Setting up fundraising appeals following a tragic accident or disaster are generally rushed. The following guidelines will help you to set up an appeal under those circumstances.
You need an authority to fundraise licence for all charitable purposes. A charitable purpose includes the relief of financial hardship and other purposes that benefit the community. These purposes include disaster relief appeals.
Go to the starting a charity page for more information about licences.
Remember that no two appeals are the same, and you should make sure that your own appeal is appropriate to the particular circumstances. The most important decision to make is whether or not a charitable appeal is called for at all. Next, decide on the terms and status of the appeal. Once the terms are agreed to, you should publish the appeal as soon as possible, and as widely as appropriate in the circumstances.
Sometimes gifts may be sent before publication of the appeal. Either acknowledge them individually or just announce that gifts have already been added to the appeal fund.
The terms of the appeal must make sure:
- that there is no doubt as to who is to benefit
- to identify whether or not the benefit to be given is to be at the discretion of trustees or a management committee or an advisory committee formed for that purpose
- to identify whether or not the entire benefit is to go to the beneficiaries, and if not what is to happen to any surplus. Examples of where the entire benefit is not to go to the beneficiaries: specific purposes are laid down and the funds may be more than is required for those purposes
- the beneficiaries are only to take as much as the trustees or management committee think appropriate.
If the specific charitable purposes have been fulfilled and a surplus remains, you should get legal advice before distributing the funds. Charitable trust law may apply to the surplus.
Purpose and terms of appeal
The terms of appeal suggested below are only examples of forms that can be used. Before making an appeal it’s always wise to get legal advice on what form to use.
We emphasise that if your organising an appeal you should do all you can to make sure that the purpose of the appeal is clear and that donors know how their gifts will be used. This will reduce the risk of confusion and distress.
The appeal could take the following form:
"This appeal is to set up a charitable fund to relieve distress caused by the accident/disaster at ...................................... on ............................................ The purpose is to use the funds to relieve those who may be in need of help (whether now or in the future) as a result of this tragedy. Any surplus after their needs have been met will be used for charitable purposes in one or more of the following ways:
1. To help those who suffer in similar tragedies.
2. To benefit charities with related purposes.
3. To help the locality affected by the accident/disaster."
If the persons benefiting take the entirety of the fund, you can use this form:
"This appeal is to set up a fund, the entire benefit of which will be used for those injured or bereaved in the accident/disaster at ................................................ on ......................................................... and their families and dependants as the trustees think fit."
If the trustees have the discretion to give as much as they think to those who have suffered from any surplus going to charity, you can use this form:
"This appeal is to set up a fund for those injured or bereaved in the accident/disaster at.................................................... on ................................................ and their families and dependants. The trustees will have a discretion how and to what extent to benefit individual claimants: any surplus will be applied for such charitable purposes as the trustees think most appropriate to commemorate those who died."
Other funds already operating
Many people assume that they must set up a new charity if they want to carry out specific or particular charitable purposes, but this is not always correct. You should consider the following points before setting up a new charity:
- It’s likely that a charity already exists which is doing the kind of work which you would like to do. We suggest that you think about whether it would be better to offer your services to, or combine with, an existing charity. It’s usually less effective to have several organisations trying to do the same work in the same place, and it duplicates running costs.
- If you wish to raise funds for specific or particular purposes or for someone close to you, it may be possible to create a separate named fund within an existing charity — this may be just as effective as creating a new charity. For example, most service organisations (Apex, Lions, Rotary, Quota, Soroptimists, Zonta etc.) have an authority to fundraise and their objectives are wide enough to cover community-based projects. One of these organisations might adopt your appeal, which means you don’t need an authority to fundraise.
- A new organisation might find it more difficult to get funds because the public, other organisations and corporations, and government agencies who give or provide money for charitable purposes may prefer to continue to give to organisations with a proven track record, rather than a new organisation.
- The duties and responsibilities of charities are wide-ranging and need to be taken seriously. Anyone who wants to be on the management of a charity needs to be prepared to give the necessary time and effort to understanding and carrying out those responsibilities. This is a lot of work.
Collection of funds
Disaster appeals can involve certain banks as collection agents. This is an efficient and effective way of collecting funds. Proper receipts for any donations should be given, and the funds would need to be paid into a special account established for the appeal.
Taxation and other exemptions
The appeal fund may be eligible to receive exemptions and assistance from federal, state and local government. For example, the appeal fund:
- may not have to pay income tax
- may be eligible to receive exemptions, concessions or special treatment in some circumstances under the tax regime (Goods and Services Tax, Fringe Benefits Tax)
- may be entitled to exemptions, concessions or special treatment in some circumstances in respect of taxes or duties imposed by the New South Wales government
- may be entitled to deductible gift recipient status in respect of donations (income tax deductibility)
- may be eligible for exemptions, concessions or special treatment in respect of taxes or duties imposed by the local government
- may be able to obtain grants or subsidies from government agencies
- may be able to obtain concessions on utilities (water, electricity).