Managing money and proceeds of an appeal

Banking requirements

Money received during a fundraising appeal must be banked immediately, before deduction of expenses, into an account with a bank, building society or credit union. Deposits and withdrawals from the account must be able to be identified and related to each fundraising appeal undertaken.

These requirements do not apply to fundraisers exempted from the obligation to hold an authority to fundraise.

Using proceeds to conduct the appeal

Lawful and proper expenses

Proceeds from an appeal must be spent on the charitable purposes or objects that were the subject of representations made during the appeal. Any expense deducted from the proceeds must be lawful and proper.

If donations are the only form of income, an authority (or deemed authority) holder must take all reasonable steps to ensure that expenses do not exceed 50 per cent of gross income raised. If donations are not the only source of income, an authority holder must take all reasonable steps to ensure that expenses do not exceed a fair and reasonable proportion of the gross income. 

The following expenses are not lawful and proper:

• expenses prohibited under any law
• expenses not supported by documentary evidence, or not verifiable as being properly incurred
• in the case of an expense paid or incurred by an organisation that is an authorised fundraiser, if it was not properly authorised by or on behalf of the organisation.

Authority (or deemed authority) holders should be aware that:

• 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, and
• 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) holder.

Expenditure by an organisation must be authorised

Where an authority (or deemed authority) holder is an organisation:

• any expenditure for conducting the fundraising appeal, and
• any disposition of funds and profits resulting from a fundraising appeal must be properly authorised by or on behalf of the organisation.

Investing money received from an appeal

Money received during a fundraising appeal should be applied to the charitable purposes intended. However, if the money is not immediately required, the money may be invested, but only in a manner allowed for the investment of trust funds.

This is subject to any Act of NSW which confers special powers of investment on the person or organisation concerned.

Authority (or deemed authority) holders who are considering investing charitable funds raised and are unsure of their obligations should seek professional advice.

Safeguarding assets and stock

Authority (or deemed authority) holders must ensure all assets obtained during or because of a fundraising appeal are safeguarded, recorded and properly accounted for.

These assets would include any stock of goods purchased or manufactured by the authority (or deemed authority) holder to be sold as part of a fundraising appeal.

Issuing receipts for donations

When to issue a receipt

A receipt must be issued to a donor immediately for each donation of $2 or more, even if the donor has not requested one.

This does not apply when the money is:

• received through a collection box or similar device
• received through the supply of goods and services
• received through a payroll deduction scheme
• deposited directly into the authority (or deemed authority) holder’s account dedicated to the fundraising appeal.

If donations are by direct debit or deposit into the authorised fundraising account, the authority (or deemed authority) holder may issue a single receipt to each donor every 12 months for the aggregate amount received.

Proper control over receipts

An authority holder must ensure proper controls and accountability of receipts. The gross money received by a participant who solicits or receives money in a fundraising appeal must be counted in the presence of the participant. The participant must then be issued with a receipt for that amount. 

The authority holder may also issue a single receipt for the gross money cleared from a collection box or similar device. 

Each receipt must include the following information:

• consecutive numbering of all receipts, as part of an ongoing series, and
• the printed name of the authorised fundraiser.

Other information may be required under specific tax and organisational law, including, but not limited to the Corporations Act, the Australian Charities and Not-for-profit Commission Act 2012 (Cth), and the Income Tax Assessment Act 1997 (Cth).