Financial requirements

What banking requirements apply to my appeal?

Money received in the course of a fundraising appeal must be banked immediately, before deduction of expenses, into an account with a bank, building society or credit union. Deposits and withdrawals from the account must be able to be identified and related to each particular fundraising appeal undertaken.

These requirements do not apply to fundraisers exempted from the obligation to hold an authority to fundraise.

What portion of the proceeds can I use to conduct the appeal?

Lawful and proper expenses

Proceeds from an appeal must be spent on the charitable purposes or objects that were the subject of representations made during the appeal. Any expense deducted from the proceeds must be lawful and proper.

If donations are the only form of income, a fundraiser must take all reasonable steps to ensure that expenses do not exceed 50 per cent of gross income raised. If donations are not the only source of income, an authority holder must take all reasonable steps to ensure that expenses do not exceed a fair and reasonable proportion of the gross income. 

The following expenses are not lawful and proper:

• Expenses prohibited under any law,
• Expenses not supported by documentary evidence, or not verifiable as being properly incurred, and
• In the case of an expense paid or incurred by an organisation that is an authorised fundraiser, if it was not properly authorised by or on behalf of the organisation.

Authority holders should be aware that:

• commissions paid or payable to any person as part of a fundraising appeal must not exceed one-third of the gross money obtained by that person during the appeal, and
• if a fundraising appeal is conducted with a trader, expenses must be of a type and amount described in a written agreement between the trader and the authority holder.

Expenditure by an organisation must be authorised

Where an authority holder is an organisation:

• any expenditure for conducting the fundraising appeal, and
• any disposition of funds and profits resulting from a fundraising appeal must be properly authorised by or on behalf of the organisation.

Can I invest money received from an appeal?

Money received in the course of a fundraising appeal should be applied to the charitable purposes intended. However, if the money is not immediately required, the money may be invested, but only in a manner allowed for the investment of trust funds.

This is subject to any Act which confers special powers of investment on the person or organisation concerned.

Authority holders who are considering investment of charitable funds raised and are unsure of their obligations in this regard should seek professional advice.

How do I safeguard assets and stock?

The authority holder must ensure all assets obtained during, or as a result of, a fundraising appeal are safeguarded, recorded and properly accounted for.

These assets would include any stock of goods purchased or manufactured by the authority holder to be sold as part of a fundraising appeal.

Do I need to issue receipts for donations?

When to issue a receipt

A receipt is to be written or issued immediately for all money received, even where not requested by the donor.

Exceptions to this requirement are when the money is:

• received through a collection box or similar device,
• received through the supply of goods and services,
• received through a payroll deduction scheme, or
• deposited directly into an account dedicated to the fundraising appeal or authority holder.

A single receipt may be issued to each donor every 12 months for the aggregate amount received, if donations are by direct debit/deposit into the authorised fundraising account.

Proper control over receipts

An authority holder must ensure proper controls and accountability of receipts. The gross money received by a participant who solicits or receives money in a fundraising appeal must be counted in the presence of the participant. The participant must then be issued with a receipt for that amount. 

The authority holder may also issue a single receipt for the gross money cleared from a collection box or similar device. 

Each receipt must include the following information:

• consecutive numbering of all receipts, as part of an ongoing series, and
• the printed name of the authorised fundraiser.

Other information may be required under specific tax and organisational law, including, but not limited to the Corporations Act, the Australian Charities and Not-for-profit Commission Act 2012 (Cth), and the Income Tax Assessment Act 1997 (Cth).