Governance & Fundraising Regulation In Australia

Laws, regulations and best practice have been a massive focus of the discussion around fundraising and charities in recent years - and for good reason. When a charity is discovered to have misused funds or partook in questionable practices - even if they’re technically legal - it casts a dark shadow over the entire sector, which can have long-lasting implications.

 The laws and regulations affecting charities and fundraisers in Australia are ever-changing and cover everything from taxation, credit card funds collection, face-to-face fundraising, prize values and beyond. It’s a lot to cover in a post, but let’s look at some of the basics.

What is a DGR?

A cornerstone of Australia’s fundraising regulation, DGR is a good place to start. Standing for Deductible Gift Recipient, DGR refers to organisations that are certified as eligible to receive ongoing financial and in-kind gifts. The benefit of this is two-fold; firstly, donations to a DGR organisation are tax-deductible and therefore much more appealing, and secondly, DGR organisations can apply for special grants.

So, are all charities granted DGR status? You might think so, but only certain charities are automatically qualified as DGRs. These include welfare organisations that assist the disadvantaged, private philanthropic funds and funds that build and maintain educational facilities, among others.

If an organisation doesn’t fit these criteria, they can apply for DGR status through the Federal Treasury. Provided they meet specific standards, they may be given the coveted DGR title, which can have a massive positive impact on their fundraising ability.

What is PCI compliance?

Another hot topic regarding governance of non-profits in Australia is PCI compliance. PCI stands for Payment Card Industry and being PCI compliant essentially means you ensure your customers’ credit card and personal data is kept secure. If an organisation accepts card payment and stores or processes cardholder data, they must ensure they do so on a PCI compliant server.

Because they handle a lot of donations, PCI compliance is essential to charities and non-profits. If there’s a data breach and customers’ financial information is jeopardised, the reputational damage to the entire sector can be difficult to recover from. Following several high-profile cases, data integrity and cyber-security is the issue du jour - so it’s integral you ensure you’re well protected. 

There are various levels of PCI compliance, the most secure of which is PCI Level 1. As a business with PCI Level 1 status, FrontStream’s clients can relax, knowing their donor’s information is safe and secure – as is their reputation and donor confidence!

Other laws surrounding fundraising in Australia

Because of how Australia’s Government is structured, each state and territory have different legislation around fundraising. These can affect who is eligible to fundraise, how they can do so, and many other various laws and regulations that can make it difficult to run a National campaign if you’re not prepared. To make matters even more complicated, each state and territory imposes these laws via a different regulator, opening them up to another level of interpretation and scrutiny.

For most states and territories, specific approval is required to undertake fundraising activities. As a general guideline, fundraisers need to:

  • Ensure their fundraising campaigns are honest, make no misrepresentations, and comply with requirements for adding registration numbers to advertising materials, packaging or communications;
  • Apply high standards of governance and risk management to their campaigns, including considering whether people involved are suitably qualified and of proper character and whether appropriate safety measures have been taken to protect people involved;
  • Meet specific legal requirements for engaging children in fundraising and make sure there are appropriate risk management steps in place where children are involved;
  • Meet all taxation, auditing, and legal reporting requirements for funds raised;
  • Apply the funds raised directly to the promised beneficiaries or purposes for which they were raised; and,
  • Comply with Australian Consumer Law.

While these may seem like common sense, they’re just a small amount of the full list, accounting for regional variation. While you might think you’re compliant in all states and territories, many organisations can get ‘tripped up’ by not paying enough attention to the fine print.

It’s not all one way, though! There are plenty of exemptions, allowances and incentives out there for charities to take advantage of, providing further opportunities for growth and development. 

The business of running charities is a serious one and, with the rise of digital fundraising, large corporate donations and more, it’s becoming an increasingly regulated space. While these might seem like a burden of red tape, without the right protections in place, donors, charities, and the general public are open to abuse. With proper support from experts and attention to the nuances of the law, charities can ensure the sector is protected and kept sustainable for many years to come.    

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