During the devastating bush fire crisis which occurred over the summer of 2019-2020, the famed comedian Celeste Barber posted a desperate plea on Facebook for donations to assist with the bush fires.  Her post included a photo showing flames approaching her in-law’s property and named the public appeal “Please help anyway you can. This is terrifying.”

The post was widely shared on social media and picked up by the mainstream media. This resulted in her appeal raising over $51M.

Whilst the success of the fundraiser cannot be doubted, after the smoke cleared, it became apparent that the way the fundraiser had been established (and the implications that flowed) was perhaps not entirely as Ms Barber, and the vast number of donors, had understood or appreciated.

This mammoth outpouring of community generosity came to a head in an application to the New South Wales Supreme Court[1] regarding how the raised funds could be applied.

The fundraiser

In setting up the Facebook fundraiser, Ms Barber nominated the NSW Rural Fire Service & Brigades Donations Fund (RFS Fund) as the recipient of the appeal donations.

The descriptive title for the fundraiser was “Fundraiser for the Trustee for the NSW Rural Fire Service & Brigades Donation Fund”.  Under the heading “About”, it read:

Want to Join (sic) me in supporting a good cause? I’m raising money for The Trustee for NSW Rural Fire Service & Brigades Fund and your contribution will make an impact, whether you donate a lot or a little.  Anything helps. Thank you for your support.”

The PayPal Giving Fund Australia

Utilising Facebook to conduct her appeal, Ms Barber employed an electronic payment system controlled by PayPal, the PayPal Giving Fund Australia, as the mechanism to receive the donations.  The PayPal Giving Fund is a public ancillary fund and essentially operates as a facility by which charitable donations can be made to other charities.  When it receives donations, the PayPal Giving Fund redirects the donations to the charity nominated by the donor according to the terms of its trust deed and the PayPal Giving Fund’s Donor Terms of Service (Terms of Service).  When a donor makes a payment to the PayPal Giving Fund, they must agree to be bound by the Terms of Service by checking a box before they may proceed.

The Terms of Service:

  1. require donors to recommend a charity to which their donation is redirected – this is achieved through the fundraiser’s Facebook page displaying the name of the RFS Fund as the nominated charity; but also
  2. provide that the PayPal Giving Fund is not bound by the donor’s recommendation and it retains exclusive legal control over the donations, subject to the law of charity – although it would be unusual for the PayPal Giving Fund to not follow a donor’s recommendation where properly made. (This is consistent with the terms of PayPal’s trust deed (which reflects the model trust deed for public ancillary funds) which gives the trustee an absolute discretion over the exercise of its power, including the distribution of donations received.)

Therefore, when making a payment to the PayPal Giving Fund, all donors to Ms Barber’s appeal agreed to be bound by PayPal’s Terms of Service and recommended the RFS Fund as the nominated charity as the recipient of their donations.

In accordance with the recommendations made by the donors, the trustee of the PayPal Giving Fund paid the $51M raised to the RFS Fund.

The RFS Fund

The RFS Fund is a charitable trust and registered charity with the ACNC.  The Trust Deed for the trust provides that the RFS Fund “will be established and operated solely for the purpose of supporting the volunteer-based fire and emergency services activities of the Brigades”. (our emphasis)

According to the Trust Deed, the primary purpose of the trust is to pay or apply the Trust Fund “to or for the Brigades in order to enable or assist them to meet the costs of purchasing and maintaining fire-fighting equipment and facilities, providing training and resources and/or to otherwise met the administrative expenses of the Brigades which are associated with their volunteer-based fire and emergency service activities.”

Donor sentiments

Donations made from around the world were accompanied with messages of support and empathy.  Some messages indicated that a donor “directed, expected, hoped or was concerned”[2] that a donation to the fundraiser would be applied to another charity or recipient that was outside the objects of the RFS Fund.  Other posts plainly demonstrate the sentiments and range of expectations and hopes of the donors.  For example:

Will any of the funds raised go towards supporting people who have lost their homes or to rescue centres for animals Celeste Barber?

I hope, the money raised can get more firefighters to those regions that have none or it goes to help those who are in evacuation centres rebuild their lives after the flames have gone.”

Is all this money going to the fire services or is it actually going to the victims who need this money???? Want to make another donation but I want my money to go to those who Iost everything

The issue

It is a fundamental duty of a trustee to adhere to and comply with the terms of the trust instrument in administering the trust.

