On July 1, 2021, the Charitable Fundraising Amendment Act 2018 came into effect, simplifying and modernising charitable fundraising laws in NSW. For charities and not-for-profit organisations, this means reducing red tape and promoting a stronger compliance culture.
The objective of these amendments was to give effect to certain recommendations contained in the Report of the Inquiry under the Charitable Fundraising Act 1991 undertaken by Justice Patricia Bergin and published in January 2018.
Notably, the amendments include the following changes:
However, the amendments also significantly increase the penalties for non-compliance. It is important to remain vigilant of the below:
In addition, the amending Act also addresses other issues, namely:
The reforms concerning aligned reporting and fundraising authority requirements are long overdue and should be welcomed by the NFP sector. The reforms will significantly reduce the duplication of compliance requirements that was formerly demanded.
However, given the significant increased penalties and investigatory powers, charities and persons conducting fundraising appeals should remain vigilant about continuing to comply with NSW fundraising laws while fundraising in NSW, in particular, any issues concerning false representations when conducting fundraising appeals.
We strongly recommend you get in contact with the Dentons NFP team if you require any assistance in mitigating these new risks.
Readers may be aware that following on from an increase in Federal funding in October 2020, the ACNC has instigated a three year field based compliance review program.
The Federal Government announced that the ACNC would receive AU$2.9 million in funding to conduct risk reviews of charities.
The ACNC has stated that the aim of the compliance program is to:
This initiative and the fundraising changes which came into effect on July 1, 2021 in NSW, displays an eagerness by governments to ensure stricter compliance within the sector. This is unsurprising as the ACNC currently regulates nearly 60,000 charities with registrations rising 4% every year.
For charities, this means you will need to be aware of any compliance risks in your organisation. Legal advice sought be promptly sought before responding to any regulator review so that you are well placed to respond in a timely and professional manner, and in a manner that is not prejudicial to your position. For example, it would be prudent to obtain legal advice before making any admissions of regulatory non-compliance.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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