FAQs: Charities and fundraising

Who is this information for?

These FAQs are for people who want information about how charities can raise and spend funds. The public raises concerns with the ACNC, as the national charities regulator, about charity fundraising, including the tactics used by fundraisers and marketers working for charities, as well as asking questions about how much money charities can spend on fundraising and other activities.

Attention - Important information!The ACNC is not a national fundraising regulator (there are many agencies who regulate fundraising), but the ACNC can take action in certain situations.

What these FAQs cover

What do we know about charities in Australia?

There is a great diversity of charities in Australia, from small religious charities to large international humanitarian agencies, from small community groups to medical research centres, and large numbers of schools and universities. ACNC data collected during 2014, and presented in the Australian Charities Report 2014, shows that charities perform a diverse range of activities across different sectors. Nearly one third (30.0%) of reporting charities listed their main activity as being religious. Most of these charities were small (79.7%). A large number of charities also listed their main activity as being in the education and research sector (18.4%).

The Australian Charities Report 2014 reported that charities had a combined total income for the relevant period of over $103 billion, with the largest 5% of charities receiving 80% of the sector’s income, and 31.5% having less than $50 000 in income annually. Thirty per cent of charities in Australia have an annual income greater than $250 000.

The Charities Report confirmed that most Australian charities operate fairly balanced budgets, and are operating sustainably. Charities were more likely to have a surplus than a deficit, suggesting a generally cautious approach to financial management.

Where do charities get their money from?

Only a small proportion of the $103 billion reported as income by Australian charities comes from donations and bequests. In fact, in 2014 less than 6% of the money charities received came from donations. Charities seek donations via a range of activities such as door-knock or other appeals, holding events or raffles.

The other sources of funding for charities come from:

  • charging membership fees and charging for services ($54.5 billion), and
  • government grants (these may be one-off grants or ongoing funding) ($42 billion).

While for Australian charities generally, donations aren’t a large source of income, for small charities, donations are a significant source of income (32% of total).

There is a great diversity amongst charities when it comes to income sources, as well as the complexity of their financial and other administrative systems.

Many charities are subject to significant regulation, because of the nature of the work they do or their funding providers. For example, charities may work with high-risk clients or in partnership with other agencies to provide aid overseas or they may work in highly regulated sectors such as education and health.

Meeting regulatory requirements often results in costs to a charity. It is important to remember that running professional, sustainable and effective charities costs money.

Attention - Important information!Charities have ongoing costs involved with their charitable work, which they need to finance.

What should I consider when deciding which charity to donate to?

Who to donate to

Focus on the nature of the charity's work, its beneficiaries and the impact the charity is having in the community. Is it clear what the charity is trying to achieve and how its activities work towards its objectives? Would you like your money to support these objectives? Is it being transparent with its activities?

When considering a donation, it is a good idea to do some research. Think about the causes you want to support and find out about the charities working in these areas. Many charities have information on their websites about their objectives and the work that they do. This may include links to evaluations, research papers and annual reports. The ACNC Charity Register also has information about charities’ purposes and activities, which is freely available to the public.

When deciding whether to donate to a charity, it is important to consider the overall impact the charity is having rather than simply looking at its administration costs and expenses. Consider asking ‘what impact is the charity having on the community, and do I want to support it?’ rather than, or as well as, ‘how many cents in every dollar goes to the actual cause?’  

Read more in our factsheets on charities and administration costs and on making sure your donation gets to where it needs to.

How to donate

Often the most direct and effective ways of supporting a charity are to donate directly to the charity and to volunteer with the charity. These ways ensure your money or time is going straight to the charity. Donating via big events, gala dinners or charity telemarketers and street fundraisers is more indirect and can sometimes be less effective because there may be an amount taken from your donation before it gets to the charity. Donating in such a way still contributes to a charity’s objectives, however, and may be the best options for you. Ultimately, how you donate is your decision, but it is a good idea to do some research.

How can charities legitimately raise funds?

As long as a charity complies with any fundraising or other regulatory requirements, it can raise funds in any way it chooses. Often, charities raise funds by:

  • membership fees
  • applying for grants through grant-making bodies and funders (such as government agencies and philanthropic trusts and foundations)
  • having corporate sponsorship or partnerships
  • undertaking fee-for-service work
  • seeking public donations (such as through doorknock appeals, or street collections)
  • holding public events with admission fees
  • running fundraising events (even in partnership with others, such as a fun run or gala dinner) – these can be expensive to run but can generate a large amount of funding and public exposure
  • running raffles (or other games such as bingo), or
  • operating an opportunity shop or selling items (such as merchandise or having a bake sale).

