New Fundraising Laws for Charities in NSW


This article applies to charitable organisations in New South Wales.

Charitable Fundraising Amendment Act 2018 No. 64 (NSW); Charitable Fundraising Regulation 2021 No. 272 (NSW)

Relevant provisions of the Charitable Fundraising Amendment Act 2018 No. 64 (NSW) (the Amending Act) and the Charitable Fundraising Regulation 2021 No. 272 (NSW) (the New Regulation) commenced on 1 July 2021.  The Amending Act has made amendments to the Charitable Fundraising Act 1991 (NSW) (the Act) and the New Regulation has repealed and replaced the Charitable Fundraising Regulation 2015 No. 511 (NSW).  The key changes are detailed below.

Amendments relating to unlawful fundraising

The Amending Act substitutes sections 9 and 10 of the Act to clarify the central offence provisions relating to conducting unlawful fundraising.  While section 9 remains substantially the same, new section 10 provides that a person must not participate in a fundraising appeal which the person knows is being conducted unlawfully.  For the purposes of this offence, a fundraising appeal is being conducted unlawfully if it is being conducted by a person in contravention of section 9 (without authority) or contrary to a condition of an authority.

Further, for the purposes of section 9 of the Act, the New Regulation prescribes an additional exemption, whereby under new regulation 6, a small fundraiser is authorised to conduct a fundraising appeal without being the holder of an authority.

Small fundraiser means an organisation or person that:

  • does not receive more than $15,000 gross in a financial year from any fundraising appeal the organisation or person conducts in the financial year; and
  • does not receive remuneration for conducting fundraising appeals, other than payment of lawful and proper expenses determined in accordance with regulation 14; and
  • only engages persons on a voluntary basis to participate in the fundraising appeal of the organisation or person.

Appeals conducted by persons engaged in business or otherwise deriving benefit

The Amending Act amends section 11 of the Act to make it clear that where an appeal is conducted by a trader (being a person supplying goods or services in the course of trade or business), the trader and the person or organisation that holds the authority to conduct the appeal must enter into a written agreement that complies with any requirements specified in the Regulations regarding the conduct of the appeal.

For the purposes of amended section 11 of the Act, new regulation 24 prescribes the matters that a written agreement between a trader and an authority holder who are jointly conducting a fundraising appeal must include, such as for example, details about the parties to the agreement, how the agreement may be varied, how, and for what reasons, the agreement may be terminated.

Conditions of Authority

The Amending Act substitutes section 19 of the Act to make it clear that an authority may be granted unconditionally or subject to conditions and is subject to any conditions imposed by the Regulations.  Schedule 1 of the New Regulation provides the standard conditions to which an authority to conduct a fundraising appeal is subject.  The standard conditions include, but are not limited to, requirements around expenses, methods of collection, marketing and payments.

Proceeds of Appeal

The Amending Act and New Regulation make a number of amendments to the ‘Proceeds of Appeal’ provisions under section 20 of the Act, including:

  • The Amending Act substitutes section 20(6) of the Act to require that money received in the course of a fundraising appeal, before the deduction of any expenses, is to be paid immediately into an account held by the holder of the authority concerned at an authorised deposit-taking institution.
  • The New Regulation introduces regulation 14 which specifies, for the purposes of section 20(3) of the Act, what constitutes a lawful and proper expense in connection with a fundraising appeal.
  • The New Regulation introduces regulation 15 which sets out that payments relating to fundraising appeals made into and out of accounts and the fundraising appeal to which the payments relate must be identified.
  • The New Regulation introduces regulation 16 which sets out that an authority holder must issue a receipt to a donor for all money received from the donor, except where money is received through the supply of goods or services or through a payroll deduction scheme.

Additional record keeping requirements

The New Regulation introduces regulation 19, which prescribes additional records that must be kept when conducting a fundraising appeal, including details of all persons associated with the appeal, cash books, a register of assets, details of receipts etc.  An organisation that conducts a fundraising appeal will also need to keep and maintain a record of minutes of business relating to the fundraising appeal that is transacted by the governing body of the organisation.

Annual returns

The Amending Act substitutes section 23 of the Act to simplify and clarify provisions regarding lodgement of annual returns relating to authorities conducting fundraising appeals.  This is supplemented by new regulations 20 and 21, which prescribe the details and documents that must be included in an annual return, including, but not limited to details of the authority holder, information about the fundraising appeals and an annual financial statement.

Authority holders to notify Secretary of certain matters

The Amending Act inserts sections 24A and 24B into the Act.  New section 24A requires the holder of an authority to notify the Secretary of a change in certain specified circumstances (for example where the holder’s details change).  Failure to comply is an offence carrying a maximum penalty of 200 penalty units (currently $22,000).

New section 24B requires the holder of an authority to give a written statement after the end of each financial year stating that the holder has, during that financial year, taken reasonable steps to ensure that the holder has complied with the Act, the regulations and the conditions of the authority.

Increased penalties for other offences under the Act

Finally, subscribers should note that the Amending Act increases the maximum penalty for the following offences:

  • Section 9 – Conducting unlawful fundraising – from 50 penalty units to 200 penalty units.
  • Section 11 – Appeals conducted by persons engaged in business or otherwise deriving benefit – from 50 penalty units to 200 penalty units;
  • Section 12 – Advertising unlawful appeals – from 50 penalty units to 200 penalty units;
  • Section 20 – Proceeds of appeal – from 50 penalty units or imprisonment for 6 months, or both to 200 penalty units or imprisonment for 2 years, or both.

Importantly, 200 penalty units currently equates to a $22,000 fine amount.

Conclusion

Subscribers should ensure relevant staff are made aware of the amendments and new provisions introduced by the Amending Act and the New Regulation discussed above.


Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au