Background and previous inquiries
Issues relating to the regulatory framework governing fundraising activities
in Australia have been the subject of discussion and review over a number of
years. This chapter provides background on relevant previous parliamentary inquiries
and government reviews that have examined these issues over the last decade.
Disclosure regimes for charities
and not-for-profit organisations – Senate Economics References Committee
In 2008, the Senate Economics References Committee undertook an inquiry
into disclosure regimes for charities and not-for-profit organisations,
examining current governance and disclosure models for this sector in Australia
and possible improvements to the regulatory framework. The committee examined
fundraising legislation in Australia and noted concerns from the sector about
the difficulties of complying with multiple state and territory-based
The committee recommended that a National Fundraising Act be developed
following a referral of powers from states and territories to the Commonwealth.
It recommended that such a national act should include the following minimum
it should apply nationally to all organisations;
it should require accounts or records to be submitted following
the fundraising period with the level of reporting commensurate with the size
of the organisation or amount raised;
it should include a provision for the granting of a license; and
it should clearly regulate contemporary fundraising activities
such as internet fundraising.
Contribution of the Not-for-profit
Sector – Productivity Commission Research Report January 2010
In March 2009, the Productivity Commission was tasked by the Australian
Government with assessing the contribution of the not-for-profit sector and
impediments to its development in Australia. The Productivity Commission's
final report, released in January 2010, advocated for the harmonisation of
fundraising legislation in Australia:
Fundraising legislation differs significantly between
jurisdictions, adding to costs incurred by the [not-for-profit] sector.
Harmonisation of fundraising legislation through the adoption of a model act
should be an early priority for governments.
The Productivity Commission suggested this approach due to the
difficulties associated with achieving truly national legislation through the
referral of powers to the Commonwealth from states and territories:
The Commission is attracted to a national fundraising act, although
it is reluctant to recommend this as an immediate change. State and territory
governments would be understandably hesitant to cede this power to the
Commonwealth without knowing what form such national legislation might take.
This reluctance would be lessened if these governments had already agreed to a
harmonised set of legislation that would form the basis of a nationally
applicable model act. A model act (with limited exceptions) could provide
national consistency and yet still allow states and territories to control
local, jurisdiction-specific small fundraising activities.
The Commission suggested that governments proceed to a nationally
consistent approach to fundraising in a staged manner:
First, the states and territories develop harmonised fundraising
legislation through the adoption of a model act.
Second, the states and territories mutually recognise (in
conjunction with the Australian Government) the fundraising approval granted in
other jurisdictions, supported by a national register of cross-jurisdictional
fundraising organisations and/or activities.
Finally, the states and territories could refer their powers to
the Commonwealth to enact national fundraising legislation, based on the
harmonised legislation agreed to by the state and territory governments and
regulated by a Commonwealth body.
Research reports commissioned by
In 2013, the Commonwealth charities regulator, the Australian Charities
and Not-for-profits Commission (ACNC), embarked on a research program to
measure the red tape burden on charities in Australia and identify target areas
for red tape reduction. Two research reports conducted as part of this program
considered fundraising regulation and its effect on red tape in the sector.
The first of these, a research report into Commonwealth regulatory and
reporting burdens on the charity sector, was undertaken by Ernst & Young on
behalf of the ACNC and published in September 2014. The report noted concerns
in the charitable sector about fundraising regulatory and reporting
requirements, and concluded:
Our research revealed that a number of key
inter-jurisdictional regulatory issues (such as fundraising regulation) remain
a concern for charities. Progress on resolving these issues, however, appears
stalled. There would thus appear scope for the charity regulator to adopt an
'honest-broker' role, and revive and drive reform on such issues as fundraising
regulation. This could be achieved by commissioning research on the costs of
the current fundraising regulatory framework, and/or holding national workshops
with charities to build the case and options for reform.
A second research report was conducted by Deloitte Access Economics on
behalf of the ACNC, with the final report published in February 2016. This
report examined options to align the regulatory obligations of the ACNC and
states and territories. Fundraising was one of the three key areas of focus for
this report, which found:
Overwhelmingly, fundraising is the source of the greatest
amount of regulatory burden for charitable organisations. Fundraising
legislation differs significantly between jurisdictions, which very quickly
escalates the administrative costs a charity incurs. Consequently, the annual
regulatory burden associated with fundraising regulations is estimated at
approximately $13.3 million per year across the sector.
