Proposal to extend Australian Consumer Law to the activities of charities, not-for-profit entities and fundraisers

Following a meeting of Ministers for Consumer Affairs held on 31 August 2017, the State Consumer Affairs Ministers have released a Statement committing their respective State regulators to:

“issue guidance clarifying the current application of the Australian Consumer Law (ACL) to the activities of charities, not-for-profit entities and fundraisers.”

In particular, the Statement also indicated that the Ministers would:

 “assess the effectiveness of the proposed guidance on not-for-profit fundraising, further regulatory actions, and whether any amendment to the ACL is necessary during 2018–19”.

The current State regulatory regimes are outdated and do not effectively support fundraising across state and territory borders, or through digital platforms.

Major industry bodies participating in the not-for-profit sector have also released a joint statement concerning potential fundraising reform[1] in which they identify that “fragmented fundraising laws that differ considerably across Australia” and “up to seven permissions may be needed to collect funds throughout Australia, including online.”

It is apparent that the current State based regulatory framework is complicated and can result in advertent non-compliance with the not-for-profit fundraising regime. In addition, a lack of resources directed to supervision and enforcement of the regime creates substantive risks for donors and barriers to innovation.

The Statement by the Ministers and the Industry Joint Statement on fundraising reform represent a move to promote the use of the Australian Consumer Law to provide a nationally-consistent set of laws that can be used to support and uniformly regulate fundraising within the not-for-profit sector. The Consumer Affairs Ministers have thus agreed to review the fundraising regulations.

In line with the proposed reforms recommended in the Industry Joint Statement, Meridian Lawyers anticipate that the following steps are likely to take place in the foreseeable future:

  • Clarification and minor amendments to the Australian Consumer Law (ACL) to ensure its application to fundraising activities of not-for-profit entities
  • Repeal of state and territory fundraising laws, and
  • Increased regulatory supervision and enforcement regarding fundraising and fundraiser conduct.

For further corporate and commercial advice on the not-for-profit sector and guidance on fundraising please contact Meridian Principal Michael Bracken.

[1] Statement on Fundraising Reform issued by AICD, Justice Connect, Governance Institute, Australian Council of Social Service, Chartered Accountants in Australia and New Zealand, Community Council for Australia, CPA Australia and Philanthropy Australia

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