In a changing environment of giving, charities – like all enterprises – may need to look at generating multiple streams of income to ensure their sustainability. Charities are looking at more innovative ways to raise funds, such as through social investment (social or environmental impact) or social impact bonds, community funding (crowd-sourcing) and micro-financing, and social media and digital tools. These are newer approaches, but are all options. However, charities need to ensure they retain their not-for-profit status if they are undertaking such ventures, particularly if there is a commercial element involved. 

Attention - Important information!The key question is always: ‘Is the fundraising conducted with the goal of furthering the charitable purpose of the charity?’

Importantly, charities must comply with any relevant fundraising laws in the state or territory they raise funds in, not just where they operate.

Can charities spend money on fundraising activity?

Yes. It is legitimate for a charity to spend money to raise money (that is, incurring expenses while undertaking fundraising activities), as long as this is in line with its charitable purpose. Decisions about how a charity will raise and use funds are made by the charity’s governing body. See below.

Why do charities use commercial fundraising firms?

Sometimes charities outsource fundraising to external agencies, or they may rely on volunteer fundraisers. Because of the resources involved in large-scale fundraising, it may be appropriate and cost-effective for a charity to outsource this work, especially for larger charities.

However, there have been examples of commercial fundraisers using questionable tactics to get donors to commit to regular ongoing donations, which can seriously affect public goodwill and the charity’s reputation.

Who is responsible for a charity’s fundraising?

Ultimately, a charity’s board, committee of management or trustees (its ‘governing body’) has responsibility for fundraising activity, whether it is outsourced or not. The board has the overall responsibility for the charity’s actions. Board members must have a clear understanding of how money is raised, including any fundraising operations, and they must ensure there are appropriate and lawful processes in place to manage any money raised.

They must ensure that the charity generates funds in a way that is in the charity’s best interests. This includes considering the charity’s charitable purpose, its beneficiaries and the impact on the public and other potential donors. For example, information collected from donors must be appropriately stored and used in ways that comply with relevant privacy laws. Some boards choose to adopt fundraising policies, or codes of conduct, like those developed by the Fundraising Institute of Australia.

Attention - Important information!Outsourcing fundraising does not remove responsibility from the charity’s board members – the ultimate responsibility lies with the charity’s governing body. If board members are not clear about how funds are raised or intended to be used they must be diligent and enquire, and take appropriate action in the interests of the charity.

However charity funds are raised, the board must ensure that the money, less reasonable expenses, is put towards pursuing the charity’s charitable purpose. Read more about the duties of board members.

What action can I take if I am receiving unwanted calls, emails or letters from a charity?

Contact the charity using the details on its website, or details on the ACNC Register, rather than telling the caller or charity collector on the street. This will make sure the charity itself gets the message directly. Ask the charity directly to have your details removed from its mailing and contact lists.

As part of the request to be removed, include:

  • the name of the person who wants to be removed from the charity’s list
  • the phone number being called or location that an approach was made (residential or on the street)
  • the postal or email address if the approach was made by mail or email
  • the number of times contact has been made.

Also, find out if the charity is a member of the Fundraising Institute of Australia (FIA). Members of the FIA must meet fundraising standards and principles, and the Institute can look into complaints about its members.

What should I do if a charity fundraiser approaches me on the street?

The decision to donate is always yours. If you do not wish to donate, you do not have to and you should not be made to feel obligated to donate. You can communicate this to the fundraiser. Fundraisers can use a variety of tactics to appeal to you and encourage you to donate, but it is always your right to politely decline. If you feel uncomfortable saying no on the spot, you can say that you will do your own research and donate another time.

If you feel harassed, consider contacting the charity directly to let them know.

I’m on the Do Not Call Register – why do I keep getting calls from charities?

Charities are exempt under the law from the Do Not Call Register. This exemption means they can call people even if they are listed on the Register. However, reputations are important for charities and if you have concerns about any calls you are receiving, you should raise them directly with the charity. It may be able to remove you from any contact lists that it uses.

What if I don’t like a charity’s fundraising advertising?

If you are offended by a charity’s campaign messaging, or are otherwise concerned about it, it is best to speak to the charity directly about it. You can also contact the Australian Communications and Media Authority at www.acma.gov.au, or the Advertising Standards Bureau (voluntary standards).

What if I am concerned about the privacy of my information?

If a member of the public is worried about how a charity is handling their personal information, we recommend speaking directly to the charity. Charities should have policies in place to ensure personal information is managed in accordance with the applicable privacy law obligations, this includes storing information securely.