Here, there appeared to be a conflict between the expressed intentions of the donors regarding how the funds should be applied, and the terms of the Trust Deed which limit the application of the trust funds to the above purpose.

The issue brought to the Court by the trustees of the RFS Fund was how they may apply the raised funds in accordance with the RFS Trust Deed, particularly in light of the various statements made by donors to the appeal at the time of making their donations, and statements made by Ms Barber herself, which are incompatible with the purpose and activities of the RFS Fund as they refer to other charitable activities, such as providing relief to those who has suffered loss as a consequence of the bush fires and animals who have been affected by the bush fires.

Directions sought by the trustees

The trustees sought a direction from the Court of whether, in the circumstances, they are justified in the proper performance of the trust in applying the funds raised to any of the following four possible objects:

  1. Paying money to other charities or rural fire services, whether in New South Wales or other Australian states or territories, to assist in providing relief to persons and animals affected by bushfires;
  2. Setting up or contributing to a fund to support rural firefighters injured while firefighting, or the families or rural firefighters killed while firefighting;
  3. Providing:
    • Physical health training and resources;
    • Mental health training and resources; or
    • Trauma counselling services;

to volunteer firefighters who require them in connection with performing the statutory functions of the New South Wales Rural Fire Service; or

  1. Setting up or contributing to a fund to meet the costs for volunteer rural firefighters to attend and complete courses that improve skills related to the volunteer-based fire and emergency service activities of the brigades, established under the Rural Fires Act.

The decision

The Court noted that the case was an appropriate case for the Court to give judicial advice given the large sum of money involved and the public controversy and interest in how the funds would be applied.

A key issue identified by the Court was whether or not the donations were made absolutely to the charity that received them or, rather, were impressed with a trust for a particular charitable purpose.[3]

The Court relied on the fact that in this case each donor made a payment to the PayPal Giving Fund by way of an online facility with published terms (being the Terms of Service) that clearly expressed the effect of the donation; namely that donor was recommending that the funds go to the RFS Fund.  This was the case irrespective of what the donors may have otherwise hoped the funds would be used for.

In addressing the various sentiments and wishes expressed by the donors online, the Court noted that these statements do not bind the trustees’ application of the funds that they received from the PayPal Giving Fund and that it is rather the terms of the RFS Fund that bind the trustees.  If the trustees of the RFS Fund applied the funds other than in accordance with the trust deed, they would commit a breach of trust.

The Court answered the four questions put by the trustees regarding the application of the funds as follows:

  1. Paying money to other charities or rural fire services, whether in New South Wales or other Australian states or territories, to assist in providing relief to persons and animals affected by bushfires – no, this is not permitted under the Trust Deed;
  2. Setting up or contributing to a fund to support rural firefighters injured while firefighting, or the families or rural firefighters killed while firefighting– yes, this is within the scope of the Trust Deed;
  3. Providing:
    • Physical health training and resources;
    • Mental health training and resources; or
    • Trauma counselling services;

to volunteer firefighters who require them in connection with performing the statutory functions of the New South Wales Rural Fire Service – yes, this is within the meaning of the words “training and resources”; or

  1. Setting up or contributing to a fund to meet the costs for volunteer rural firefighters to attend and complete courses that improve skills related to the volunteer-based fire and emergency service activities of the brigades, established under the Rural Fires Act – yes, this is within the meaning of the word “training“. .

The implications

The case demonstrates that the law of charity is complex and often misunderstood in the broader community.  Whilst undoubtedly the funds will be applied for the public good and in a desirable way, the purpose of the application of the funds may leave some donors disappointed.

The only real answer to how disappointment can be avoided in the future is to encourage those establishing fundraisers to make sure they are aware of the purposes and activities of those charities that they wish to donate money to in order to ensure that they are compatible with the intended activities and class/es of beneficiaries.  The search function on the ACNC’s website allows the public to familiarise themselves with a charity’s purpose and its activities.

One hopes that the legalistic end to this heart-warming community endeavour does not dissuade the public from commencing or donating to online appeals in the future.

[1] New South Wales Rural Fire Service & Brigades Donations Fund; Application of Macdonald [2020] NSWSC 604.

[2] At [18].

[3] An interesting side point is that it was noted by the Court that there was no possibility of the RFS Fund being in surplus with respect to its purposes and accordingly, none of the conditions necessary for a cy-pres scheme were met.