Fundraising

Associations are set up to achieve a range of objectives, which can include a wide diversity of activities.  As long as the association meets the requirements of being not-for-profit and only undertakes activities in its state of incorporation, the members and management committee are generally free to determine what type of activities are undertaken. 

Associations do not have an unrestricted right to fundraise, even if it is for not-for-profit purposes. This chapter provides information on the legal requirements that associations must take into consideration when planning and carrying out their fundraising activities.

Many associations undertake some form of fundraising in order to help finance their not-for-profit activities, for example, running a raffle, conducting a door-knock, selling food or collecting clothes. 

Examples:

  • The Harmony Community Development Association Inc. holds an annual street collection, organises charity sports events and runs a bingo evening for senior citizens.
  • Kick-it Inc. runs soccer coaching and competitions for under 12 year olds.  The group also undertakes fundraising and runs education sessions in local schools.
  • Sam Point Neighbourhood House Inc. runs educational programmes, school holiday activity programmes, single parent camps and an unemployed workers co-operative.
  • Friends of Lake Boro Inc. publishes a local newsletter, conducts busy bees and collects donations at shopping centres.
  • Care-in-Care Inc. is a large organisation with over 60 staff, delivering services for low-income earners across Perth.  Services include counselling, education, legal advice and emergency relief.  The centre also has two op shops, a refuge and an inner city canteen for homeless people.

Key Points

  • Incorporated associations that wish to raise funds from the public for a charitable purpose must have a licence. 
  • Permission for raising funds in shopping centres must be obtained from the shopping centre management.
  • Fundraising in streets and public places in the metropolitan area requires a street appeal permit.
  • An association must obtain a licence from the local council for a food stall and a licence from the DRGL for a licence to sell alcohol.
  • Additional insurance may be required for fundraising events.
  • Obtaining endorsement from the ATO as a DGR could assist eligible associations with fundraising.

Regulation of fundraising activities

Fundraising activities in Western Australia are potentially restricted by one or more pieces of legislation and regulations, including:

  • the Charitable Collections Act (1946), which regulates fundraising when it is for a charitable purpose;
  • the Street Collections (Regulation) Act (1940), which, as its name implies, regulates all fundraising in the form of street collections;
  • the Gaming and Wagering Commission Act (1987), which imposes controls on fundraising activities such as raffles, bingo and all forms of gambling; and
  • the Liquor Control Act (1988), which imposes controls on fundraising events where liquor is to be sold.

The Acts that might regulate your association’s fundraising depends on what purpose the funds will be used for. For instance, if the fundraising is for a charitable purpose, then your association will need to hold a licence under the Charitable Collections Act.

What constitutes a charitable purpose can be a bit confusing, as there are significant differences between its common law meaning, its meaning under Commonwealth tax legislation, and its meaning under the Charitable Collections Act 1946.

The definition in the Charitable Collections Act 1946 is wide and includes providing assistance to the ill, infirm, poor, or unemployed persons, and to hospitals, kindergartens and infant health care centres. It also embraces various other social welfare and benevolent activities.

However, what is not covered by the definition is just as important. For example, the support of schools or sporting activities is generally not a charitable purpose. So fundraising by a Parents and Citizens Association wanting to buy new computers for its primary school is not regulated by the Charitable Collections Act 1946 and the association would not need to be licensed. But, if your association is raising funds to assist homeless ‘street kids’, then this is fundraising for a charitable purpose and the association would need to apply for a licence.

If you are unsure if your fundraising is for a charitable purpose, you can contact the Charities Area at Consumer Protection on (08) 6251 1407.

Australian Charities and Not-for profit Commission (ACNC)

The Australian Charities and Not-for-profits Commission (ACNC) is the independent national regulator of charities. The ACNC has been set up to achieve the following objects:

  • maintain, protect and enhance public trust and confidence in the sector through increased accountability and transparency;
  • support and sustain a robust, vibrant, independent and innovative not-for-profit sector; and
  • promote the reduction of unnecessary regulatory obligations on the sector.

