Commissioner's Blog: Licence needed for charity collections
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When we hear about a tragedy – from a bush fire or floods to someone badly injured by a coward’s punch or deaths in a terrorist attack – it’s normal to want to help those affected and giving or collecting money may seem the most practical way to do so. But cautionary tales from donors and collectors highlight the importance of our charity licensing laws.
Consumer Protection is here to help people navigate the correct way to safely go about helping those in need.
Knowing there’s a go-to licensed charity collection for a specific natural disaster or violent crime- incident can protect us from scams. Recently scammers posed as officials collecting for the City of Melbourne’s Bourke Street Fund but the Victorian Government’s promotion of its licensed collection via a secure online payment system at https://www.vic.gov.au/bourkestreet prevented monetary loss.
When a charitable collection is licensed it has to lodge financial statements to show money is being spent as it should be and that only reasonable operating costs are deducted. Making charities accountable in this way also helps to protect them from criticism about funds not being used appropriately.
Well-meaning Western Australians trying to raise money for others have ended up out-of-pocket because they didn’t get a charitable collection’s licence or ask an established charity for a ‘licence-loan’. Examples include:
- A WA mum decided to raise money for children in war-torn Syria through online T-shirt sales. Payment collection service – Paypal – asked her for proof of a charity licence required in Australia. As she did not have a charity licence, Paypal reversed the payments received, in a bid to protect donors from potential fraud.
- A woman set up a Go Fund Me page to raise money for the funeral of a murdered Perth teenager and this collection was promoted by the media. Hundreds of people donated in excess of $15,000. Donors then questioned how the money was spent and were critical of decisions and some even sought donation refunds. Go Fund Me retrieved those donations from the collection organiser’s credit card but because all money raised had already been passed on to the murder victim’s family the organiser was left in debt.
Tips for donors
- Use secure payment systems via official websites of recognised, licensed charities. Do NOT respond to random emails, website links, social media campaigns or phone calls.
- Haven’t heard of a charity before? Check WA’s licensed charities register at www.commerce.wa.gov.au/charities before donating.
- Report unlicensed charity collections to Consumer Protection or complain to a crowd funding website if you think a campaign is a scam.
- When donating to a charitable collection or buying a ticket for a local fundraising event ask about the charity licence it is being run under. If the organiser hasn’t got a licence tell them to contact Consumer Protection for help by phoning 08 6552 9364 or emailing firstname.lastname@example.org.
- Ask face-to-face collectors for proof of identity and permission to collect, such as a street collection permit or authorisation letter from a licensed charity.
Tips for collectors
- To run a one-off, short-term fundraiser, approach an existing licensed charity, such as a Rotary Club, to ask to collect under their authority.
- For crowd funding campaigns we recommend Everyday Hero which connects the fundraising campaign to established charities.
- Charitable organisations wishing to authorise fundraising activities under their charity licence should download the Guidance Pack at www.commerce.wa.gov.au/charities
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