint appeals involving the collection of donated items using collection bins, the trader must maintain a register of bins distributed or used in each appeal including:

• date of distribution
• number and location of each bin
• number of bins distributed
• date and aggregate gross weight of unsorted clothing obtained from the bin (for clothing appeals only).

Collection bin labelling

Where items are donated through collection bins, the authority (or deemed authority) holder must ensure that each bin the trader distributes:

• is consecutively numbered with the number displayed prominently
• displays the total number of bins currently used in connection with the appeal (this number should be reviewed and updated at least every 12 months from start of the appeal or where there is a significant change in number of bins used)
• has ‘COMMERCIALLY OPERATED’ displayed on its chute (for clothing appeals only).

Monthly reports  

At least once a month for the duration of the appeal, the trader must provide a report to the authority holder (or deemed authority holder) containing information recorded on collection bins including:

• date of report
• date of distribution
• locality
• number of bins distributed
• aggregate gross weight of sorted clothing obtained from the appeal (for clothing appeals only)
• certification from the trader that the report is accurate.

Appeals involving a trader for the sale of goods and services

Traders must maintain a record of goods and services supplied in an appeal.

If the appeal includes goods for sale, the trader must maintain a record including:

• date, number and cost of units purchased or manufactured by the trader
• date and number of units sold, and
• gross income obtained from sales.

Remuneration for traders

Principle 16 of the National Fundraising Principles provides that remuneration to traders (commercial fundraisers) must not be excessive.

All authority holders (including deemed authority holders) must also comply with the following NSW-specific requirements:

• commissions paid or payable to any person as part of a fundraising appeal must not exceed one-third of the gross money obtained by that person during the appeal
• if a fundraising appeal is conducted with a trader, expenses must be of a type and amount described in a written agreement between the trader and the authority (or deemed authority).

Returns from any appeal

The return from any appeal must be fair and reasonable and the authority (or deemed authority) holder must take all reasonable steps to make sure this occurs. 

Donation only appeals

The authority (or deemed authority) holder must receive at least 50 per cent of the gross income raised.

An authorised fundraiser (or deemed fundraiser) must take all reasonable steps to ensure that the expenses payable in respect of the appeal for donations only do not exceed 50 per cent of the gross income. Expenses include amounts the authority holder and the trader incur.

Goods or services appeals

An authority (or deemed authority) holder must take all reasonable steps to ensure that the expenses payable do not exceed a fair and reasonable proportion of the gross income raised.

For more information, refer to managing money and proceeds of an appeal.

Record-keeping requirements for traders

Traders must maintain records of fundraising appeal as required under the Act. For example, records of:

• money collected and deposited as part of appeal
• participants and employees, including child participants
• collection devices used
• goods collected
• goods and services supplied
• receipts.

Refer to Record Keeping for records to be maintained as part of a charitable fundraising appeal.

Location of records

Any records and documents to be maintained by the trader, either by agreement with the authority (or deemed authority) holder or as required by the Act, must be kept at the registered office of the authority holder.

Exemptions

Records may be removed from the registered office of the authority (or deemed) holder:

• for auditing purposes
• by law, regulations or authority conditions, or
• to be taken to a place where NSW Fair Trading has been notified in writing the change in location. For example, for them to be kept at the office of the trader.

Where an exemption applies authorising records to be kept at the office of the trader, those records must be made available to the authority (or deemed authority) holder upon request.

Banking requirements for traders

A trader can maintain a bank account where the money from fundraising appeals is deposited.

Traders must maintain separate accounts for each authority holder

A separate account must be maintained for each authority (or deemed authority) holder. The account can only consist of money raised in the appeals conducted jointly with the authority holder which the parties agree to be held in the trader’s account.

Maintaining banking records

The income from the fundraiser(s) must be clearly identifiable in the banking and accounting records of the trader. The records must be provided to the authority (or deemed authority) holder in accordance with their written agreement.

Issuing receipts

A trader may only use receipts or tickets the authority (or deemed authority) holder has authorised for use for an appeal, as outlined in the written agreement.

Both the authority holder and the trader must maintain records of the receipts that have been issued.

Notify Fair Trading when engaging a trader

Authority holders must notify NSW Fair Trading within 28 days when a new trader is engaged or the details of an existing trader change. This does not apply to deemed authority holders.

Particulars that must be updated include:

• full name
• business, postal and email and website addresses
• contact numbers.

Other information that must be updated includes:

• full name of each director (if an organisation) and owner of the trade or business conducted by the trader
• the period for which the trader will be engaged, as in the written contract
• the type of appeals to be conducted.