The role of the ACNC

The ACNC:

  • registers organisations as charities;
  • helps charities understand and meet their obligations through information, guidance, advice and other support;
  • maintains a free and searchable public register so that anyone can look up information about registered charities; and
  • is working with state and territory governments (as well as individual federal, state and territory government agencies) to develop a 'report-once, use-often' reporting framework for charities.

The ACNC is responsible for determining charity status for all federal tax purposes. As part of its status determinations, the ACNC also decides whether a charity is a public benevolent institution (PBI) or health promotion charity (HPC).

The ACNC will be responsible for administering tax concessions relevant to charities, including:

  • income tax exemption;
  • Fringe Benefits Tax (FBT) rebate or exemption;
  • Goods and Services Tax (GST) charity concessions; and
  • Deductible Gift Recipient (DGR) status.

The ACNC’s relationship with other government agencies

The Australian Taxation Office (ATO) remains responsible for deciding eligibility for charity tax concessions and other Commonwealth exemptions and benefits.

There are also many other government agencies that regulate charities and other not-for-profits. For example, government agencies may provide grants and other funding. They may also regulate particular services provided by charities, such as aged care or education.

In Western Australia the Department of Mines, Industry Regulation and Safety regulates Incorporated Associations and Charitable Collections Licences.

Important: It is relevant to note that charities or organisations that solicit charitable donations in Western Australia are still required to obtain a Charitable Collections Licence from the Department of Mines, Industry Regulation and Safety.  Registration with the ACNC DOES NOT preclude this requirement. See Fundraising for more information.

Is your Association or Charity Registered with the ACNC?

If your organisation was recognised (endorsed) by the Australian Taxation Office (ATO) as a charity able to receive charity tax concessions before 3 December 2012, it was automatically registered with the Australian Charities and Not-for-profits Commission (ACNC). This means you don't need to re-register.

The ACNC now registers organisations as charities while the ATO remains responsible for deciding your organisation's eligibility for tax concessions.  You can check if your organisation has been automatically registered by searching the ACNC Register.

You can also check whether your organisation is registered as a charity and which tax concessions your organisation currently receives from the ATO on ABN Lookup.

As part of the automatic registration process, your charity's information has been transferred from the ATO and the Australian Business Register to form its initial entry on the ACNC Register.

Applying for tax concessions from the ATO

Registration with the ACNC is voluntary. However, ACNC registration is now a prerequisite for charities to access charity tax concessions.

A charity must be registered with the ACNC before it can receive any charity tax concessions from the ATO. Many charities may also be eligible to apply for deductible gift recipient (DGR) status. Some DGR categories are only available to registered charities.

You can apply for charity tax benefits including DGR status with the ATO when applying to register with the ACNC.

After the ACNC has decided your charity status, they will pass on your application for tax benefits including DGR status to the ATO. The ATO will decide whether your organisation is eligible.

The ACNC offers a number of key services, including charity registration, a searchable charity register listing registered Australian charities, education and guidance materials. You can keep up-to-date with changes to the ACNC by subscribing to the ACNC Commissioner's weekly column. For more information concerning Charities and Taxation, visit the ACNC website at www.acnc.gov.au.

Fundraising for charitable purposes

Fundraising for charitable purposes in Western Australia is regulated by the Charitable Collections Act 1946. If the charitable fundraising involves a street appeal, then the Street Collections (Regulation) Act (1940) also applies. The Minister for Commerce administers these Acts through the Charitable Collections Advisory Committee, which in turn operates in conjunction with Consumer Protection.

What are the requirements for fundraising?

Your association will need a charitable collections licence if:

  • the purpose of its fundraising falls within the definition of charitable purpose under the Charitable Collections Act (1946);
  • it intends to collect or obtain money or goods (such as aluminium cans or used furniture or clothing); or
  • conducts fundraising for that charitable purpose.
  • The following activities are considered to be a collection under the Charitable Collections Act 1946 and require a licence:
  • the sale of items such as badges, flowers, tokens or any other device for any charitable purpose;
  • charging an entrance fee for functions (such as sports events, fêtes, and concerts) where it is implied that any part of the fee will be applied to a charitable purpose; or
  • advertising a function where it is implied that any part of the proceeds will be donated to a charitable purpose.

For more information about conducting charitable collections refer to the information sheet Charitable Collections – Getting Started.

