Fundraising

What is fundraising?

Victoria’s fundraising law refers to ‘fundraising appeals’, which is an old and confusing phrase. It might be more useful if your organisation thinks of it as meaning the same as ‘fundraising activities’. A 'fundraising activity' can be a single event over a limited period fo time or an ongoing activity.   

In general, fundraising activities are activities where your organisation:

• asks the public for, or receives from the public;
• money or other benefits such as goods or services;  
• on the basis that the money (or goods or services) are not being sought solely for profit or commercial benefit.

In general, if your community organisation is asking for or receiving funds to use for its ‘not-for-profit’ purposes it will be conducting fundraising activities. If so, you may be required to register as a ‘fundraiser’ under Victoria’s fundraising law. 

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Does our organisation have to register as a fundraiser?

To work out whether your organisation is required to ‘register’ as a fundraiser, you will need to work through a two-step process.

Step 1: Is the fundraising activity we are planning covered by Victoria’s fundraising law?

After giving quite a broad definition of fundraising activities (see above) the law provides a list of activities that are not taken to be ‘fundraising’ for the purposes of having to register under Victoria’s fundraising laws.

Activities the law says are not fundraising

• raffles, lotteries and other gaming activities authorised under the Gambling Regulation Act 2003 (Vic) (see Raffles and minor gaming for legal information about these activities);
• raising money for a patriotic fund (as defined in the Veterans Act 2005 (Vic));
• membership or joining fees;
• fundraising that occurs within an organisation that is targeted to past and present members and their friends and relatives, even if the funds will not be used for the organisation;
• seeking bequests (see Gifts, wills, bequests and endowments for more information);
• fundraising within a workplace for a benevolent or philanthropic purpose directly connected with an employee or their immediate family member;
• grants from a government body or corporation, partnership or trust that is permitted to donate for non-profit or non-commercial purposes under its constituent documents (see Grants and Funding for more information); and
• a request to donate funds in lieu of flowers upon a death.

If you are conducting these activities (only) then you will not be required to register under Victorian fundraising law (although you may have other legal obligations).

Examples of fundraising activities that are covered

Apart from the specific activities set out above, if your organisation is asking for or receiving funds to use for ‘not-for-profit’ purposes it will probably be conducting fundraising activities. To give some examples, the following are considered to be ‘fundraising’ and are covered by Victoria's fundraising law:

• holding functions or events or providing services to raise money;
• selling goods where all or part of the price is donated to a community organisation;
• door knocks;
• roadside or pavement collections;
• telemarketing requests;
• seeking donations to clothing bins; and
• selling goods at opportunity shops.

If your organisation is conducting fundraising activities, it will be required to be registered as a ‘fundraiser’ in Victoria, unless it is an exempt organisation (see Step 2 below).  If a business is selling goods or providing services and donating all or part of the sales proceeds to your community organisation, it is conducting fundraising activities and will also be required to register as a fundraiser unless it is an exempt organisation.

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Step 2: Is your organisation an exempt organisation under Victoria’s fundraising law?

Even if your organisation is conducting ‘fundraising activities’ which are covered by Victoria’s fundraising law, such as a door knock or an event, there are some organisations that are exempt from having to register to fundraise.

If your organisation fits into one of the listed exempt categories, you will not have to register as a fundraiser (although you may well have other legal obligations):

• organisations receiving fundraising of less than $10,000 (gross) in a financial year if only unpaid volunteers are used to conduct fundraising;
• State, council and registered schools, some kindergartens;
• tertiary educational institutions, including universities and TAFEs;
• hospitals and certain other health organisations funded by the government;
• religious bodies authorised to marry people;
• registered political parties, trade unions, workplace relations and industrial organisations;
• certain children's services receiving pre-school funding from the Department of Human Services;
• the Anti-Cancer Council (known as the Cancer Council Victoria); or
• any other organisation the Minister specifically declares to be exempt.

If you think your organisation fits into any of these categories, no matter what type of fundraising you are doing, your organisation does not have to register as a fundraiser. If your organisation is exempt because its fundraising does not exceed $10,000 (gross) in a financial year and only uses unpaid volunteers to conduct the fundraising activities, you should continue to assess whether your organisation fits this category throughout the year. Also, if in any year you decide to outsource any of your fundraising to a paid provider then you will fall outside the exemption. 

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What if my organisation undertakes fundraising without registration?

Unless it is exempt, if your organisation is required to be registered but conducts fundraising activities without being registered, under the Act it will be committing an offence. The potential penalties are serious. As at 1 July 2009, the penalty for failing to register is $28,036.80 for an incorporated organisation or up to $14,081.40 for others and/or 12 months imprisonment.

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Our organisation has to register as a fundraiser – how do we do this?

If your organisation has to register as a fundraiser, you need to apply to CAV. CAV's Fundraising Registration Guidelines (see Related Resources at the end of this page) includes details about:

• the information you need to provide to CAV, including the requiement to consent to a police records check;
• the requirement for your organisation to provide further information if less than 35% of the proceeds from the fundraising activities will be used for the stated purposes (that is, explain high administration costs);
• the grounds on which CAV may refuse your registration; and
• the kind of conditions CAV may attach to your registration;

You need to register 28 days before your community organisation proposes to undertake its fundraising activities.  Registration and renewal applications that have been lodged after 11 February 2009 will have a default validity period of 3 years.  Applications made before this date will have a default length of only 12 months.

