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Investigating charities 

This page explains what you can do if you suspect something is wrong with operation of a charity, what we may do, and what powers we have to investigate. NSW Fair Trading has powers of inquiry where misconduct and wrongful use of funds and assets, or mismanagement is suspected or alleged, or where non-compliance with the law is suspected or alleged. Charities and other persons and organisations conduct community gaming activities (lotteries and games of chance) as a fundraising activity, as a social pastime or entertainment, or as a method of promoting the sale or use of products or services. Charities (organisations authorised to undertake fundraising appeals) are supported by donations and members of the public should have confidence that their donations are applied for the purposes for which they were intended.

What complaints are looked at?  

Generally an inquiry/investigation will be undertaken where there is good reason to do so. For example, we will consider complaints supported by evidence that:

  • there is misconduct or mismanagement
  • the funds and assets are at risk - the funds and assets are being used or applied in breach of the purposes for which they were raised
  • the public is being mislead in a material way
  • unlawful charitable fundraising or community gaming activities are being conducted
  • a prize won is not delivered, or is different in a material way
  • persons are receiving unauthorised benefits
  • proper accounts are not kept
  • fundraising or administrative costs are too high
  • improper activities are being undertaken.

We do not investigate criminal matters, which are the responsibility of the police under the provisions of the Crimes Act. Where an investigation uncovers criminal offences we will refer the matter to the police to consider what action they wish to take.

We cannot assist you in legal proceedings taken against a charity or an organiser of a community gaming activity.

We will not usually use our powers of investigation to resolve internal disputes between members of a charity or its management committee.

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How to alert NSW Fair Trading? 

To alert Fair Trading about any concern you have about a charitable fundraising matter, you can lodge a complaint through the Fair Trading website.

You should include to the following information in your complaint.

  • your full name and address and other contact particulars (email address, telephone number) and details of your connection with the charity or the community gaming activity (if any)
  • the name of the charity and its CFN licence number (if known)
  • the name of the organiser of the community gaming activity and its permit number (if any, if known)
  • a summary of your complaint or concern, and the background to what has occurred
  • relevant dates and times
  • description of incidents
  • details of conversations and meetings
  • copies of relevant letters
  • any explanations you think are important
  • any documentary evidence (or copies) in support of your complaint
  • details of any attempts you have made to have someone in authority in the charity or the organisation of the community gaming activity to put right what you believe to be misconduct or wrong
  • details of any previous correspondence or contact with us about these matters
  • details of any complaints made to the police or other public bodies about these matters.

Confidentiality 

We do not normally take any action on the basis of anonymous information.

It will be difficult for us to act unless we can use the information provided. If you write to us, please state:

  • whether we may put your complaint and any evidence to the charity or the organiser of the community gaming activity, and
  • whether we may reveal your name to the charity or the organiser of the community gaming activity as the complainant.

If you do not wish this to happen, you may nevertheless pass information to us. Also, please mark your complaint with words (eg. confidential or in confidence) that would make your intention clear to us. Nevertheless, we have a policy that prohibits officers divulging information about complainants, etc., to other persons. You may be assured that in the absence of any clear direction from you, your name and particulars will not be divulged.

We will respect confidences so far as we are able, but any person criticised by us as a result of an inquiry has a right to be told the nature of the evidence upon which the complaint has been based, and in some cases this evidence may point towards the complainant.

The results of inquiries may also be used in Court proceedings, and some, of particular public interest, may be published.

Documents and information gathered during the course of an inquiry will be treated in confidence, unless and until we decide to publish the results (if necessary) or they are required under a Court Order during legal proceedings.

As a government agency we are subject to legislation governing public access to information held by government. It is possible that a member of the public may seek access to information held by us, including confidential information supplied by you.

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What happens when we are alerted? 

Compliance Officers in our Investigation Unit will examine your complaint and the information you provide, together with any other information on our files about the charity or the community gaming activity. They may also need to obtain additional information from the charity or the organiser of the community gaming activity.

Each complaint is reviewed and assessed against criteria to determine its priority. The Investigation Unit will evaluate the information to decide whether:

  • it is a matter which we can properly investigate, and
  • the matter is sufficiently serious to justify an investigation.

As we must give priority to the most serious cases of abuse or bad administration, we may not be able to investigate some minor complaints if our investigation staff is engaged on higher priority work, or if the costs of an investigation far outweigh any loss to the charity or the community.

You will be advised as soon as possible, normally within two months, whether we propose to take action.

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Investigations/inquiries 

Compliance officers of the Investigation Unit carry out investigations or inquiries. They have the skills and experience to investigate.

In some rare cases, specialists from outside the NSW Fair Trading may also help carry out this work.

Compliance Officers are under a duty to act fairly. They are concerned solely with the best interests of the charity and its beneficiaries. They do not represent the interests of either the complainant or the management committee of the charity or the organiser of the community gaming activity.

They have power to obtain and copy all relevant information and documents from the charity or the organiser of the community gaming activity, advisers and bankers of the charity or the community gaming activity, which are necessary for their work.

When we investigate, our main concern is to ensure that the charity or the organiser of the community gaming activity suffers no financial loss or damage to its reputation as a result of anyone’s misconduct. We also need to ensure that the charity or a community gaming activity will be managed properly in the future.

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What action can we take to put matters right? 

We can take action in many ways, if an inquiry finds misconduct or mismanagement. For example, we can:

  • prohibit further fundraising or community gaming activities
  • stop further actions by the charity’s management committee in dealing with the charity’s property (which includes land, buildings, investments and cash)
  • appoint an administrator to conduct the affairs and activities of a charity
  • refer the matter to the appropriate authorities for them to consider legal proceedings
  • refer the matter to the police or to other government agencies for appropriate action
  • refer issues concerning trustees to the Department of Justice and Attorney-General for consideration of matters under the Charitable Trusts Act 1993 (suspend or remove trustees and employees, appointment of new trustees, etc.).

In less serious cases, we may simply give a charity or the organiser of a community gaming activity a warning and ensure that faults are put right. If necessary, we will monitor future activities.

We aim to help charities and the organisers of community gaming activities achieve what they want to do, within their charitable purposes (if any) and the requirements of the law.

We will try to let you know the outcome of the investigation, though some are very complex and can take many months, sometimes more than a year, to complete.

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