10 July 2020
Tim McClymont Not so charitable

By Tim McClymont, Partner

Australians are a giving lot. This is especially so when the chips are down, and others are doing it tough.

Aussies will often donate their time and money to assist those less fortunate, especially in the face of adversity. This was evident during the 2011 floods, and more recently during the January bushfires that devastated large parts of Australia, leaving people without homes, their precious belongings, their livelihood, and tragically resulting in the loss of many lives.

Most of us will have seen advertising campaigns where charities call for donations, and you would not be human if, at some point in time, you wondered how your donation would be used. Perhaps, even more importantly for many people is to understand how much (if any) of their donation will actually go the cause they are donating to.

Donating money is about doing good. And the donator usually connects with a cause for a specific reason and generally expects that their money will go where they were promised it would.

When things go wrong

So, what happens when things go ‘pear shaped’?

A good example of how it can go terribly wrong was the recent fallout involving Celeste Barber’s amazing effort in raising $51 million through a Facebook appeal in response to the recent catastrophic bushfires.

Celeste is an incredibly influential comedienne who rallied the troops and got people from all over the world to dig deep and raise funds that would go directly towards victims of the bushfires who had lost everything, to various local charity groups and to animal welfare organisations all supporting the people and animals devastated by the fires.

Regrettably, none of the $51 million raised, ended up going where Celeste had promised it would, leaving millions of people from all over the world wondering how this could have all gone so horribly wrong.

Where did the money go?

The trustee of the NSW Rural Fire Service and Brigades Donation Fund (the RFS) became the recipient of a $51 million windfall as a result of the decision of Justice Slattery in the matter of NSW Rural Fire Service and Brigades Donation Fund: Application of McDonald and Or [2020] NSWSC 604.

The facts

The facts of the matter are quite simple. Celeste Barber had responded to the unfolding crisis and launched a crowd funding appeal in January 2020. Ms Barber put out an appeal for people to help and nominated the RFS fund as the recipient for the appeal donations and engaged PayPal to collect the funds.

After the funds were collected, the Trustee of the RFS applied to the Court for direction as to what was to be done with the funds.

It is here where the ‘black and white of the law’ collided head-on with the morality of the collective intentions of those that donated to the appeal. The Court held that the funds couldn’t be distributed to other charities or welfare organisations, and could only be used by the RFS for its own rather limited purposes.

It cannot be suggested that every person who donated to Ms Barber’s appeal intended the RFS to be the beneficiary of $51 million to use for its own purposes.

And one must wonder whether the decision will have a negative impact on the ability of the RFS to raise funds in the future? Or will lingering resentment, resulting from this decision, make it a bitter pill to swallow for many?

A hard lesson to learn

It is hard to believe that $51 million tied up in the RFS does justice to the intentions of the hundreds of thousands of people who donated, expecting those funds would go towards assisting people who lost absolutely everything in the fires.

The lesson we can all learn from this is to do your research before you donate and do not just buy into the hype, emotion or marketing messaging that is presented to you.

There are two questions you need to satisfy yourself with:

  1. Exactly where the money will go and
  2. How much of every dollar will reach my intended recipient?

Charities should expect these questions and be easily able to provide the answers for you. And the good news is that there are many charities who will allow you to specify exactly where the money will be allocated.

Wishlist

A good example of a charity that is set up to cater for the varying wishes of donors is Wishlist on the Sunshine Coast. They are the local health foundation who take donations from people wishing to donate to the local hospital and health service. Donors can contribute to specific items on their “Wishlist” or can specify the area the funds should be directed to like cancer care, palliative care, children’s ward etc. In addition, they are very clear that 100% of proceeds donated are directed to the area specified and that a portion of your donation is not absorbed in wages and administrative costs.

There are many other good charities out there who are structured the same way – you just need to ask the questions and do your research before handing over your hard-earned and well-intentioned cash.