How does an association obtain a licence?

Technically, an association applies to the Minister for Commerce for permission to fundraise, and the Minister refers the application to the Charitable Collections Advisory Committee.  In practice, however, the application is lodged with the Charitable Collections Licensing section at Consumer Protection and the Committee then makes its recommendations with regard to licensing. 

An application may take up to eight weeks to be processed. A licence is normally issued for three years and may be renewed.  More information about licensing requirements is available from www.commerce.wa.gov.au/charities or by reading Charitable Collections- A guide to licensing.

Fundraising under an existing licence

There may be times when your association wants to conduct a one off or short term appeal for a charitable purpose.

For example to raise money to help someone in need in the community, to assist in disaster relief efforts or for someone who needs urgent medical treatment.

The requirements of the Charitable Collections Act 1946 will still apply but it may not be practical to apply for a licence. It may be better to obtain authority from an existing licence holder to collect under their licence.

For more information visit www.commerce.wa.gov.au/charities.

Reporting requirements

Licensees are required to submit audited financial reports to the Committee at the end of their financial year.  The reports must contain detailed information about the money or goods collected and the way they were distributed.

Code of Conduct

A Voluntary Code of Practice for public fundraising has been developed by Consumer Protection. It provides helpful guidelines to fundraisers on how to conduct fundraising in a responsible and accountable manner.

Other requirements relating to selected fundraising activities

Street collections

The Street Collections (Regulation) Act 1940 applies to any organisation conducting a street collection. However, it only regulates street collections in the metropolitan area. Associations in regional areas should check with their local council.

A permit is required for any street collection in the Perth metropolitan area, regardless of whether or not the proceeds are to be used for a charitable purpose.

For example, a T-Ball club wanting to hold a street collection to raise funds for equipment would need a permit, even though the purpose of the fundraising is not considered charitable.

Please note that the definition of ‘public street’ includes private land that is used by the public for pedestrian traffic. The car parks and footpaths outside a shopping centre are therefore considered to be a street for the purposes of street collections.

An application for a permit can be made to Consumer Protection. The application must set out details on the purpose and locality of the street collection, and any other relevant information. Consumer Protection requires at least six weeks’ notice to allow time for the permit to be prepared and signed.

A report on the amounts received and expenses incurred must be sent to the department within 30 days of the street collection.

Guidelines for street collections:

  • Submit an application form to Consumer Protection.
  • Allow six weeks for the application to be processed.
  • There is no fee.
  • Only one street appeal is allowed for each applicant per year.
  • The permit does not cover collections on private property, such as inside shopping centres.
  • Collectors must wear an identification badge.
  • Collectors may not be paid.
  • Only children over the age of 16 are allowed to collect during a street appeal.
  • If an association wants to set up stalls, it must obtain a separate permit from the relevant local council.

For more information contact:

Department of Mines, Industry Regulation and Safety - Charities Area
Locked Bag 14
Cloisters Square Perth WA 6850
Tel: (08) 6251 1407
Web: www.commerce.wa.gov.au/charities
Email: charities@dmirs.wa.gov.au

See the Consumer Protection website for more information about street collections or download the application form.

Door-to-door collections

Associations that are licensed to raise funds from the public for charitable purposes may carry out door-to-door collecting from households. Collectors are allowed to collect between the hours of 9am and 6pm on Mondays to Saturdays only and must wear an identity badge. Children under the age of 16 may not act as door-to-door collectors.

More information on some of the requirements of collecting from private residences is available on Consumer Protection’s website.

An association that does not hold a charitable collections licence may also collect door-to-door, provided that it does not collect for a charitable purpose. For example, P&C and sporting associations would typically not need a licence. As such, the requirements of the Charitable Collections Act do not apply to these groups when collecting door-to-door. It is worth remembering, however, that the best donors are happy donors, and following the Consumer Protection guidelines will help to ensure that your collectors will be welcomed next time they knock on the door!

Fundraising in shopping centres

Shopping centres are good places for raising funds because of the large numbers of people passing through. Associations that wish to fundraise in a shopping centre must obtain permission from the shopping centre management office, but at the moment no other permits are required.

