I have written a lot on the Celeste Barber fundraiser that has raised in excess of $50m for the Trustee of the NSW Rural Fire Service & Brigades Donations Fund.  I write now to respond to many comments that have been made on the Facebook donations page for the fundraiser.  There are thousands of comments so I’m not going to try to quote them or acknowledge the authors as, having read them, I’ll never find them again.  It means that some of the response may be based on my impression of and inaccurate recollection of what was said or implied rather than the exact words.

Let me also add that nothing written here implies or is intended to imply that Ms Barber has done anything wrong in setting up this fundraiser.  If people’s comments reflect their understanding or expectations that is not a reflection on Ms Barber.

An analogy

It may be helpful to draw an analogy. Ms Barber’s position may be considered as a charity collector. She knocks on the door and asks for a donation but rather than collect the money she leaves a pre-paid envelope.  Donors put their money in the envelope and put the envelope in the post-box.  If the charity collector thinks she’s raised more than expected and asked Australia Post to deliver the mail to another charity, the post office would rightly say ‘we are required to deliver the mail as addressed’. There may be options for Australia Post if mail cannot be delivered but if it can be delivered it will be.  Even if the person who posted the letter can ask for its return, the person who asked them to post it cannot.  The analogy is of course that PayPal are like the post office.

When the mail is delivered the recipient opens it and deposits the money.  If the charity collector rings and says ‘More people donated than i expected I would like you to send the money elsewhere’ the recipient would rightly say ‘we collect donations and we have to assume that the people who sent this money to us wanted us to have it and if we give it to someone else we’ll defeat their wishes (and it would be illegal)’.  Again you can see how the charity collector has no standing to tell the recipients what they should do with the money.

With that analogy in mind we can look at the fundraising effort with reference to the various trust deeds, policies and public statements.

Facebook fundraiser

On 3 January 2020 Celeste Barber set up a Facebook Fundraiser page asking people to donate to the Trustee of the NSW Rural Fire Service & Brigades Donations Fund.  She said:

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.

Who the recipient was to be was clear.

The Facebook donations page says that to set up a fundraiser the person must

1. Click Fundraisers in the left menu of your News Feed.
2. Click Raise Money
3. Select Nonprofit or Charity.
4. Select a charitable organization, choose a cover photo and fill in the fundraiser details.
5. Click Create.

Presumably Ms Barber did this and at step 4 nominated The Trustee of the NSW Rural Fire Service & Brigades Donations Fund.

To donate, people:

1. Click Donate on the post.
2. Enter the amount you’d like to donate.
3. Select a payment method or enter your payment information.
4. Click Donate [Amount].

Facebook distributes the funds in accordance with the directions from the donor (ie the person giving the money, not the person who established the fundraiser).

An organization’s location and enrollment status determine how donations made through Facebook are paid out. Facebook covers payment processing fees so that 100% of donations made on Facebook are distributed to the organization…

Charities based in Australia … can receive donations through PayPal Giving Fund Australia …

All fees are covered by Facebook.

First conclusion

The first conclusion is that Ms Barber never received and was never going to receive any of the donations.  People who ask her ‘when are you going to distribute the money?’ have missed the point.  It is not her money to distribute.  The person donated money to the PayPal Giving Fund Australia when they pressed ‘donate’ and at the same time they gave PayPal instructions to give the money to the Trustee of the NSW Rural Fire Service & Brigades Donations Fund once PayPal had confirmed that this was indeed a charity eligible to receive the donation (see Trust Deed for PayPal Giving Fund Australia and PayPal Giving Fund Donation Delivery Policy).

Second Ms Barber is given credit for PayPal not charging fees associated with the donation.  In a video that I have seen she says words to the effect that she asked them to waive the fee and they said they don’t charge fees.  She doesn’t say ‘they waived them’ but comments I have read do infer that some people think it was her intervention that led to no fees.  Facebook says:

We cover all fees for donations made on Facebook to charitable organizations. For personal fundraisers, payment processing fees are deducted and, in some countries, additional taxes when the money raised is distributed.

