An article in The Australian (Deborah Cornwall, ‘Celeste Barber $50m donations in limbo as legal solution sought’ The Australian (Online) 11 January 2020) reports that:
Lawyers for Barber and the RFS have spent the past few days trying to find a way around the limitations of the trust so the money could be spent as donors intended.
The dilemma for the RFS was that Barber had made it clear to her 6.5 million Instagram followers that the money was intended to go to the country’s hero volunteer firefighters and the families of volunteers who had been killed as well as bushfire victims and injured animals…
A spokesman for PayPal told The Weekend Australian on Friday night that the company was holding on to the money at this stage only to allow the RFS to resolve the “challenges they are encountering”…
He said the near $50m donation posed a “unique” challenge for the RFS, and PayPal had agreed to wait until it had resolved the issue…
“They (the RFS) are working through the challenges they are encountering, and the moment they have a solution we are ready.
“We are very mindful they have a day job, a massive day job.
“We just don’t want to make things any harder for them.”
There must indeed be massive challenges. The trustees that are responsible for the RFS Brigades and Donations Fund are used to having a budget of around $1m. Where a charity grows from $1m to in excess of $50m, the processes and procedures would grow with it. To manage this sum of money would necessarily require investment in systems to ensure the money can be received and accounted for. To grow from $1m to $50m overnight does not allow that sort of growth. According to Commissioner Fitzsimmons (quoted in Ben Doherty, ‘Bushfire donations: where will the millions that have been given be spent?’ The Guardian (Online) (7 January 2020)
… allocating the “extraordinary” influx of donations from the public, now into the tens of millions of dollars, would be a challenge for the organisation, but that it was a “nice challenge to have”.
It is no surprise that the RFS trust has asked PayPal to hold the money until they can get in place the systems they need to manage the money.
Added to that is the complexity that the trust can only use the money for the purpose of the Trust (The Trustee for NSW Rural Fire Service & Brigades Donations Fund, Trust Deed, 6 March 2014 [2.3]), that is to give, or spend the money:
… to or for the brigades in order to enable them or assist them to meet the costs of purchasing and maintaining firefighting equipment and facilities, providing training and resources and/ or to otherwise meet the administrative expenses of the brigades which are associated with their volunteer-based fire and emergency service activities…
Many donors appear to have believed that the money would be available for other purposes, even though the call for donations specifically said (emphasis added):
Want to join me in supporting a good cause? I’m raising money for The Trustee for NSW Rural Fire Service & Brigades Donations Fund and your contribution will make an impact, whether you donate a lot or a little. Anything helps. Thank you for your support.
Nothing there said the money was going anywhere else or for any other cause. Details of the beneficiary were given as shown below:
The link from her page (not active in the screen shot, above) takes readers to the relevant record held by the Australian Charities and Not-for-Profits Commission. It lists ‘Who the charity helps’ as ‘People in rural/regional/remote communities; Victims of disaster; General community in Australia’. That may be ambiguous, but it is open to interpretation to say it does those things by helping to ensure those communities have a funded rural firefighting service. That list is followed by a more detailed statement that says ‘Funds are utilised to purchase equipment for use by NSW Rural Fire Brigades across the State.’
It’s hard to know how people did not understand where the money was going and what it was for. Even so, one has to conclude that it is indeed the case that many people did donate and they did not understand that they were donating to a single beneficiary, a trust fund established to support the NSW Rural Fire Service (a government operated fire service). They did not understand that they were not giving money to Ms Barber to distribute.
Save for that list of ‘Who the charity helps’ it could not be said that the RFS trust contributed to anyone’s erroneous beliefs in what a donation to the fund was for. On that view the RFS and the Trustees could say that if people’s expectations were unrealistic, it is not up to them to meet those expectations. But the size of the donation, the number of donors and the political harm both to the RFS and to government means that ignoring those expectations is not really an option.
Doherty (in the article cited above), says Commissioner Fitzsimmons ‘… pledged to spend the donations [then standing at $33m] “where it was intended”, directing the money towards fire victims as well as the fire service itself.’ The reference to ‘directing the money towards fire victims’ is not identified as a quote so it’s not clear if that’s Doherty’s interpretation of ‘where it was intended’ or what the Commissioner said, but we can assume, for the sake of the argument that this is the Commissioner’s intention. That does not however address how that might be achieved.
