How to avoid getting into trouble when collecting for charity
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Donors and collectors have been warned that they need to know the laws around charitable fundraising after a number of recent cases where things went wrong.
"West Australians are a generous bunch and we don't want to stop that," Lanie Chopping, acting director of retail and services at Consumer Protection WA, told ABC Radio Perth.
"But charity licensing exists for a purpose and that is to protect people who are putting money in."
Out of pocket despite good intentions
Recently, a woman selling t-shirts online to raise money for children in Syria found herself in hot water after PayPal asked for proof of her charity licence.
When she was not able to provide a licence, PayPal reversed the payments already made to her, leaving her out of pocket.
"The law and the licensing system is there to make sure that when a donor gives money there is somebody who has oversight to make sure that the money is spent on what it was collected for," Ms Chopping said.
Tips for collectors
- To run a one-off, short-term fundraiser, approach an existing licensed charity for permission to collect under their licence.
- For crowdfunding campaigns, use a website which will link your campaign to an established charity.
- Charitable organisations and would-be fundraisers should contact their state consumer protection authority for advice before going ahead.
She said there were ways to fundraise without going through the process of getting a charity licence.
"You might be personally touched by a charity or moved to collect money for a charitable cause but you are not necessarily going to have the expertise to do all the book work," she said.
In these circumstances, Ms Chopping said, you should approach an existing charity to ask them if you can use their licence.
"There are organisations out there, like Rotary clubs, that already have a charity licence.
"They are collecting money in the right way, doing the right acquittals of the money and donors can be sure the money is actually going to the right purpose."
The rules around crowdfunding
The rules are the same online, but it easy for donors and collectors to get burnt.
"We see a lot of people crowdfunding and if they are doing that for a charitable purpose, they need to be doing it under the banner of a licensed charity, it is as simple as that," Ms Chopping said.
Some platforms, like Everyday Hero, check that appeals are linked to a licensed charity before the collection goes live, but others do not.
Last year a woman who set up an online fundraising appeal to pay for the funeral of a murdered child was left in debt after some donors queried where the money was going and requested refunds through the crowdfunding site Go Fund Me.
Because the woman had already passed the money on to the family, her credit card was debited for the refunds.
One woman's fundraising story
When Lucy Cleary's 27-year-old stepson Mitch suffered a severe brain injury following an assault in 2013, the family needed help to pay for his care — and quickly.
"We were left in a very humbling position of needing to look for help and to look to a charity to help us out," Ms Cleary said.
"In the very first days, it was very frustrating.
"There's no how-to guide to go about this type of thing; information is hard to find."
Eventually Ms Cleary approached Consumer Protection WA which was able to put her in touch with a licensed charity that would oversee the family's fundraising efforts.
"It took the pressure off my shoulders immediately when they said, 'fill in an application and we will give you the framework'," she said.
"We wanted to protect our donors but also ourselves."
Topics: charities-and-community-organisations, laws, human-interest, perth-6000