This is not something unique to this fundraiser or a response to Ms Barber’s request.

Trusts

The PayPal Giving Fund and the NSW Rural Fire Service & Brigades Donations Fund are both trusts.  Trusts represent a particular legal relationship.  There is the trustee, the trust property (in this case the $51m) and the beneficiary.   The trustee is the legal owner of the property but can only use the property for the benefit of the beneficiary.  This is not a silly legal rule, it guarantees the interests of beneficiaries against unscrupulous trustees.

In essence when a trustee receives money the trustee must use the money for the purpose for which it was received.  The purpose of the trust will be set out in a trust deed or will or other document that creates the trust.  In this case there are two relevant trust deeds – the deed that governs the PayPal Giving Fund and the deed that governs the NSW Rural Fire Service & Brigades Donations Fund.

The PayPal trust deed says that the trustees have discretion on where to distribute the money.  The donor’s instructions when they pay the donation is a factor to consider but they can diver the money elsewhere but as they say in their public document they only redirect the money where the gift fails or the nominated charity is not eligible to receive the benefit (see the Trust Deed and Delivery Policy cited above).

Given neither of those circumstances will be true in this case there is no reason for PayPal to redirect donations.  If they did they would frustrate those that did donate with the correct understanding that their donation was to go to the NSW Rural Fire Service & Brigades Donations Fund for the purposes of that fund.  It would also put at risk PayPal’s standing as a trustworthy way to donate.

Assuming PayPal pass the money, as instructed, to the NSW Rural Fire Service & Brigades Donations Fund then the trustees of that trust will have to use the money in a way consistent with that deed (Trust deed cl 3.3).

Second Conclusion

Although there is a theoretical option of PayPal to redirect the money that is unlikely given the criteria that they set out to explain when they will redirect funds will not be made out.  It is not PayPal’s role to reallocate funds if they think people did not understand who they were donating to. It is their role to honour their instruction, made when the donor pressed ‘donate’.

If there was a decision to reallocate any of the money it would be the decision of the trustees, not Ms Barber. She is not the trustee; she does not hold the money.

The NSW Rural Fire Service & Brigades Donations Fund

The New South Rural Fire Service is created by the Rural Fires Act 1997 (NSW). It is a government operated service just like Fire and Rescue NSW and NSW Police.  It depends on volunteer firefighters to operate, but the service itself is part of the NSW Government.  If the Rural Fire Service is sued, it is sued as ‘The State of New South Wales’ (see for example Electro Optic Systems Pty Ltd v State of New South Wales; West & Anor v State of New South Wales [2014] ACTCA 45 the litigation alleging negligence by the RFS in its management of the fires that ultimately burned into the Australian Capital Territory and Canberra).

The various brigades are established by the Commissioner (Rural Fires Act 1997 (NSW) s 15; acting on delegated authority from local governments -RFS Service Standard 2.1.1 Formation and Disbandment of Brigades and Groups of Brigades).   Brigades are an administrative unit of the Rural Fire Service in the same way that a fire brigade is part of Fire and Rescue NSW (Fire and Rescue NSW Act 1989 (NSW) Part 2). The brigades do have some existence; each brigade is created (s 15) so it makes sense to talk about the ‘Kickatinalong Rural Fire Brigade’ being the Brigade established by the Commissioner for the area of operations defined by the Commissioner (s 18) and made up of the members listed in the register maintained by the Commissioner (s 20). It therefore makes sense to say someone has donated money for the Kickatinalong brigade but the beneficiary of that donation is in law the Rural Fire Service (or, more accurately, the State of NSW).

The trust deed says that the trustees can apportion money to brigades (so they can earmark the amount of any donation intended for a particular brigade for the use of that brigade (cl 4)). If that brigade ceased to exist the beneficiary is the RFS so the trust could use that money to give to the RFS Central Fund or allocate to another brigade.

