Legal experts have warned donors to check how charities spend donations, and urged those celebrities who promote fundraisers to know exactly what they are endorsing to avoid blowback about where money will be spent.
The experts say there is no easy solution to resolving concerns over how Australia’s NSW Rural Fire Service can spend more than A$50 million in donations raised in the wake of the summer’s deadly fires.
Comedian Celeste Barber, who fronted a GoFundMe online fundraising effort at the height of the disaster, has reportedly taken legal advice after learning money donated to the RFS has not gone to victims on the ground.
While social media has been flooded with donors complaining the A$52 million raised was not being spent how they wanted, legal experts said donors needed to be aware of laws governing charities.
Australian National University Associate Professor Michael Eburn said donors need to “make sure you know what charity you’re donating to”, stressing the RFS has done nothing wrong.
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“This money is going exactly where they said it would go – there’s no question of misappropriation. If donors wanted to donate money to someone who has lost their home, then the RFS was never that charity,” he said.
Trust deeds governing the charitable status of the RFS only allow for money to be spent on items such as trucks, equipment and administration. The trust provisions are designed to protect donors from giving money that is then spent elsewhere or misappropriated.
Given the legal status of the RFS trust deed and the amount of money involved, it could take an act of Parliament, special dispensation from the Supreme Court, or in an extreme case, the winding up of the RFS to disperse the money in any way other than how the trust deed dictates, Eburn said.
The RFS can’t donate the money to other charities outside its scope, he said, as Barber had hoped.
Eburn warned donors to be careful of celebrity fronted fundraising campaigns, noting Barber promoted an existing charity with an existing trust deed. She has no legal standing in the raising or spending of money and the RFS as the recipient of the money can only spend the money as its trust deed allows.
“She was essentially the spokesperson at the front of a telethon,” Eburn said. “If the telethon suddenly raises a lot of money it can’t just say I’m going to give the money to someone else.”
Seak-King Huang, a partner at specialist charity and not for profit legal firm Prolegis, acknowledged Barber’s good intentions, but said: “The awkwardness has arisen because her intention was to try and benefit the firefighters themselves and communities on the ground but she hasn’t gone to look what the NSW fire services purposes is and of course the trustees of that fund must be legally compliant with those funds as set out in their trust deed.
“There’s nothing in their trust deed that says funds can go toward another charity, another fire service or hand outs to families who might have lost a volunteer in the course of their duties.
“I think it’s really unfortunate that she [Barber] didn’t do the homework but at the same time I would quickly add that it’s not uncommon for people not to stop and think to do homework because during the fires it was all just reactionary.
“People need to be careful about who to give to that’s true but people and celebrities who are able to create momentum and what they’re known for need to be very careful about what they’re calling people to do – I would say a big lesson out of this is celebrities don’t go and urge people to support things when you haven’t looked at parameters of an organisation and what they do.
“And then for the donating public to be very careful responding to those sorts of calls to arms.”
Inspector Ben Shepherd from the RFS said: “Both parties are working well to try and come to an outcome. Those talks are continuing and have been under way for a couple of weeks but we’re having to work within the confines of the law of the trust – we are working well together – hopefully able to achieve an outcome not just for Celeste but those who have given to that fund.”
A representative for Barber did not respond to a request for comment.