Fundraising regulation has not kept pace with new forms of
fundraising, particularly as online campaigns for funds have grown through the
use of third party websites. The current arrangements treat fundraising as an
activity isolated to one state or territory, when, in reality, even small
organisations may attract interest nationally and internationally
through online channels such as crowdsourcing websites.
The report identified three options for aligning the regulatory
obligations of the ACNC and states and territories.
Option 1 – ACNC obligations fulfil
state and territory regulatory requirements
This option would seek to make use of existing Commonwealth regulatory
processes and obligations by allowing charities to achieve compliance with
individual state and territory regimes through meeting ACNC obligations.
In relation to fundraising regulation, this option is explained as follows:
Option 1 will seek to implement an agreement with states and
territories where reporting obligations will be satisfied by meeting the
equivalent ACNC requirements. In practice, this would mean charitable
organisations could use ACNC reporting requirements to satisfy state and
territory reporting obligations, with state and territory variations embedded
in the ACNC's reporting template. Applications to fundraise would continue to
be managed at the state and territory level according to the relevant
legislation; however status as a charitable organisation would be met through
registration as a charity with the ACNC.
Implementation of this option would lead to an estimated annual saving
of $5.04 million for the sector in regulatory compliance costs, through
the elimination of duplicative reporting requirements.
Option 2 – Alignment of state,
territory and ACNC regulatory obligations
This option would aim to align current processes at each jurisdictional
level with best practice, while retaining the structure of state and territory
oversight. Under this option, states, territories, and the ACNC would agree on a
common approach to regulation across the three areas (including fundraising),
which would address issues of duplication and inconsistency across different
If implemented, processes that determine how fundraising activities are
undertaken in each jurisdiction would be aligned between state and territory
regulators, and these processes would be aligned with ACNC reporting
requirements to reduce the amount of administration involved.
Full implementation of this option would lead to an estimated annual saving of
$8.5 million for the sector in reduced regulatory compliance costs. The
report noted, however, that:
While this [option] reduces regulatory burden by
approximately $8.5 million a year, it requires consensus from each state
and territory to achieve this reduction. At present, there is no conceptual
underpinning between jurisdictions on the common goal of regulation, and what
the scope of the regulated activity should be. Should one state be hesitant
about moving towards a common regulatory approach, the benefits associated with
the change would be significantly reduced.
Option 3 – ACNC as a central
Under this option, oversight of various aspects of charities regulation
would be transferred to the ACNC from state and territory management. In
relation to fundraising regulation, this proposal is explained as follows:
Fundraising regulation would be unified by transferring
oversight capacity from all states and territories to the ACNC through a
referral of powers. Under this scenario, it is envisaged that, as the national regulatory
body, all charities registered by the ACNC could apply for a [licence] to
fundraise in every state and territory via the ACNC registration process. In
doing so, they would be required to comply with an agreed set of requirements
in undertaking and reporting on the fundraising activity.
This option would require the development of a single set of rules
covering the definition of fundraising activities, the way in which such
activities must be undertaken, and financial reporting requirements. It would
make a charitable organisation's ability to undertake fundraising dependent on
registration with the ACNC.
Implementation of this option would lead to the greatest reduction in
regulatory compliance burden, with estimated annual savings of $10.8 million
for the charitable sector.
Australian Consumer Law Review –
The Australian Consumer Law (ACL) is Australia's first nation-wide
consumer protection law, which commenced operation in January 2011.
In June 2015, consumer affairs ministers, through the Legislative and
Governance Forum on Consumer Affairs (CAF),
asked Consumer Affairs Australia and New Zealand (CAANZ)
to initiate a broad-reaching review of the ACL. The review's final report was
delivered in March 2017, and commented on several issues relating to the
application of the ACL to fundraising activities.
CAANZ explained in the review's final report that the ACL generally
applies to conduct undertaken 'in trade or commerce'; and that in many cases,
the activities of fundraisers in seeking donations are captured by general
provisions of the ACL that do not require a supply of goods or services (including
provisions prohibiting unconscionable conduct, and misleading or deceptive
It noted, however, that there are legal complexities in this area particular to
charitable and not-for-profit fundraising, and that the charitable sector faces
widespread uncertainty in determining how the ACL applies in practice.
CAANZ noted the 'immediate need for regulatory guidance' on the extent
to which the ACL covers the activities of the charitable, not-for-profit and
fundraising sector, and how regulators will approach compliance and enforcement.