If you are not satisfied with the charity’s response to your concern, you may be able to lodge a complaint with the Office of the Australian Information Commissioner (the OAIC).  Please note that a charity may be subject to both state and federal privacy laws, and the OAIC may only investigate complaints about the federal Privacy Act 1988 (Cth). Information about other privacy jurisdictions can also be found on the OAIC website.

What can the ACNC do if I am unhappy with a charity’s fundraising?

The ACNC does not have responsibility for fundraising regulation (this is generally regulated by state and territory agencies). 

Which state or territory agency do I need to contact about a charity’s fundraising?

If your charity undertakes fundraising activities, it needs to comply with the fundraising legislation of the states or territories it raises funds in.

Generally, charities need to register to undertake fundraising activities and may need a permit or licence. They may also need to provide a report on any funds raised to the state or territory government regulator. In some states and territories, special arrangements apply to charities that undertake fundraising through gaming activities such as raffles or bingo.

See our list of regulators that may affect charities at acnc.gov.au/regulatorlist.

When will the ACNC intervene?

The ACNC has investigation powers and will be particularly concerned where it is alleged that a charity has not met its obligations to the ACNC, for example it has failed to keep or provide required information (including financial information), or failed to meet the governance standards.

We require charities to comply with a set of governance standards (which cover things such as working towards charitable purposes, being accountable to members and making sure board members are aware of their financial and other duties to their charity).

If the ACNC detects particular fundraising issues, in particular abnormally high fundraising costs, we may look into the matter. The ACNC will assess the level of risk when deciding what action to take.

Fundraising issues that may trigger ACNC intervention (possibly in collaboration with another Australian regulator) are:

  • failure to protect and account for all funds raised
  • weak governance oversight of the charity’s activities or resources
  • commercial participation/professional fundraising arrangements which do not comply with the law and which cannot be shown to be in the charity’s best interests
  • damage to public trust and confidence caused by:
    • the charity’s fundraising activities
    • high fundraising costs
    • serious risks to a charity’s reputation or assets
    • methods of fundraising which would be a breach of the governance standards
  • where conflicts of interest and private benefit have not been properly controlled
  • serious and/or frequent failures in the conduct of fundraising (for example, persistent unlicensed fundraising or failure to provide required information) which put charity funds at risk, and
  • criminality which exposes related concerns about misconduct and mismanagement in the administration of a charity - for example fraud, theft, false accounting, tax fraud or failing to obtain legal authority to fundraise.

Attention - Important information! For example, a charity that conducts fundraising through related parties (such as through an entity associated with board or committee members) may be at risk of breaching governance standards.

If there are allegations of fraud or other criminal behaviour these should be referred to the relevant police force.  If there are allegations of breach of state or territory fundraising laws, these should be referred to the relevant state or territory regulator – see acnc.gov.au/regulatorlist.

If you are concerned about a charity’s financial management, including how much is spent on fundraising activity you may be able to raise a concern with the ACNC at charityconcern@acnc.gov.au.

Has the charity met Australian Taxation Office (ATO) requirements?

If the charity is endorsed by the ATO as a deductible gift recipient (DGR), then it will also have requirements it must meet for the ATO.  Refer to the ATO's website for more information.

More information

Information on the Register - understanding financial information

Making sure your donation gets to where it needs to

Understanding charity impact

Australian Charities Report

The ACNC acknowledges that this set of FAQs contains information also contained in the factsheet it produced jointly with The Australian Centre for Philanthropy and Nonprofit Studies at the Queensland University of Technology, Charities and administration costs.

FAQ: Charities and administration costs

Charity money myths: the facts about operating as a not-for-profit

Manage my charity

Managing charity money: a guide for board members

Governance standards

External resources

ATO: Guidance for non-profits

Not-for-Profit Law's Information Hub, including information on:

Fundraising Institute of Australia 

Defining and Accounting for Fundraising Income and Expenses: Executive Summary : ACPNS Current issues Information Sheet by McGregor-Lowndes, Poole, Flack and Marsden (2014)

Defining and Accounting for Fundraising Income and Expenses by McGregor-Lowndes, Poole, Flack and Marsden (2014)

Variations in Overhead and Fundraising Efficiency measures: The Influence of size, age and Subsector by Hager, Pollak and Rooney (2001)

Attention - Important information!This page contains links to external websites. Any external links used by the ACNC are inserted for convenience and do not constitute an endorsement or recommendation of any material at those sites. Information and resources provided by the ACNC is for general information only and is not intended to be a substitute for professional advice regarding your charity's particular circumstances.