Take Care This Giving Season
By Yoni Ungar
16 December 2020
After an unprecedented year from which many Australians are just starting to get back to normal life, no doubt many will be looking to give back to their communities and local charities over the holiday period. All donors should seek appropriate caution before deciding on where their funds should be allocated and should learn from the lessons of past mistakes.
In the Supreme Court of NSW, Justice Slattery recently handed down his judgement as to how the $51 million raised by Celeste Barber’s bushfires crowdfunding campaign can be used. The money was raised online for the NSW Rural Fire Service & Brigades Donations Fund, which was constituted by a trust deed. The trustees of the funds had sought clarification from the Court as to how the money raised could be used pursuant to the terms of the deed because it was apparent that many of the donors wished for the funds to be used for purposes that were broader than what was clearly defined in the trust deed.
The fund is an express charitable trust and is a registered charity with the Australian Charities and Not-For-Profits Commission. The principal purpose of the trust is to assist the fire brigade services in NSW and funds may be provided:
“to or for the Brigades in order to enable or assist them to meet the costs of purchasing and maintaining fire-fighting equipment and facilities, providing training and resources and/or to otherwise meet the administrative expenses of the Brigades which are associated with their volunteer-based fire and emergency service activities…”
Accordingly, Slattery J found that the funds could not be sent to other charities, to assist animals who are in need of care, or to provide relief to other individuals who were affected by the bushfires. The funds could also not be sent to other fire services.
What is clear from this judgement is that once the funds were donated to the NSW Rural Fire Service & Brigades Donations Fund, the intention of the donor became irrelevant and the funds could only be used in accordance with the terms of the trust deed. It is important to note that donors who mistakenly believe that the funds would be used for other purposes cannot recall their donations because donations must be made unconditionally.
Prior to making any donation it is imperative that you perform your due diligence to make sure that the organisation to which you are donating is actually undertaking the work that they purport to do. If the organisation is a registered charity, then you are able to review their governing documents online with the Australian Charities and Not-For-Profits Commission register. If you are a foundation, fund or other philanthropic body looking to partner with or sponsor a charity then you should ensure that you have performed adequate due diligence and have made sufficient inquiries that the funds that you will donate will and can be used for their intended purposes.
If you are a charity then you should ensure that your governing documents are up to date and publicly available. You should also ensure that they accurately reflect the goals and purposes of your organisation and they actually enable you to perform the services that you desire.
For any queries about what steps you should be taking and how you can protect yourself before making a donation, please contact a member of our charity law team directly.