CAANZ proposed to develop this regulatory guidance as a priority project for
2017, with a view to subsequently assessing the effectiveness of this guidance
and whether any amendment to the ACL is necessary in 2019–20.
This proposal contained in CAANZ's final report on the ACL review was noted by
ministers at a CAF meeting in August 2017.
This regulatory guidance was developed by CAANZ members and subsequently
released in December 2017. The Guide to the Australian Consumer Law for
fundraising and other activities of charities, not-for-profits and fundraisers
sets out 'general principles and examples to assist the charity and fundraising
sector in understanding its obligations under the ACL'.
The guidance states that in general, an organisation's fundraising
activities are likely to meet the legislative definition of 'trade or commerce'
and hence attract certain obligations under the ACL if the organisation:
engages in a fundraising activity involving a supply of goods or services; is a for-profit professional
fundraiser; or is fundraising in an organised, continuous and repetitive
The obligations required by the ACL in such circumstances include that
must not engage in misleading or deceptive conduct or
unconscionable conduct; and
if the organisation's fundraising activities also involve
supplying goods or services, it must not make false or misleading
representations or engage in unconscionable conduct in relation to the supply
of those goods or services.
Strengthening for Purpose:
Australian Charities and Not-for-profits Commission Legislation Review 2018
In December 2017, the Australian Government announced an independent
review of the Australian Charities and Not-for-profits Commission Act 2012
(Cth) and the Australian Charities and Not-for-profits Commission
(Consequential and Transitional) Act 2012 (Cth) (together, the ACNC Acts).
The Panel undertaking the review were tasked with examining the objects of the
ACNC Acts, the regulatory framework established by the ACNC Act to achieve
those objects, the powers of the ACNC, and whether any legislative changes were
required to address issues raised by the review.
On 22 August 2018, the Australian Government tabled the report and
recommendations of the review panel. The panel noted that the ACNC does not
regulate fundraising activities of charities. Nevertheless, the panel
considered fundraising in its review because of:
...the direct impact that the current framework has on the
sector, object 3 of the ACNC Act ('to promote the reduction of unnecessary
regulatory obligations on the Australian not-for-profit sector') and the
overwhelming stakeholder concerns raised.
The panel considered that the most appropriate mechanism for reform is
through the Australian Consumer Law (ACL) framework. The panel refuted the ACCC's
arguments against this approach,
The Commonwealth Government has an opportunity to reduce red
tape for the sector by taking a leadership role in working with State and
Territory governments to harmonise fundraising laws. By amending the ACL to
ensure application to fundraising activities, working with the States and
Territories to repeal or amend existing fundraising laws, and developing a
mandatory Code of Conduct, the Commonwealth can significantly reduce the
administrative burden on the sector.
A mandatory Code of Conduct on fundraising should be
developed as a priority. Whether the Code sits under State and Territory
fundraising legislation as a Uniform Code, or the Competition and Consumer Act,
the Panel would expect that it would reflect best practice, and be flexible
enough to set ethical standards in relation to new and emerging technologies
and practices, such as crowd funding, commission-based face-to-face
fundraising, telephone fundraising and third party commercial fundraising.
Local councils should be involved in the development of the Code to ensure that
public nuisance issues of fundraising in public spaces are addressed. The Panel
considers that the responsibility for enforcement remains with State and
Both Victoria and New South Wales have indicated support for
national reform of fundraising legislation and the ACNC has made some progress
with South Australia, Tasmania and the ACT. Leadership from the Commonwealth
will build on this progress and see the move toward a national scheme come to
The review panel made 30 recommendations in its report. Relevantly, the
The Australian Consumer Law be amended to clarify its
application to charitable and not-for-profit fundraising and a mandatory Code
of Conduct be developed.
The use of the Charity Passport by Commonwealth departments
and agencies be mandated.
Responsibility for the incorporation and all aspects of the
regulation of companies which are registered entities be transferred from the
Australian Securities and Investments Commission (ASIC) to the ACNC, except for
A single national scheme for charities and not-for-profits be
The Commonwealth Government has not yet provided a formal response to
the ACNC Legislation Review.
CAF ministers noted the review at a meeting on 26 October 2018, and
The Commonwealth Government has not formally responded to the
ACNC Act review panel report. While awaiting that response, CAANZ members will
consider any potential regulatory gap for their local charitable fundraising
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