Shopping centres have their own policies on providing space for fundraising. As shopping centres are so popular and space is limited, it is essential to plan well in advance. It can take 12 months to obtain a space. Shopping centres will generally require public indemnity insurance (refer to Insurance and Risk Management).

A voluntary Code of Conduct has been developed by Consumer Protection that provides guidelines to fundraisers and shopping centre managers to deal with requests for space in shopping centres for fundraising.

Lotteries and games

Lotteries (raffles) and games, such as bingo, are popular fundraising activities. The Gaming and Wagering Commission Act 1987 provides permits to charitable groups, community based organisations and sporting bodies for the purpose of raising funds from gaming related activities.

The gaming activities covered by the Gaming and Wagering Commission Act 1987 include:

  • standard lotteries;
  • continuing lotteries;
  • trade promotion lotteries (e.g. a colouring in competition or entries drawn randomly from a barrel);
  • video lottery terminals;
  • bingo;
  • two-up;
  • sweepstakes;
  • gaming functions; and
  • football tipping competitions and minor fundraising activities.

Associations wishing to raise funds from one of these activities will in most cases need to obtain a permit from the Department of Local Government, Sport and Cultural Industries - Racing, Gaming and Liquor (RGL). Funds raised must be for charitable purposes, or for a purpose that is not for private gain or a commercial undertaking. In making an application for a permit, your association will be required to provide a copy of the rules of association or certificate of incorporation to show that they are a genuine group.

There are different application forms, conditions and fees for each lottery and gaming activity. It is important to complete the correct form/s, which can be obtained from RGL or downloaded from its website.

Minor fundraising activities, which include football tipping competitions where the total prize money is less than $10,000 and raffles under 24 hours' duration, do not usually require a permit.

However, check with RGL if you are not sure whether or not you require a permit for your activity or you could be liable for a fine.

Department of Local Government, Sport and Cultural Industries - Racing, Gaming and Liquor
PO Box 6119
East Perth, WA 6892
Tel: (08) 6551 4888

Selling food at fundraising events

Selling food is a very popular and profitable way of raising funds, whether it is a cake sale, a sausage sizzle, an occasional food stall or a large food and wine festival. However, preparing and selling food requires very careful handling and preparation for reasons of hygiene and safety. The following laws regulate fundraising activities, involving the preparation and supply of food in Western Australia:

  • the Health Act 1911;
  • the Health (Food Hygiene) Regulations 1993; and
  • the Australia New Zealand Food Standards Code.

Associations that are planning to organise temporary food stalls need to obtain a permit from their local council. Councils will also probably be able to provide the association with general guidelines on preparing and selling food. Ask to speak to the environmental health officer.

The following aspects need to be considered when planning a food stall and submitting an application for a permit:

  • the type of food products to be sold;
  • the people who will be preparing and selling the food;
  • equipment required;
  • purchasing and transporting the food;
  • the nature of the facilities to be used;
  • procedures and equipment for handling food;
  • temperature control of hot and cold food;
  • presentation and storage of food;
  • labelling food;
  • cleaning requirements and equipment; and
  • rubbish and waste water disposal.

Food Standards Australia New Zealand have produced a number of fact sheets for charity and community based organisations on matters relating to food safety, including a specific fact sheet on sausage sizzles and barbeques.

Serving alcohol at fundraising events

If the fundraising activity or event also includes selling and supplying alcohol, it will be necessary to obtain a liquor licence. The DRGL grants licences under the Liquor Control Act 1988 which regulates the:

  • sale, supply and consumption of liquor;
  • use of premises on which liquor is sold; and
  • services and facilities provided in conjunction with the sale of liquor.

Incorporated associations organising fundraising events at which liquor will be sold will need to apply for an occasional licence. This is a licence for people/associations that do not hold any other licence under the Liquor Control Act 1988.

An occasional licence permits the sale of liquor at a function, which means a 'gathering, occasion or event, including a sporting contest show, exhibition, trade or other fair or reception, at which liquor is sold and supplied.

