Crowdfunding and charities seem like a match made in heaven. Willing donors give to a charity via a third party website – no fuss, no hassle and a lot of convenience. But despite the increased accessibility, The Australian Charities and Not-for-profits Commission (ACNC) has warned charities to do their research before starting up a crowdfunding campaign.

To assist charities with their homework, the ACNC has released a guide to help nonprofits and donors to navigate the world of crowdfunding.

Why so much concern? Because crowdfunding has grown in such a short period and not all of the websites are created equal. They all have different features and requirements. And as donors are likely to associate a charity with the crowdfunding organisation of their choice, the board needs to be 100% satisfied that the website reflects the values of their nonprofit organisation.

The ACNC says, “While it may be a good option for some campaigns, crowdfunding is unlikely to be a long-term solution to all funding gaps. It may not be appropriate for some projects, and may not even be appropriate for some charities at all.”

Another thing which charities need to take into consideration is the fact that fundraising is actually regulated differently in each state. If a charity is looking at fundraising on a national basis, they may need to be registered in each individual Australian state and territory. A charity may be at risk of breaking local laws if it accepts money from someone living in an alternative state, or even territory.

Susan Pascoe, the ACNC Commissioner, said that crowdfunding brings significant potential benefits for charities. There are definitely certain aspects that charities may need to consider before they jump in head first.

The ACNC Commissioner said, “This new guidance provides simple, practical steps for those charities and individuals considering using crowdfunding to raise funds, as well as for members of the general public thinking of donating to crowdfunding-based appeals.”

Crowdfunding is naturally appealing to charities as it means they can outsource elements of their fundraising tasks. But a board has to ultimately understand that they cannot outsource the responsibility of their charity’s fundraising.

If you are a charity considering a crowdfunding campaign, it is helpful the read the Crowdfunding and Charities Guide put together by the ACNC. It is a positive first step in understanding the rules and regulations which accompany this rather unique fundraising option.