Assuming this donation is not earmarked for a single brigade, it will go into the Central Fund (2017-2018 Annual report) and the beneficiary will be the Rural Fire Service represented by the Commissioner. The trustees can still only spend the money for the purposes of the trust. It will be up to the Commissioner to nominate what he would like to spend the money on, and the trustees to determine if that meets the purpose of the trust.

The trust was established (2017-2018 Annual report):

… to make available to brigades the ability to accept tax-deductible donations, both in person and online, with as little administrative burden as possible. It was established and is operated solely for the purpose of supporting the volunteer-based fire and emergency service activities of the brigades.

The trust was set up to obtain Deductible Gift Recipient Status so that if someone wanted to donate to their local brigade they could give the money to the trust, receive a receipt to allow them to claim a tax deduction and the trustees would ‘earmark’ the amount equal to the donation as being available for the named brigade (Trust deed cl 4).

This fund is a ‘Fire and Emergency Services Fund’. To obtain and maintain Deductible Gift Recipient status is has to be

A public fund that satisfies all of the following requirements:

it is established and maintained by a non-profit entity or an Australian government agency

• the principal activity of the entity is providing volunteer-based emergency services that are regulated by a state or territory law
• it is established and maintained solely for the purpose of supporting the volunteer-based emergency service activities of the entity.

The NSW Rural Fire Service & Brigades Donations Fund meets those criteria – it is a public fund (Trust Deed cl. 2.6), it is established ‘Australian government agency’, which means:

• the Commonwealth, a state or a territory
• an authority of the Commonwealth, a state or a territory.

The RFS is established by the State of New South Wales as an authority of that state.

It is ‘established and maintained solely for the purpose of supporting the volunteer-based emergency service activities of the entity’ (Trust deed cl 2.3).

Having received the money the trustees are only allowed to spend it for the purposes of the trust – (Trust Deed cll 2.3 and 3.3). If they used the money for other purposes they not only risk personal liability for breach of trust, they would threaten the funds Deductible Gift Recipient status.   The only use that they can make of the funds is (Trust Deed cl 2.3):

(a) 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…

(a)[sic]  For authorised investments which are consistent with carrying out the purpose described in the bullet point above

(b) To meet the reasonable costs of the current and continuing operation and management of the Trust.

The trust fund is not the sole income of the Rural Fire Service.  I saw one comment to the effect that 95% of the RFS budget comes from donations. That is not correct.  95% of the funds in the NSW Rural Fire Service & Brigades Donations Fund come from donations but that is because it is a donations fund.  The budget for the RFS in 2017-18 was $424 million provided by the Government (see Diverting facebook donations (January 6, 2020)).

Third conclusion

Under the current trust deed the trustees cannot redistribute the money to other charities for other purposes or to fire brigades in other states and territories. Money donated to this fund was never for direct payment to firefighters or to those affected by the fire or for animal welfare.  That is not what this trust was set up to do.

There may be ways to allow for a diversion of some of the $51m. Some suggested ones are:

1. A special Act of Parliament
2. An order from the Supreme Court (but on what basis I don’t know as the trust has not failed and the deed is not ambiguous)
3. Wind up the trust and allow the trustees under cl 11 to redistribute the funds (see Donations to RFS trust on hold (January 13, 2020)).

Whether any of those options are pursued or whether the RFS lawyers think of any other option, the outcome will depend on the RFS, not Ms Barber.

Further even if any of those option are adopted, or some other way is found, it won’t be quick.

Administrative costs

Many people complain that donations are eaten up in administrative costs.  In this case there was a trust fund that usually receives small donations to support local brigades – a hundred dollars here or there.  To give them $51m, particularly when it comes with expectations that it will be spent in a way that the trust has never operated will incur expenses that have to be met.   It is like a church auxiliary run a fund raising effort to collect $30 000 to repair the church roof and someone gives them $51m and then asks ‘why aren’t you spending that money or welfare for the poor etc?’  The answer would be ‘we don’t know how to spend $51m and what’s more we promised to spend all the money you gave us on the roof’.

