Welcome changes to fundraising registration and reporting for charities in Victoria
07 August 2020
The Victorian government has passed the Consumer Legislation Amendment Act 2019 (Vic) (the Act). The Act, which received assent on 3 December 2019, makes some welcome changes to the Fundraising Act 1998 (Vic) (the Fundraising Act).
We commented on these changes when they were being considered by the Victorian parliament in November 2019.
The Act amends the Fundraising Act to provide for changes that affect four separate stages of the fundraising cycle - registering as a fundraiser, conducting fundraising appeals, annual reporting and using commercial fundraisers.
Registering as a fundraiser
The Act streamlines the registration process for charitable fundraisers.
Organisations already registered with the Australian Charities and Not-for-profits Commission (ACNC) will no longer need to go through separate steps to register as a fundraiser with Consumer Affairs Victoria (CAV). Instead, they will only need to notify CAV of their intention to fundraise in order to be considered a registered fundraiser. They will be recognised as a registered fundraiser until they are deregistered as a charity with the ACNC, or deemed to no longer be a registered charity by CAV.
This change will see a reduction in red tape for ACNC-registered organisations who run fundraising appeals in Victoria. This is a positive step to simplify fundraising laws.
For non-ACNC charities (for example, not-for-profit sporting clubs) the existing registration process continues.
Conducting fundraising appeals
Under the Act, an ACNC-registered charity will be required to give a ‘notice of intention to conduct a fundraising appeal in Victoria’ to CAV and CAV will be taken to have registered the entity as a fundraiser. This suggests that the fundraiser will be able to (broadly speaking) conduct any appeals it needs to, as long as each appeal complies with the Fundraising Act (section 25).
Reporting to CAV
At present, some ACNC-registered charities registered as fundraisers in Victoria report to both CAV and the ACNC on their fundraising activities. Charities that are Victorian incorporated associations no longer need to duplicate reporting to both CAV and ACNC.
The Act (section 37) attempts to simplify the reporting process for ACNC-registered charities’ reporting requirements. Under this change, the Director of CAV and the Commissioner of the ACNC ‘may enter into an agreement’ about how an ACNC-registered charity will provide the required information (under the Fundraising Act) to the ACNC and how the ACNC will provide this information to CAV. The required information would most likely include information such as annual statements.
While this is a positive step that appears to introduce a mechanism to reduce red tape for charities, unless CAV and the ACNC reach an agreement, charities could continue to be required to report to both CAV and the ACNC unless CAV and the ACNC reach an agreement. Since charities that are Victorian incorporated associations are already relieved from duplicate reporting to both CAV and ACNC, it seems burdensome and illogical to introduce a provision that may (or may not) change the position for other ACNC-registered charities.
This is an unfortunate missed opportunity to guarantee a red tape reduction. The requirement for an agreement between CAV and the ACNC will create further delay and an agreement is not guaranteed.
Using commercial fundraisers
The Act (section 40) will give CAV the power to deregister ACNC-registered organisations as fundraisers if they have ‘paid an excessive commission or other remuneration to a collector or commercial fundraiser’. ‘Excessive commission’ is not defined.
While the intention behind this policy has merit, we remain concerned about the wording of the provision. There is no guidance around how to determine whether commission or remuneration is ‘excessive’. Apart from a lack of clarity about the meaning of ‘excessive’, the impact of this provision is significant and includes loss of fundraising registration.
Many charities effectively and efficiently engage third parties to help with their fundraising efforts. It’s often more economical to use a third party commercial fundraiser than to employ and train staff, especially if it’s for a short campaign. There is considerable research to show that - while the cost of third party engagements can sometimes equate to the donation value for the first year of engagement - when taken over the lifetime of the donor (typically several years), the cost is less than if the charity employed staff. There can be a good cost-benefit return for the charity.
The enactment of this provision will raise concerns for charities using commercial fundraisers, which may add to costs for charities.
When will these changes come into effect?
These changes will be effective from a date to be announced. If a date isn’t announced and these changes don’t come into effect before 31 August, they will come in into effect on that date.