In what will be very welcome news to many, on 16 February 2023, the Hon Andrew Leigh MP, Assistant Minister for Competition, Charities and Treasury and the Hon Danny Pearson MP, Victorian Minister for Consumer Affairs, announced the Commonwealth, State and Territory Treasurers have agreed to a set of nationally consistent fundraising principles to streamline and harmonise State and Territory requirements for charitable fundraiser conduct.
What are the Australian Fundraising principles?
The principles are intended to give those undertaking charitable fundraising, including charities and their donors, a clear understanding of appropriate conduct, while allowing for greater flexibility for compliance. Unlike the current frameworks in place across the country, these principles are also reflective of the volume of charitable fundraising currently undertaken online.
The principles were developed by a working group of all States and Territories, informed by stakeholder consultation in 2022.
For those operating under the current framework, the principles (and the broader hope for change they signal) are welcome news. Under the current charitable fundraising 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. These different regimes come with different definitions of the conduct captured, different requirements around working with commercial fundraisers (sometimes called traders) and different requirements around reporting and ongoing compliance. In addition, the overall focus of the different frameworks is on more traditional means of fundraising, including face-to-face and telephone, rather than acknowledging the scope and significance of online charitable fundraising in the current landscape.
Fundraising can refer to activities such as soliciting public donations, holding public events with admission fees, holding fundraising events, raffles and other games, corporate partnerships, and crowdfunding. Under the current model, it is the conduct that is regulated rather than the type of fundraiser or donor. That is, the current legislative regime applies to more than just charitable organisations and also covers (amongst other things) for-profit organisations and individuals raising funds for a charitable cause.
Interestingly, the principles appear to focus on ‘charitable organisations’ (and their employees, volunteers, contractors and anyone else who they engage or arrange to raise funds on their behalf). It remains to be seen whether this represents a shift in the broader approach to the regulation of charitable fundraising.
In his media release, Minister Leigh recognised the cost and complexity of complying with multiple State and Territory fundraising requirements is a major issue for the charity sector. On one estimate, compliance requirements cost Australian charities more than $1 million a month. This can be particularly burdensome for small-scale organisations, which may lack the systems and people-power required to ensure cross jurisdictional compliance.
The principles are a much anticipated first step towards a harmonised, more modern framework for charitable fundraising. Regulatory guidance to support the principles will also be developed in collaboration with the charitable fundraising sector and each participating jurisdiction will release an implementation plan by July 2023 explaining how it will give effect to the principles through regulatory changes or legislation. This will be the real test of how far these principles will go in delivering on the hope of the sector.
The release of the principles follows on from the Morrison Government’s announcement in 2020, that the Council on Federal Financial Relations had agreed to establish a cross-border recognition model to harmonise charitable fundraising laws. Once established, this was to permit charitable fundraisers to fundraise in all Australian States and Territories under one authority. While an actual harmonised charitable fundraising regime is yet to be realised, the release of the principles is nevertheless a great step forward.
The national fundraising principles are set out as follows:
National Fundraising Principles
When conducting fundraising activities, charitable organisations must ensure that their employees, volunteers, contractors and anyone else who they engage or arrange to raise funds on their behalf:
- Always explain the purpose of their charity and the purpose to which the funds raised will be applied in ways that are appropriate for the audience.
- Always be clearly, and individually, identifiable by the public (including to display identification that contains the individual’s name, whether they are a volunteer, employee or acting in some other capacity for a charitable organisation or commercial fundraising organisation, and that organisation’s name and contact details).
- Always make and keep written records of fundraising activities that can be easily read and understood.
- Always acknowledge and comply with a:
- refusal to make a donation;
- request not to receive future solicitations (including marketing and promotional materials);
- request to be contacted at a more convenient time or by a different means; and
- request to limit the number, type or frequency of solicitations.
- Never conduct door-to-door or telephone fundraising activity at the following times:
- before 9 am or after 5 pm on a weekend;
- before 9 am or after 6 pm (door-to-door) or 8pm (telephone) on a weekday; or
- on a public holiday, unless the public holiday is closely connected with a fundraiser’s charitable purpose.
- Never mislead, deceive or knowingly use false or inaccurate information when fundraising.
- Never place undue or unreasonable pressure on a person when fundraising, or act unconscionably in any way to obtain a donation.
- Never exploit the trust, lack of knowledge, lack of capacity, apparent need for care and support, or vulnerable circumstances of any donor.
- Always make it clear whether a donation is a one-off or an ongoing donation, and clearly explain how to end an ongoing donation.
- For commercial fundraisers engaged to fundraise for a charitable organisation, never accept a donation without having explained that they are part of an organisation that makes a profit from fundraising as well as how they are paid.
At all times, charitable organisations must:
- Conduct all reasonable due diligence when engaging third parties to assist, support or deliver fundraising activities on its behalf.
- Make and keep written records of the total funds raised and the purposes for which funds are applied.
- Take all reasonable measures to protect the health, safety and wellbeing of fundraisers employed or directly engaged by them, as well as members of the public, when fundraising.
- Establish and maintain a complaints process that allows for proper investigation and redress of fundraising complaints that may be made by the public and encourage anyone with concerns about a fundraising activity conducted by or on behalf of the charity to contact them.
- Ensure information covered by the Privacy Act 1998 (the Act) [sic] is collected, used and managed in accordance with the Australian Privacy Principles where required under the Act.
- Always ensure remuneration to commercial fundraisers engaged to fundraise for a charitable organisation is not excessive when compared to money or goods received for the charitable purpose of the fundraising.
For more information you can access the Agreement Reached on Reform of Charitable Fundraising Laws - Joint Media Release here.
Of course abiding by a code or set of principles for fundraising will be familiar to many organisations, in particular the members of Fundraising Industry Australia (FIA). You can read about FIA’s involvement and thoughts in this Pro Bono Australia article on ‘Exclusive: National peak points members to FIA code over proposed govt principles’ here.
We have little doubt simplifying and harmonising the charitable fundraising regime at a national level will help increase philanthropy, and clearly a lever Minister Leigh is willing to pull as he strives to double philanthropy by 2030.
How we can help?
If your organisation is currently undertaking charitable fundraising or looking to fundraise and needs assistance with compliance, 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.