A Quick Guide to Charities and Crowdfunding

Take one look at a crowdfunding page such as GoFundMe or Kickstarter and you will find many people and organisations requesting donations to a worthy cause – sending a sick child to Disneyland, providing funeral expenses to a grieving family or putting an underprivileged child through school. While this popular method of fundraising has major benefits, there are some things that should be considered before not-for-profits or donors choose to participate. 

In July 2017 the ACNC released guidance asking not-for-profits to be careful when using these websites to fundraise. Not-for-profits should make sure they have researched the crowdfunding website they will use and familiarise themselves with the terms, conditions and fees that apply to the campaign.

Board members or the relevant staff of not-for-profits should also ask themselves what will happen if the online fundraising campaign falls short of its target, or if the amount collected exceeds the online target. Failure to apply the proceeds of the campaign to a charitable purpose could breach the fundraising legislation in that state or territory. At the very least, it could result in some very unhappy donors.  

Charities and not-for-profits must also consider whether they possess the relevant authority to fundraise in the states and territories of Australia. Since the concept of an online fundraiser was not contemplated when fundraising legislation was first drafted, many states and territories have been slow to update their legislation and adapt to this form of fundraising. For example, a NSW charity with an online crowdfunding campaign that receives donations from donors in Western Australia may actually be breaching Western Australian fundraising legislation if the charity does not hold the appropriate Western Australian licence.

If you are unsure of what fundraising licences or permissions your not-for-profit needs, or want to know about how recent changes to state and territory legislation could affect you please contact %8D%C1%D1%B8%BC%D3%BB%CED%B0%D0%E1h%94%A5%CA%95%D1q.

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