On 15 December 2020, the Treasurer of Australia, the Honourable Josh Frydenberg, announced that the Council on Federal Financial Relations has agreed to establish a cross-border recognition model to harmonise charitable fundraising laws. Once established, charitable fundraisers will be permitted to fundraise in all Australian States and Territories and will only be required to obtain one authority to do so.
This is an exciting announcement for organisations currently fundraising or intending to fundraise across multiple Australian States and Territories. Under the current model, each State and Territory has its own charitable fundraising laws and fundraising licencing regimes (except for Northern Territory which does not regulate charitable fundraising). This means that an organisation wanting to undertake a national charitable fundraising campaign is currently required to follow seven different fundraising regimes and may require up to seven different licences to fundraise.
Who does the charity fundraising laws apply to?
It is worth pointing out that charitable fundraising laws do not only impact charities and not-for-profits. The charitable fundraising laws apply to all charitable fundraising activity (i.e. all soliciting and receiving of money, property or other benefit for a charitable purpose) regardless of entity type or not-for-profit status. Many purposes qualify as charitable purposes, including purposes to help the poor, needy or underprivileged, purposes of protecting animals or the environment and purposes of advancing education, health, culture and religion.
Since it is the act of undertaking charitable fundraising that triggers the charitable fundraising laws and licencing requirements (rather than entity type or charitable or not-for-profit status) the complexities existing within the current charitable fundraising regime effect for-profit and not-for-profit organisations alike. For example, a commercial company conducting charitable fundraising on the side of its normal business endeavours (such as by asking customers to donate money to help bushfire relief at check out) may be captured by the fundraising laws and licencing requirements.
Unsurprisingly, the current regime makes fundraising across multiple States and Territories in Australia quite onerous and complex, especially for small-scale organisations that lack the people-power required to ensure cross jurisdiction compliance.
Additionally, problems associated with the current model have been exasperated by the COVID-19 restrictions and the increase in online fundraising initiatives – particularly because many of the State and Territory fundraising laws are out of step with current fundraising practices and are also unclear about whether the laws and licencing requirements are triggered where online fundraising initiatives can be accessed from multiple jurisdictions.
Whilst the announcement provided little detail about how the new model will operate or when it will come into effect, we hope the reforms will significantly reduce the costs and administrative burden for fundraisers, allowing more time and money to be directed to the fundraising endeavour itself. Further, we are hopeful that the reforms will motivate more organisations to start charitable fundraising (particularly where organisations wanting to fundraise were deterred by the complexities of the current regime).
Unfortunately, a reform of this nature is likely to take a considerable amount of time. This means we will have to continue to bear with the present challenges and complexities associated with multi-jurisdictional charitable fundraising in Australia, at least for the foreseeable future. However, in the interim some jurisdictions are taking it upon themselves to become more aligned. See our article ‘Reduced obligations for registered charities fundraising in VIC & WA’ for information on fundraising changes introduced in Victoria and Western Australia last year.
How we can help?
If your organisation is currently undertaking charitable fundraising or looking to fundraise and needs assistance with compliance or obtaining the appropriate authorities or licences, or if your organisation is interested in learning more about how fundraising may assist it in furthering its purpose, please get in touch with our specialist Charities + Social Sector lawyers.