What Should Businesses and Charities Include in an Authority to Fundraise?

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Table of Contents

• 1. Clearly Identify the Parties
• 2. Purpose and Cause 
• 3. Scope of Fundraising Activities
• 4. Reporting and Accountability
• 5. Compliance with Laws and Regulations
• 6. Financial Compensation
• Key Takeaways

Fundraising allows charitable and not-for-profit organisations to engage a business to raise funds. In order to legally raise funds on behalf of a charity, some Australian states and territories require that businesses possess an authority to fundraise. An authority to fundraise is a formal document that outlines the terms and conditions under which a business or charity can seek funds from external sources. This article explains the key elements that should be included in an authority to fundraise. 

1. Clearly Identify the Parties

The first element in an authority to fundraise document is the identification of all parties involved. This section should clearly specify the following:

• name and contact information of the business and charity; and
• licensing information under which the charity can grant the authority to fundraise. 

This section ensures that there is clarity regarding who is authorised to fundraise and who is providing this authorisation.

2. Purpose and Cause 

You likely know that the law requires charities to have a clear purpose and cause. When undertaking charitable fundraising activities in the form of a partnership, both parties must strive towards a unified purpose that matches the charitable purpose for which the charity is established. 

Identifying your purpose and cause also facilitates the:

• appropriate allocation of resources; and 
• design of any programs necessary for the fundraising. 

Your authority to fundraise is the best place to set out the purpose and cause the parties are working towards. 

3. Scope of Fundraising Activities

The authority to fundraise must also detail the scope of the fundraising activities that the authorised party can undertake. This section should detail the following:

• types of fundraising activities the authorities permit, such as the solicitation of donations, grant applications, crowdfunding campaigns, or specific marketing activities; 
• duration of the authorisation, including if the fundraising is related to a specific campaign or creating an ongoing partnership; and
• authorised geographical areas, as the charity itself may limit this.

4. Reporting and Accountability

It is essential to establish a framework for reporting and accountability. This framework ensures the charity granting authorisation can:

• monitor the progress and impact of the fundraising efforts; and 
• comply with their reporting requirements.

The authority will need to identify the obligations of the authorised party to:

• provide regular reports on fundraising activities, including financial statements and donor information; 
• maintain transparency in all financial transactions related to fundraising; and
• comply with all relevant legal or regulatory requirements, including obtaining the necessary state-based permits or licenses.

5. Compliance with Laws and Regulations

The law subjects charitable fundraising to ongoing reporting requirements. In order to ensure compliance, your authority to fundraise must include a section that ensures the parties comply with all state-based laws and regulations. 

Legal compliance is critical to avoid attracting penalties for both parties involved. You will also want to include a right to terminate if a party does not comply with the relevant laws and regulations. 

6. Financial Compensation

The parties also need to define:

• how funds are collected and disbursed; and 
• what percentage or fee (if any) the authorised party will retain for fundraising services.

Within this arrangement, you should consider how you will cover expenses related to marketing activities and engaging contractors. It will also be essential to specify whether compensation depends on meeting fundraising goals or achieving specific outcomes.

Key Takeaways

An authority to fundraise is a vital document for businesses and charities seeking external financial support, not only to clarify expectations but also to ensure compliance. Crafting a comprehensive document ensures that you conduct fundraising legally and build productive relationships that align with the charity’s purpose and social responsibility. 

If you have any questions about conducting charitable fundraising, our experienced charity lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.