Consumer Affairs Australia and New Zealand (CAANZ) regulators have released guidance on the application of the Australian Consumer Law (ACL) to the fundraising and other activities of charities, not-for-profits and fundraisers.
CAANZ comprises senior officers of Commonwealth, State and Territory and New Zealand government agencies responsible for consumer affairs or fair trading.
The guidance follows interest from the not-for-profit and charitable fundraising sector during the recent Review of the ACL. During the Review, stakeholders submitted that they wanted more information about how the ACL applies to the activities of charities, not-for-profit entities and fundraisers. Submissions indicated that entities in the sector face difficulties in determining whether their activities are undertaken in trade or commerce and are therefore covered by the ACL.
“We prioritised the development of the guidance to help address the sector’s uncertainty about the application of the ACL to charitable, not-for-profit and fundraising activities” said CAANZ Chair Dale Webster.
The guidance confirms that the ACL applies to a range of activities conducted by a charity, not-for-profit or fundraising entity. The guidance sets out general principles, supported by examples, to assist the sector in understanding its obligations under the ACL.
The guidance clarifies that if fundraising or other activities are carried out in a business-like way, for example, carried out in an organised, continuous and repetitive way with business-like plans or strategies, then the activities are likely to be in ‘trade or commerce’ and therefore subject to the ACL.
Generally, if an entity’s activities are conducted in trade or commerce it must not engage in misleading or deceptive conduct or unconscionable conduct, or, when supplying goods or services, make false or misleading representations.
“Charities, not-for-profits and fundraisers should be open, transparent, truthful and fair in their dealings with the public. If they are, then their activities are unlikely to raise concerns under the ACL,” Mr Webster said.
The guidance has been developed in consultation with stakeholders in the sector, who provided valuable input at several stages in the process. This consultation will continue when CAANZ undertakes its follow-up project – assessing the effectiveness of the guidance and considering whether amendments to the ACL are needed. This work will commence in 2018/19.
For further information on the Review of the ACL, please visit consumerlaw.gov.au