Not-for-profit Law
Legal help for community organisations

Former Supreme Court judge in RSL (NSW Branch) investigation calls for uniform fundraising laws

Please change your location to view this page.

This page contains content that does not match your current location

The inquiry

An independent inquiry into the fundraising activities and governance of the Returned Services League, has recommended the ‘introduction of a single unified Australian statutory regime for the regulation of charitable fundraising’.

Former Supreme Court judge, the Honourable P A Bergin SC was appointed by the NSW Government to inquire into The Returned Services League of Australia (NSW Branch) (NSW RSL), RSL Welfare and Benevolent Institution and RSL LifeCare Limited. The Report of the Inquiry under the Charitable Fundraising Act 1991, released on 12 February 2018, uncovered widespread ignorance in each of the RSL entities of the Charitable Fundraising Act 1991 (NSW), the Charitable Fundraising Regulation 2015 (NSW) and the terms of the fundraising authorities.

The year-long investigation into the three RSL entities was largely triggered by reports that former NSW RSL president Don Rowe misused hundreds of thousands of dollars on his corporate credit card, including the use of NSW RSL funds to pay for the telephone bills of his family, make cash withdrawals for daily living, and to pay for one of his daughters to stay at Sydney’s Hyde Park Inn.

The inquiry was critical of serious governance failures of the former directors of the RSL entities. In one example, the directors of RSL LifeCare approved their own consultancy contracts and approved increases in their consulting fees. Bergin SC found ample evidence of cronyism, ineptitude and a lack of understanding or appreciation of directors’ obligations in dealing with conflicts of interest to ensure the transparency and accountability in respect of funds raised from the public.

Recommendations

Bergin SC made 26 recommendations calling for sweeping reform of fundraising regulations, the need for executive members and the management team (particularly the Fundraising Manager) to complete further education in fundraising through the Fundraising Institute of Australia, and the referral of Mr Rowe and state councillors to the relevant authorities (NSW Police, ASIC and the Australian Charities and Not-for-profits Commission (ACNC)) for further investigation. These referrals highlight that there are already considerable protections in the general law (eg, Crimes Act, corporations law) to deal with serious misconduct, such as fraud. Not-for-profit Law is not persuaded that more prescriptive NSW-based fundraising laws (with increased offence provisions) would have prevented what occurred, or overcome any gap in the actions that can now be taken by these authorities.

Many of the recommendations centred on fundraising regulation, including simplifying the fundraising regime established in the Charitable Fundraising Act 1991 (NSW) to remove duplication while other recommendations were more prescriptive (e.g. establishing separate bank accounts for each fundraising activity). It was also recommended that consideration be given to the introduction of a single unified Australian statutory regime for the regulation of charitable fundraising. This recommendation is consistent with our  #fixfundraising campaign (referred to by Bergin SC at paragraph 13.2.12), which advocates for the repeal of fragmented state and territory fundraising laws, the clarification and minor amendments to the Australian Consumer Law (ACL) to ensure application to fundraising activities is clear, and working with regulators and self-regulatory bodies to provide guidance to fundraisers to continue to improve fundraiser conduct. 

Not-for-profit Law believes some of the more prescriptive recommendations concerning fundraising (e.g. reporting and record keeping obligations) are more appropriately dealt with in a code of conduct within the ACL framework, that is applicable to all fundraisers (not just limited to charities) and all types of fundraising activities.

Not-for-profit Law maintains the view that the ACL is better regulation, not just more regulation. It offers a practical solution that doesn’t require a referral of powers and, under its existing multi-regulator framework, retains the existing State fundraising regulators working with the ACCC to deliver a nationally-consistent approach. The ACL balances risk with the need for a regulatory framework that supports ethical behaviour and donor protection, while providing the NFP sector a means to efficiently and effectively fundraise in efforts to achieve their mission – for the benefit of all Australians.

The ACNC has confirmed it is working with RSL charities to rectify serious governance failures and to restore confidence. RSL National has agreed to provide the ACNC with interim report findings from the forensic investigation being undertaken by KordaMentha, and any additional supporting documentation to assist the ACNC with its inquiry. Pro Bono News has further detail on RSL National's next steps in delivering a "comprehensive action plan".

Subscribe to the Update

Subscribe to the Update

Subscribe to the monthly Not-for-profit Law Update for information on changes to the law, new resources, events and other sector news.

Subscribe