Applying for an occasional licence to sell alcohol

  • You can download an application kit from the occasional licence section of the DRGL website or complete the application online.
  • The form must be completed and submitted with the prescribed application fee.
  • Written consent must be obtained from the owner or person having control over the premises where the liquor will be sold.
  • If the function is to be held outdoors, a map of the licensed area must be submitted.
  • Local council consent is required for the use of public land.
  • The local police must be informed of the proposed function if more than 100 people are expected.

Other matters for consideration

Commercial fundraisers

Commercial fundraisers are not presently required to be licensed under the Charitable Collections Act 1946. Any agreement between an association and a commercial fundraiser is subject to contract law, and associations should seek legal advice before entering into agreements.

Consumer Protection has developed some guidelines for consideration by associations contemplating entering into an agreement with a commercial fundraiser. These guidelines are available on Consumer Protection’s website.

Bequests and gifts

Some incorporated associations obtain funds though gifts and bequests. A bequest is a gift of property in a will. While this is a valid means of acquiring funds, it is very important for associations to ensure that gifts and bequests have been given to the association without any undue influence or coercion. If challenged, courts will look very closely at gifts and bequests received by associations to ensure that they were given freely and with the person's full knowledge and intention. It will be more difficult for associations to claim gifts and bequests that are given by elderly people, people with intellectual disabilities and people with limited experience and education.

If an incorporated association is planning to raise funds through a request for gifts and bequests, it is essential to discuss the project with a solicitor and to have the solicitor draft all the necessary documents (e.g. letters of request, forms and promotional material) in order to avoid legal pitfalls. It may also be beneficial to apply to the Australian Taxation Office for endorsement as a Deductible Gift Recipient (DGR).

And remember, if the request for gifts and bequests indicates that the funds will be used for a charitable purpose, the association will need a charitable collections licence before it commences mailing out any material.

DGR status

Incorporated associations that qualify as a DGR can receive tax-deductible gifts. This can make them more attractive to donors wishing to claim an income tax deduction for the gift, for example, sponsors and private donations.

To be a DGR, an association must either be:

  • listed in income tax law as a deductible gift recipient; or
  • endorsed by the ATO as a deductible gift recipient.
  • ATO endorsement requires the association to:
  • be covered by one of the eligible categories (e.g. an animal welfare charity);
  • have an Australian Business Number (ABN);
  • maintain a gift fund into which all gifts are deposited;
  • make provision in the rules that, upon dissolution, all property (including the gift fund) be given to another deductible gift recipient;
  • provide in the rules that the Tax Commissioner will be informed of material changes to the rules and winding-up;
  • be located in Australia; and
  • make application to the ACNC for deductible gift recipient status, as this is not automatic.
  • Some associations may not have deductible gift recipient status as a whole, but its smaller units may be eligible.

More information concerning Deductible Gift Recipients can be found on the ATO website. You can also download an application form to apply for endorsement as a Deductible Gift Recipient. Information on how to apply for an ABN is provided in Taxation.

Insurance

A fundraising activity may involve the need to take out specific, one-off insurance, if the event is not going to be covered by existing policies. Before you go ahead with an event, find out what your association's insurance policy covers and what additional cover is required. Personal injury, product liability and cover for volunteers are particular areas to consider.

If using sub-contractors, check what insurance they have. If an association contracts a local church group to make lamingtons for sale and a disgruntled member of the public sues because the lamingtons made him/her sick, the association may be as liable as the church group, which may or may not have insurance.

Insurance topics are covered in more detail in Insurance and Risk Management .

Local authorities

Certain activities may require local government approval for fundraising. This is likely to be the case when using a public space and/or in relation to local health, noise, safety or traffic by-laws.

A case study

An association has planned the following fundraising events:

  • a children's colouring-in competition for International Environment Day;
  • a raffle to raise funds for the annual camp for children with disabilities, with tickets to be sold in local shopping centres; and
  • a Harvest Festival to celebrate harvest time. The Festival will have food and wine stalls, games and craft stalls.

The association will need to:

  • obtain a licence for charitable fundraising;
  • apply for a trade promotions lottery licence for the colouring-in competition;
  • apply for a standard lottery licence for the raffle and apply to the shopping centres for space and permission to sell tickets;
  • apply for an occasional liquor licence to sell alcohol at the festival; and
  • apply for a temporary food stall licence to sell food.