A register of all fundraisers registered in Victoria is maintained by CAV and is avilable to the public on the CAV website (see Related Resources at the end of this page).  The register provides details including:

• the beneficiaries of the fundraising, which can be your community organisation;
• the estimated proportion of the funds raised to be distributed to the beneficiaries;
• the contact details of the fundraiser; and
• any conditions imposed on the registration.

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Our organisation is registered as a fundraiser - what are our ongoing obligations?

If your organisation is successful in its application to be registered as a fundraiser, some details about your organisation will be put on Consumer Affairs Victoria’s (CAV) website. You will also have ongoing legal obligations under Victoria’s fundraising laws which include obligations:

• to conduct the fundraising in accordance with the application your organisation made to CAV;
• to keep a separate bank account for funds raised by your organisation’s fundraising activities and ensure all money is banked in the bank account;
• to ensure that any money raised is given to or used for the purpose for which it was raised;
• to comply with any legislation or conditions relating to particular types of fundraising activities, such as:
  • wearing identification badges by collectors;
  • securing, numbering, labelling and emptying of collection receptacles;
  • using legible and clear wording on direct debit deduction forms; and
  • disclosing  the exact dollar or percentage amount of funds to be passed on to beneficiaries when obtaining donations as part of the supply of goods or services;
• to inform CAV of changes in circumstances within specified time periods, including:
  • change of name or contact details for contact person, the appeal manager or other key staff, or bank account details;
  • the appointment of a commercial fundraiser;
  • adding new beneficiaries;
  • the fundraiser, an appeal manager or associate becomes insolvent, subject of an administration order or is found guilty of a 'disqualifying offence';
  • if the fundraiser can no longer comply with conditions imposed on its fundraiser registration;
• to keep appropriate accounts and records;
• to comply with directions given by the Director of CAV, for example to have accounts audited; and
• not to make false, misleading or deceptive statements or make false statements about compliance with the Act.

Penalties could apply to your community organisation if it does not comply with its requirements under the Act. There are also penalties for individuals. Breaches of these requirements may also result in CAV refusing any future applications for registration as a fundraiser and may result in your community organisation being de-registered as a fundraiser.

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Our organisation is not required to register as a fundraiser - do we have any ongoing obligations?

Yes.  You will still have ongoing legal obligations under Victoria’s fundraising laws which include obligations:

• to ensure that any money raised is given to or used for the purpose for which it was raised;
• to comply with any legislation or conditions relating to particular types of fundraising activities, such as:
  • wearing identification badges by collectors;
  • securing, numbering, labelling and emptying of collection receptacles;
  • using legible and clear wording on direct debit deduction forms; and
  • disclosing  the exact dollar or percentage amount of funds to be passed on to beneficiaries when obtaining donations as part of the supply of goods or services;
• not to make false, misleading or deceptive statements or make false statements about compliance with the Act.

Are there other authorities we need to tell about our fundraising activities?

Depending on the nature of your community organisation's proposed fundraising activity, it may be necessary to comply with additional rules imposed by other authorities. For example, if it is a large event taking place outdoors, you should consider whether you need to contact other authorities such as the local council or Victoria Police. For more information, see the section on Organising Events > General legal issues to consider.

This is also particularly important if you are planning to conduct public collections such as roadside collections or requests for donations into clothing bins.

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How do we treat fundraising money for tax purposes?

The Australian Taxation Office (ATO) has produced a guide about how the tax laws apply to fundraising (see Related Resources below). A brief summary has been set out below:

GST

If your organisation is registered for GST or is required to be registered for GST, it may be required to pay GST on supplies (sales) made as part of its fundraising events and to remit these amounts to the ATO. A non-profit organisation is required to be registered for GST when its annual turnover is $150,000 or more, or it can voluntarily choose to register even if its turnover is less than this amount.

Once it is registered for GST, an organisation can choose to treat all supplies made in connection with fundraising events as "input taxed", which means that the sales it makes will not be subject to GST but it will also not be able to claim input tax credits for the costs incurred in making the sales. For more information about GST concessions that may be available to your organisation, see the ATO Guide below and information on our Getting Started > Tax issues> GST page.

Income tax

Unless it is exempt from income tax, a community organisation may be required to pay income tax on money received as part of its fundraising activities. For more information about whether your organisation may be eligible for an income tax exemption, see the information and resources on our Getting Started > Tax issues > Income tax page. In some circumstances, member based community organisations may not be liable to pay tax on receipts from members. Specific advice should be obtained if you think your organisation might fall in this category. 

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Can our organisation tell potential donors that “donations over $2 are tax deductible”?

Your organisation can only offer ‘tax deductible donations’ if it has been endorsed by the Australian Tax Office as a deductible gift recipient (DGR). For more information about DGR status and tax deductible donations, see the information and resources on our Getting Started > Tax issues > DGR page.

Unless your organisation has received this endorsement, members of the public who donate to your fundraising activity are not entitled to claim a tax deduction in relation to donations. You can check whether an organisation is endorsed as a DGR on the Australian Business Register (see Related Resources section below).

Even where your organisation is a DGR, if the donor receives a benefit in exchange for their donation, (for example, a dinner or raffle ticket) they may not be entitled to a tax deduction. Further information is available in the ATO's Fundraising and Tax Guide (see Related Resources below).

It is important that your community organisation can identify whether a donor or contributor might be entitled to a tax deduction so that appropriate receipts can be provided.  

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Related Resources

Related legislation

Related links - Consumer Affairs Victoria (CAV) resources

Related links - Australian Tax Office (ATO) resources

Related links - other

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