Unless they are privately funded, all charities and not-for-profits need to undertake fundraising to raise the funds needed to fulfill their charitable purpose and mission.
A common question we often hear when advising charities is “do we need a fundraising licence?”
In this article we will answer this question and also provide an update on important changes affecting fundraising in Victoria and Western Australia.
What is fundraising?
One of the reasons for the complexity of fundraising is that it is defined differently under the laws of each State. In general, the following types of activities are classified as fundraising:
- requesting donations to help a person, cause or organisation (whether in person or online)
- selling merchandise where some or all of profits will go towards helping a person, cause or organisation, or
- holding events to raise money for a person, cause or organisation.
Do I need a licence and if so, in which States?
Fundraising laws in Australia are not well known and can be tricky to navigate. There are different fundraising laws in each State and Territory (except the Northern Territory), so if your organisation is fundraising in several States or territories you will need to consider the laws in each of those places.
If you are fundraising locally (for example, by holding trivia nights in your area), then you only need to comply with the fundraising laws of your State or Territory.
If you are fundraising online, then you are fundraising wherever your website can be found, so you may not have realised it - but you are running a global fundraising campaign!
Can my charity operate throughout Australia?
A further issue that often gets overlooked is an incorporated association is only authorised to operate in the State of its incorporation. If your entity is an incorporated association and you’re conducting online fundraising, then to legally operate throughout Australia the entity must either:
- migrate to the structure of a company limited by guarantee registered with the Australian Securities and Investments Commission (ASIC), or
- apply to ASIC for an Australian Registered Body Number (ARBN) which authorises a State based incorporated association to operate throughout Australia.
Changes for Charities in Victoria
The Victorian government has passed the Consumer Legislation Amendment Act 2019 (Vic) (the Act). The Act makes some important changes to the Fundraising Act 1998 (Vic) (the Fundraising Act) and will commence on 31 August 2020 unless proclaimed to be effective earlier.
The Act amends the Fundraising Act to state that organisations already registered with the Australian Charities and Not-for-profits Commission (ACNC) will no longer need to register as a fundraiser with Consumer Affairs Victoria (CAV). Instead, they will only need to notify CAV of their intention to fundraise and they will then become ‘deemed registered fundraisers’. This is similar to the current situation for registered charities in South Australia.
It is important to note that a deemed registered fundraiser must notify CAV within 28 days if they enter into an agreement with a commercial fundraiser to conduct a fundraising appeal. Penalties may be imposed for not complying with this provision. The penalties bring the matter within the domain of ACNC Governance Standard 3, which means failing to comply is a breach of both the law and the governance standard.
Also, charities that are Victorian incorporated associations no longer need to duplicate reporting to both CAV and ACNC and so will only need to report their fundraising activities on the ACNC’s Annual Information Statement (AIS). These are welcome and important steps for reducing red tape for charities in Victoria and so a step closer to the ACNC fulfilling its objects, however more needs to be done to make such red tape reduction, in the area of fundraising compliance, uniform across Australia.
For non-ACNC entities in Victoria (e.g. not-for-profit sporting clubs) the existing registration process continues and so a fundraising licence is still required.
Changes for Charities in Western Australia
Western Australia (WA) has addressed the onerous compliance requirements of charities and made welcome changes to its Charitable Collections Act 1946 (WA).
As a result of these changes:
- charity fundraising licences in WA no longer have an expiry date (this means they don’t have to be renewed every three years as was required previously), and
- charities based in WA and registered with the ACNC no longer need to submit annual financial Statements to both the ACNC and WA Consumer Protection
To participate in this arrangement, eligible WA charities must provide their WA fundraising licence number when submitting their AIS to the ACNC.
For more information, read the announcement from the WA Government.
Need more information?
If you require further advice or assistance to obtain a fundraising licence for your charity or not-for-profit, or need to register an incorporated association with an ARBN to operate throughout Australia, please contact the Sharrock Pitman Legal’s not-for-profit team on 1300 205 506. We would be happy to provide more detailed advice tailored to your organisation’s circumstances and objectives and to assist with your fundraising licensing compliance.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Dan is a Legal Practitioner at Sharrock Pitman Legal.
He deals with areas of Charities & Not for Profit Law and Commercial Law. For further information, contact Dan on his direct line (03) 8561 3325.