The head of Fair Trading NSW has warned charities will face stiffer penalties for failing to comply with the rules, and in return will enjoy reduced red tape when fundraising rules change next week.
Authorities will receive more powers to investigate breaches, inspectors will be able to issue a wider range of fines and compliance notices, while penalties for those who have done the wrong thing will increase.
The overhaul follows the 2017-18 Bergin inquiry into the misuse of funds within RSL NSW and subsequent cover-up, which found there had been a decade of “sheer ineptitude and cronyism” inside the RSL.
Comedian Celeste Barber raised $51 million for bushfire relief but a court ruled it could only go to the NSW Rural Fire Service.Credit: Hugh Stewart
The July 1 changes also respond to the high-profile case of comedian Celeste Barber, who raised a staggering $51 million in her Black Summer bushfire fundraiser. A court later ruled the money could only go to the Rural Fire Service and not other charities or fire services, because the RFS was the stated recipient on the fundraising page.
NSW Fair Trading Commissioner Rose Webb said the mistake “wasn’t really [Barber’s] fault” and the new rules will make it very clear to fundraisers that they must be specific from the start about where the money is going.
“They’ll get a stronger prompt that you’re putting your word on the line here; it’s not just a vague statement about what you’re doing,” she told The Sun-Herald.
Penalties for conducting unlawful appeals, raising money for personal benefit and making false representations about fundraising will quadruple to $22,000. Individuals who misuse charitable funds for other purposes face the same fines and up to two years in jail.
Ms Webb said charities - especially smaller ones - were often confused about their obligations. To that end, the reforms also attempt to simplify the system and reduce red tape.
“It’s a carrot and stick approach,” Ms Webb said. “[We] recognise it’s a bit bureaucratic having both state and Commonwealth in this game and [we want to] harmonise where we can.”
From Thursday, charities registered with the national Australian Charities and Not-for-profits Commission will automatically be eligible to raise funds in NSW. They will no longer need to demonstrate they are a fit and proper person separately to state and federal authorities.
Most breaches of fundraising laws were unintentional and the result of ignorance rather than outright scams, Ms Webb said. Nevertheless, opportunistic scammers still tried to take advantage of generous donors, especially during disasters.
“The victims tend to be people on the kind-hearted, altruistic end of the spectrum who maybe aren’t cynical enough to say ‘hand over your fundraising permit before I give you money’,” Ms Webb said.
Last month Coffs Harbour woman Ms Yvonne Hall avoided jail but received a 16-month intensive correction order after pleading guilty to misappropriating nearly $150,000 through her World War I charity.
The Pozieres Remembrance Association purported to sell commemorative bricks for a memorial garden in Pozières, France, where nearly 7000 Australian soldiers died in WWI. The bricks never materialised and several donors complained to Fair Trading.
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