Justin Choveaux, general manager of the Rural Fire Brigades Association of Queensland, is reported to have said, when told of a $200 000 donation (Kym Agius, ‘Kylie Jenner donates $200,000 to Queensland’s firefighters’ ABC News (Online) (9 January 2020)):
‘are you sure it’s us?’…
‘we are the Rural Fire Brigades Association, we support brigades and volunteers in Queensland, if you want your money to help people who have lost everything that’s not us, we don’t do that’.
Equally the RFS Brigades Donations fund does not (or at least did not) do ‘that’ (ie help people who have lost everything or wildlife) but the donations have already been made and were made explicitly to the Trust so they cannot ask the question ‘are you sure it’s [for] us?’ They certainly cannot ask Ms Barber because, to make the point I have made in earlier posts, she is not ‘the’ donor. She set up the page and asked people to donate, but it is the individuals who are the donors and they all pressed a button to donate to the charity she had nominated. They did not give money to her to distribute.
In another interview quoted on the Facebook page of the Public Service Association of NSW, Commissioner Shane Fitzsimmons is quoted as saying:
“What we’d really like is things like modern electronic resource tracking systems… There’s technologies into vehicles, there’s technologies in the air, there’s satellite programs that would assist us with live intelligence. Goodness knows where this will go, and we’ll work very closely with our Rural Fire Service Association and the volunteers and the members and get as much feedback as we can. What are their priorities? What are their thoughts? There might be multiple different things we can do to help them.”
Sarah Macdonald – “I hope this doesn’t mean the Government thinks it can cut some money though because it’s getting so much money from elsewhere.”
Shane Fitzsimmons – “You can be assured Sarah that I’ve had the conversation with the Minister and the Premier and there won’t be any cuts to money for this. As a matter of fact I’m very conscious that whatever we spend here is not to be what Government would normally provide for.”
The RFS is an excellent organisation, run by an inspiring commissioner and dependent on extraordinary volunteers. No one should begrudge them the donations nor doubt for a minute that they money won’t be well spent. But reading the social media comments of donors one cannot help but think this is not where they thought the money would be going. If it’s not to be used to provide ‘…what Government would normally provide for’ it won’t be buying new tankers or water bombing aircraft.
As one correspondent to this blog says:
… the RFS cannot use the money to purchase trucks or stations as they provide these under capital expenditure- the fund acts as a conduit for brigades to access funding to pay for everyday items such as paying phone bills, buying items such as TVs etc for training and other run of the mill operational expenses ie P.O. Box fees etc
No one could reasonably expect the RFS to keep, and use, $50m to buy TVs and pay for the rent on post office boxes.
A possible solution?
A correspondent to this blog, on Facebook wrote “surely the RFS could set up another trust fund so this amazing money could be spent as donors & Celeste would like.” That may be an option.
The RFS could, I suppose, create a new trust – let’s call it, for the sake of the argument ‘the RFS Bushfire Relief Fund Trust’ – with more expansive purposes allowing the trust to grant money to those involved in bushfire relief etc. Setting up that trust could involve setting up a corporate entity, appointing a board, drafting a trust deed and given the amount of money involved employing staff. Once it is established, trustees of the RFS Brigades Donations fund could ask PayPal to release the donated money.
Once they have the money the trustees of the Brigades Donations Fund could vote to wind up or dissolve the trust. When the trust is wound up (cl 12.1):
… any surplus assets of the Trust … shall be paid or transferred to such one or more entities, funds, authorities or institutions that are Deductible Gift Recipients as the Trustees think fit and shall be nominated by the Trustees in writing, in such proportions and at such times as shall be determined by the Trustees …
The trustees could then nominate the new trust, the RFS Bushfire Relief Fund Trust to receive the funds. The new trust could then use the funds in accordance with their new trust deed. At the same time, or alternatively, on winding up the Trustees could nominate other, existing, charities to receive the money.
Whether that is part of the ongoing discussion between PayPal and the RFS I don’t know. The lawyers working on these problems will know much more about trust law than I do and have, based on instructions, their own view of what a reasonable response looks like and how it might be achieved. They are, no doubt, doing what they can to ensure that the RFS trust can receive the money and try to meet peoples’ expectations even though those expectations were not created by either PayPal, the RFS or the trustees of the Brigades Donations fund. For those complaining about the involvement of lawyers remembers that the lawyers are trying to deal with a complex situation that their clients – PayPal, the RFS and the trustees – did not create.
Finally, I have seen it reported on that great source of knowledge, social media, that Facebook and PayPal are allowing people who have donated, but did not realise the limited nature of the beneficiary, to obtain a refund of their donation so they can re-allocate their money should they wish to do so.