In this not-for-profit sector Insight, we look at welcome potential developments in the sector through the relaxation of cross-border fundraising laws. While still in train, we analyse these changes, and why the possible easing of these rules is much needed.
Charitable fundraisers may need to comply with a range of fundraising laws if they intend to fundraise in more than one state or territory including:
- the need to hold an authority to fundraise
- ongoing eligibility to fundraise
- compliance measures
- reporting requirements
In 2016 the ACNC commissioned a report by Deloitte Access Economics[i] which found different regulatory approaches to charity fundraising between Australian states and territories imposes a significant regulatory burden on charitable organisations in Australia.
The report recognised regulation needs to keep up with new technologies for fundraising – particularly given organisations can potentially raise funds via websites and social media from donors in other states and even overseas.
The report prompted the establishment in November 2018 of the Consumer Affairs Australia and New Zealand in the Charitable Fundraising National Working Group (Working Group) with representation from each state and territory as well as the ACNC.
In August 2020, the Working Group released a discussion paper on the issue, proposing a cross-border recognition model for charitable fundraising regulatory frameworks. In welcome news:
Under the proposed model, each ACNC-registered charity could be deemed to hold a local fundraising authority in each participating jurisdiction. This would overcome the need for ACNC registered fundraisers to complete an individual application process in each jurisdiction and would be greatly facilitate the conduct of online appeals across Australia.
The proposal is supported by The Council on Federal Financial Relations.
We will await legislative developments on this issue with interest.
In the meantime, if you are a charity director, you should review whether your charity requires a fundraising license, and whether the nature of its fundraising activities require it to hold a license in more than one state or territory.
For example, under current legal requirements, if you advertise current fundraising campaigns via your charity’s website you are likely to be required to hold a fundraising license in each state where licensing applies if your website will reach donors in that state.
Simplified financial reporting for small and medium charities
In other news, the Assistant Minister for Finance, Charities and Electoral Matters announced that The Council on Federal Financial Relations (CFFR) will develop a framework by mid-2021 to lift the financial reporting thresholds for small and medium charities.
The government estimates over 3,000 charities will no longer be required to produce reviewed financial statements with a further 2,000 likely to be relieved from the obligation to file audited financial statements.
[i] Cutting Red Tape: Options to Align State, Territory and Commonwealth Charity Regulation. Deloitte Access Economics (2016)
Get in touch
We have significant experience helping a range of NFPs and charities on these and related matters. If these or other issues impact your charity, please get in touch for a confidential discussion with the Birchgrove Legal NFP Team today on (02) 9018 1067.