State and Territory Charitable Fundraising Laws — Recommended Harmonisation

10 July 2019

How Much Do Schools Rely on Fundraising Activities?

In a previous School Governance article “School fundraising: When was the last time that you saw the air-force running a cake stall to buy a new fighter jet?” we discussed the place of fundraising activities such as cake stalls, raffles and film nights in the school calendar, noting that there is a range of laws and guidelines that govern these activities.

According to the website of the Independent Schools Council of Australia (ISCA), reflecting 2017 data from the Australian Government Department of Education and Training, independent schools on average receive 43 per cent of their funding from government grants and 57 per cent from private sources, mainly from parental contributions through fees. Just over a quarter of the Government funding is from state governments, and just under three quarters is from the Commonwealth government. In 2017, fees charged to parents accounted for 93 per cent of the income from private sources and the remaining 7 per cent represented income from donations, fundraising, sponsorship and investments.

The small proportion of total funding that is attributable to fundraising activities such as cake stalls and sausage sizzles most likely involves substantial effort in terms of compliance.

Which Laws Govern Fundraising?

In our previous articles we discussed some of the compliance and reporting obligations school boards must meet when the school embarks on fundraising initiatives. In addition to rules and guidelines from the Australian Taxation Office (ATO) and the Australian Charities and Not-for-profits Commission (ACNC), there are state and territory laws to consider. Depending on the nature of the fundraising activities, schools may have to comply with laws governing the preparation and serving of food, and occupational health and safety laws, as well as laws about fundraising.

On its website, the ATO sets out information that state and territory regulators have provided regarding fundraising for that state or territory. The Not-for-profit Law program of Justice Connect (a charity registered with the ACNC that provides pro bono legal services and undertakes law reform, policy work, legal education and advocacy) also provides a wealth of information on its website (here), including its Guide to Fundraising Laws in Australia (Not-for-profit Law Guide). As the Not-for-profit Law Guide points out, the states and territories all have different laws, regulating and exempting different types of fundraising activities and imposing different obligations about licensing and reporting.

A visitor to the Justice Connect Not-for-profit Law website will be told that the organisation is “fixing fundraising laws”.

Strengthening for Purpose: Australian Charities and Not-for-Profits Commission Legislation Review 2018

The report of the Panel that was commissioned in December 2017 to review the ACNC legislation was tabled in Parliament in August 2018. Part C of the Panel’s report deals with “Red Tape Reduction”. In Chapter 12, Fundraising, the Panel notes that the “regulatory regimes for fundraising across state and territory jurisdictions are inconsistent, complex and inefficient for charities.” The Panel states (at page 98 of the report) that the “need for harmonisation of fundraising was raised in almost every consultation and was supported in over 35 of the written submissions made to the Panel”.

The Panel noted that the ACNC legislation does not regulate fundraising activities but fundraising had been included in the review because of its impact on the sector. The Panel concluded that the Commonwealth Government “has an opportunity to reduce red tape for the sector by taking a leadership role in working with State and Territory governments to harmonise fundraising laws.” It recommended that national reform of fundraising legislation be done under the umbrella of the Australian Consumer Law (ACL), and that a mandatory Code of Conduct on fundraising be developed as a priority. In making this recommendation the Panel noted, but was not convinced by, the position of the Australian Competition and Consumer Commission (ACCC), which did not support replacing state and territory fundraising legislation with the ACL. The ACCC argued that the ACL is fundamentally different from fundraising legislation and its adoption would leave regulatory gaps and lead to less accountability.

The Commonwealth Government’s response to this recommendation is awaited with interest.

Helen Juillerat

Helen is a Legal Research Consultant at CompliSpace. She completed a Bachelor of Laws degree at the University of Queensland and has worked in legal publishing and in roles in the public higher education and health sectors focusing on governance, policy and compliance.