NFP Coalition Calls for Urgent Fundraising Law Reform

The current state of fundraising regulation in Australia is inconsistent, fragmented, outdated and rarely enforced and is in need of urgent major reform, according to a coalition of Not for Profit peak bodies.

Justice Connect’s Not-for-profit Law is collaborating with sector peak bodies including the Australian Institute of Company Directors,  the Governance Institute of Australia, Australian Council of Social Service (ACOSS), Community Council for Australia (CCA), Chartered Accountants Australia and New Zealand, CPA Australia and Philanthropy Australia to improve the state of fundraising regulation in Australia.

The coalition of peak bodies called on all Australian governments to provide charities and other Not for Profits (NFPs) with a nationally-consistent fundraising regime that will deliver more than $15 million in savings every year for charities alone.

Currently NFPs are forced to waste significant amounts of time and money to meet outdated and fragmented fundraising laws that differ considerably across Australia, according to the group.

“Charities and other NFPs are wasting millions of dollars on outdated and unnecessary regulation – funds that should be going to Australians in need,” the Australian Institute of Company Directors CEO, John Brogden said.

“Across Australia’s seven different fundraising regimes, however, there is variation in the requirements for fundraising at each stage, from when and if a licence is needed, to how long a licence is valid, right through to what must be reported and when.

“This duplication and confusion means charities and NFPs are having to spend time and money on red tape rather than pursuing their missions.”

Justice Connect CEO Fiona McLeay said: “For smaller groups, it can be particularly difficult to navigate these complex laws. For larger ones, resources are redirected from service delivery to compliance, with spending on fundraising ‘admin’ a significant deterrent to public giving.

“There is a simple way to provide a better regulatory framework for fundraising – clarify and improve how it is covered by the Australian consumer law and repeal existing inconsistent and out-of-date state and territory legislation.”

Governance Institute of Australia CEO Steven Burrell said: “The motivation of NFPs to support as many people as possible often means they spend considerable time and effort raising funds from the public.

“However, the current regulatory regime creates risks for donors, losses to productivity, barriers to innovation, and negatively impacts the sector’s sustainability and growth.”

The peak bodies have put together a three-step plan for fundraising reform:

1. make minor amendments to the Australian consumer law to ensure application of certain provisions to a broad conception of fundraising activities is clear
2. repeal state and territory-based fundraising laws
3. work with other regulators (for example, the Australian Charities and Not-for-profits Commission, state and territory-based regulators and self-regulatory bodies such as the Fundraising Institute of Australia and the Australian Council for International Development) to improve fundraiser conduct (for example, door knocking, telemarketing, excessive spending of funds on third-party services).

The coalition said an improved fundraising regulatory regime would deliver benefits to all Australians.

“The proposed reforms would protect charities and other NFPs from unnecessary costs as they try to raise funds, support them to be more productive, including when they deliver government-funded services and enable them to continue making a significant contribution to our economy and our society,” the group said.

The group said the reforms were cost-neutral, would better protect donors, could be enforced by existing regulators and would be easier for the sector to understand and comply with.

Justice Connect’s Not for Profit expert Sue Woodward told Pro Bono Australia News the current state of fundraising laws across jurisdictions in Australia was “ridiculous and outdated” and never envisioned changes like crowdfunding or even the use of the internet.

“Australia has missed the boat on this,” Woodward said.

“When there is a gap between what the law contemplates and the activities happening now, there is a potential for confusion and for people to do the wrong thing.”

She said a recent example of this was the surge in the number of people crowdfunding to pay for funerals.

“In one case in WA the crowdfunding organisers probably didn’t know that regulators in their state believe that fundraising for a funeral should only be done by a licensed charity, yet experts say this area of the law is unclear.

“If we don’t get it right now it will take another decade.”

Woodward said the urgent need for change comes as two separate inquiries are already underway into fundraising; the Consumer Law Review and a Productivity Commission review of consumer law enforcement.

The NFP coalition has called on organisations to tweet their support for change by using the hashtag #fixfundraising along with their organisation’s name.

Read Not-for-profit Law’s full submission to the ACL Review (27 May 2016).

Read Not-for-profit Law’s submission to the Productivity Commission Issues Paper: Consumer Law Enforcement and Administration (30 August 2016).