What are the rules around raising money and charities? How can you ensure you don't get scammed? Here is what you need to know if you're donating, raising money yourself or launching an online crowdfunding appeal.
Key Points
- Rules on how fundraisers are conducted differ across Australian jurisdictions.
- To avoid fundraising scams, take the time to check a charity’s credentials and refrain from donating if in doubt.
- Fundraising laws and licence requirements also apply to small fundraisers and online appeals, so you should check what applies in your case.
- How can I check if a charity is legitimate?
- Is my donation tax deductible?
- Who regulates fundraising?
- How do I know if a fundraiser is a scam?
- What should I know if I’m raising money for a cause?
- What are the rules for online appeals?
Australia’s charity sector is made up of charities ranging in size, from local community groups to international aid organisations.
Not all small charities are registered with the national regulator, the Australian Charities and Not-for-profits Commission (ACNC).
How can I check if a charity is legitimate?
It’s easy to check a charity’s credentials if it’s on the ACNC Charity register.
Being on the ACNC register means the charity has been assessed to meet certain criteria, like not-for-profit status and compliance with governance standards.
Checking the register before donating to a charity is advisable, ACNC Commissioner Sue Woodward says.
“Because it can give you information about who runs the charity, what type of activities it does, where it gets its money from.
“And you can also feel confident that it's a real registered charity and they do have obligations to follow certain rules about good governance.”
Is my donation tax deductible?
You can only claim tax deductions for donations made to charities endorsed by the Australian Taxation Office to have Deductible Gift Recipient status.
Visit the ABN Lookup to check if a charity has DGR status.
Keep the receipt as a record of your donation if you’re planning to claim a tax deduction.
Who regulates fundraising?
Every state and territory in Australia has their own fundraising laws and regulatory authorities.
“ACNC is not the regulator for fundraising,” Commissioner Woodward says.
“For example, if an organisation is collecting money from the public in a shopping centre, there are specific rules they would have to follow which vary depending what state you’re in.”
Fundraisers may also be subject to local government approvals and other laws, like the Australian Consumer Law and Privacy laws.
If you have a concern about a charity’s fundraising conduct you can raise it with your state or territory regulator.
For a summary of fundraising laws and information on your local regulator, visit the links below:
- Australian Capital Territory
- New South Wales
- Northern Territory
- Queensland
- South Australia
- Tasmania
- Victoria
- Western Australia
If you believe a registered charity is not managing funds properly, you can report it to the ACNC.
“If they wish, they can do it anonymously and we do take those concerns seriously,” Commissioner Woodward says.
How do I know if a fundraiser is a scam?
To avoid an online fundraising scam, check that you’re on an official website and that the fundraiser is legitimate.
If you have doubts about a fundraiser in person, don’t donate, Peter Hills-Jones says.
He is the CEO of the Public Fundraising Regulatory Association, an industry body representing charities and fundraising agencies doing face-to-face fundraising in Australia.
Take your time, pause... you can always go on the website or call the charity to verify, and then you can donate at a future time.Peter Hills-Jones
Mr Hills-Jones outlines three red flags that may indicate a face-to-face fundraising scam.
- The individual fundraiser isn't in uniform
- They don’t have a photo ID
- They’re asking for a cash or one-off donation
Face-to-face fundraisers are mandated to behave with professionalism and respect, for example not obstructing members of the public or approaching them where seated.
“Fundraisers need to very clearly explain the role of the charity, why they're asking for money.
“And if the individual person on the street or at the door-to-door doesn't feel that they want to donate, their wishes should be respected.”
If you suspect a fundraising scam, refuse to donate and report it to your local regulator or the national Scamwatch service.
What should I know if I’m raising money for a cause?
Individuals raising money should keep in mind that what counts as regulated fundraising varies across states and territories.
Lawyer Amy Williams, from Justice Connect’s Not-for-profit Law service, advises to always check with your fundraising regulator to see what rules you need to follow.
Unless you’re making a private appeal for money.
“Things like asking your friends or family for money to support a volunteering adventure overseas or fundraising at work if you’ve got an employee who needs to get medical expenses paid for, these are typically not regulated by fundraising laws,” Ms Williams explains.
What are the rules for online appeals?
If you’re launching a fundraising appeal online, for example through a crowdfunding platform, Ms Williams says it’s highly likely you need to comply with fundraising laws across multiple jurisdictions.
If you're crowdfunding online, you might need a licence in each state and territory.Amy Williams
“Some of the crowdfunding platforms will give you guidance, sometimes they're really vague about it and you need to seek your own legal advice.”
Ultimately, she says, online fundraisers should clearly define the intended cause for the money raised, to avoid misleading donors.
“Donors as well should ask the question ‘What is the purpose of this organisation?' So that you can understand where funds will be going.”
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