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When you’re running a not-for-profit or a charity, one of your main tasks will be to raise money for your venture. Raising funds for your organisation can take various forms- you might make cold calls, go knocking door to door or set up a stall at your local shopping mall and chat with grocery-shoppers about your cause.
As well intentioned as your efforts might be, you simply can’t just get up and start doing those things. In order to raise money for your organisation, there are certain laws you need to follow. So, whether you’re thinking of starting a not-for-profit venture or are already running one, continue reading this article to know what laws you need to be keeping up with.
What Is Fundraising?
Fundraising is a way to get members of the public or certain organisations to donate to a particular cause. A few ways a not-for-profit or a charity might fundraise include:
- Advertising
- Games, such as raffles and bingo nights
- Crowdfunding
- Fundraising events
- Selling items door to door i.e chocolates with proceeds going to charity
All of these activities would generally be considered appropriate for fundraising, as long as they follow the proper rules and regulations. Although, raising money for a not-for-profit or a charity isn’t something that is regulated by the federal government. Instead, state and local council laws apply for fundraising related matters. Due to this, multiple different regulations can be relevant to anyone conducting a fundraiser.
What Do I Need To Do?
It’s imperative to know exactly what laws apply to your not-for-profit or charities fundraising goals, that way you can operate it legally.
First things first, you need to see whether you can actually be classed as a charitable fundraiser. The definition of a charitable fundraiser differs depending on where you’re based, so it’s important to check state specific regulations. Once you are sure you meet the requirements of a charitable fundraiser, you’ll need to follow the relevant regulations and complete any administrative tasks, such as gaining written consent.
To make things easier, we put together a table that breaks it down for you.
| State | Law | When Does The Law Apply? | What Do You Have To Do? |
| NSW | The Charitable Fundraising Act 1991 The Charitable Fundraising Regulation 2015 | According to section 11 of the act, the law applies when someone is considered to be a trader. The act defines a trader to be an individual or an organisation that receives a benefit for the appeal. They can also be involved with the supply of goods and services in any business or trade, along with the appeal. | A trader and an organisation must agree to enter into an appeal together, through a written agreement. From there onwards, advertisements or notifications related to the appeal must identify the trader. |
| VIC | Fundraising Act 1998 | In Victoria, a commercial fundraiser refers to a person that has been hired to conduct all or part of the appeal for another person. To qualify, they need to: -Organise the appeal in the same way as an employee or agent -Be the sole sole participant or one of many participants (in this case, they don’t act as an employee or agent) | If you meet the requirements, you will need to register your fundraiser with the Director of Consumer Affairs a minimum of 28 days before it officially starts. |
| QLD | Collections Act 1966 (QLD) | There’s no need to register under the act if the fundraiser is for a charitable purpose only. The appeal can be registered under the Collections Act instead. An appeal for support must: -Have the name of the person making the appeal -Detail any conditions on the authority -Be approved by the Qld Office of Fair Trading | It’s important to gain written consent from the Queensland Office of Fair Trading for your fundraising activities. |
| SA | Collections for Charitable Purposes Act 1939 (SA) | Fundraising on behalf of a licence holder doesn’t require you to hold a licence, however you will need to have consent from the organisation (which will need to have a licence). | Make sure you get written authorisation from the licence holder. |
| WA | Charitable Collections Act 1946 (WA) | The same as SA, the charity or not-for-profit will need to hold a license. Anyone acting on behalf of them will simply need their authorisation. | Make sure you get written authorisation from the licence holder. |
| ACT | Charitable Collections Act 2003 (ACT) | Anyone taking part in collection needs to be authorised by a licence holder or an ACNC registered entity. | Make sure you get written authorisation from the licence holder. |
Any Other Laws I Need To Be Aware Of?
It’s not just state laws that are going to apply for fundraising activities. Local council regulations are also going to play a large role in determining the legal legitimacy of your fundraisers. That’s why it’s important to be aware of things like zoning laws and what local council permits you might need to have.
Keep in mind, the laws we mentioned above simply cover two things: whether your fundraiser can be classed as a charitable fundraiser and the steps you need to take to legally operate it. When it comes to fundraising, a number of different legal factors are going to apply. For instance, regulations relating to safety, taxes and fair trading (to name a few).
There can be a lot of different things you need to look out for and it can get overwhelming! It’s always best to have a chat with an expert in Regulatory Compliance so they can give you the right advice and ensure you check every box necessary.
Am I A Charity Or A Not-For-Profit?
When you’re reading up on different rules for each state and council, it is important to be wary of definitions. For example, a charity and a not-for-profit are not used synonymously with one another. A not-for-profit cannot share any of its funds with the members however, charities operate a little differently (although they are subject to some strict regulations).
Different pieces of legislation may have varied definitions for things. It can help to look out for these differences as sometimes, simple misunderstandings can lead to big mistakes! If you’re having trouble getting a grasp of what you’re reading, our legal experts are happy to help.
Next Steps
If you are thinking of raising money for your not-for-profit or charity, then it’s important to be aware of all the rules and regulations so you can follow through on them. To summarise what we’ve discussed:
- Fundraising is essential for not-for-profits and charities, relying on public donations
- Fundraising methods include advertising, games (like raffles and bingo), crowdfunding, fundraising events, and door-to-door sales
- Fundraising is subject to state and local council laws, not federal government regulation
- To operate legally, you must know and follow the specific fundraising laws in your state to see if your classed as a charitable fundraiser
- In NSW, the Charitable Fundraising Act 1991 applies when an individual or organisation receives benefits from appeals, requiring a written agreement between traders and organisations
- In VIC, the Fundraising Act 1998 regulates official fundraisers and registration is required 28 days before starting
- In QLD, the Collections Act 1966 is applicable, but if the fundraiser is solely for a charitable purpose, it can be registered under the Collections Act
- SA’s, WA’s, TAS’s and ACT’s regulations require written authorisation from the license holder for fundraising on their behalf
- Local council regulations, such as zoning laws and permits, are also crucial for fundraising legality
- It’s advisable to consult a Regulatory Compliance expert for guidance and ensuring compliance
- Charity and not-for-profit are distinct entities with different rules
- Differences in definitions across legislation can lead to misunderstandings, so it’s important to seek expert advice when needed
- To fundraise legally, understand and follow state and local regulations relevant to your organisation
If you would like a consultation on fundraising laws, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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