Giving this sum of money to the NSW Rural Fire Service & Brigades Donations Fund with expectations that they will spend it in ways that they are not authorised to do and is outside their experience might be described as a nightmare (Diverting facebook donations (January 6, 2020)) or more charitably as ‘a challenge for the organisation, but … a “nice challenge to have”’ (Donations to RFS trust on hold (January 13, 2020).  Either way it is going to incur administrative expenses to set up systems to manage the donation and, if the RFS wants to distribute the money to meet (at least some) expectations, dealing with the legal issues caused by this donation.

If people are worried about delays in releasing the funds to the RFS or how it might be spent, remember this challenge was something delivered to them (albeit with a very nice potential cheque for $51m).  It will cost money to set up and manage this sum of money no matter what is done with it.

Where will it go

People have all sorts of ideas what the money will be used for.  It won’t be used for fire appliances – the Commissioner has promised

… 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.

It is unlikely to be used for facemasks.  Firefighters have been calling for different masks but these have not been issued by the RFS.  The RFS is the Person Conducting the Business or Undertaking (the PCBU) for the purposes of the Work Health and Safety Act 2011 (NSW).  It owes the same duty to provide a safe work place for both volunteers and paid staff.  Issuing personal protective equipment requires an assessment of various items and a balancing of costs and benefits.  I understand that the RFS issues P2 masks as other masks haven’t been assessed and require considerations of being fit for purpose.  Where equipment is issued there is an obligation to ensure it is maintained and those that use it are trained.  There are many reasons, other than money, why the RFS might determine that the best solution taking everything into account is P2 masks.  The issue has not been money so giving this money won’t ensure that the RFS now spend it in that way.  Another charity has got around that by buying masks and handing them out rather than giving money to the RFS in the hope that they’ll spend it in a particular way (see Donated respirators for RFS firefighters (updated 12 January 2020) (December 29, 2019).

A prudent trustee would not spend all this money.  If they do buy new equipment they need to ensure that there is money for training and maintenance and to meet future needs.  I would suggest that a prudent trustee would invest a large part of the money in order to secure a future and ongoing supply of money into the future.  That is permitted by the Trust Deed (cl 5.1).

Conclusion Four

People who expect this money to be used to fund the immediate relief of those affected by bushfires have donated to the wrong fund. This is not ‘governments’ taking their share off the top, or misappropriation by the charity, or lawyers getting in to take their share.  Ms Barber’s not pocketing any money; PayPal’s not pocketing any money. The NSW RFS will get the benefit of the money because it was donated to a trust fund established so people could make tax deductible gifts to the RFS to be used to support the RFS brigades and volunteers.  That is what is was for.  But the RFS is likely to recognise that there is a weight of expectation that the money may be used in other ways. They may be looking at how to do that.  Whatever they decide, they will need to take time to consider how they will manage this donation.  If people have expectations that the money will be used for purposes other than those set out in the trust deed, and if those expectations are not met, it will not be the fault of either the RFS, the trustees or PayPal.

Conclusion

• Ms Barber set up a fundraising page and that was great.
• Over 1 million people donated and that is awesome.
• The total donation is over $50m, people’s generosity is staggering.
• The money is earmarked for the NSW Rural Fire Service & Brigades Donations Fund so every donor can get a deduction (at least if they pay tax in Australia) and that’s great.
• The RFS is a wonderful organisation staffed by great people – employed and volunteer alike. The trustees and the Commissioner will no doubt use the money to enhance the capability of the service into the future.  They are deserving recipients.
• Expectations that the money will be used to provide immediate assistance to brigades or those affected by these fires are misplaced.
• One might hope that the finds will be distributed to other charities for other purposes but one should not be overconfident. If the RFS finds a way to do that the credit will belong to the RFS and its lawyers.
• Ms Barber did not collect the money; she did not donate the money; she did not ‘persuade’ Facebook or PayPal to waive fees as they don’t charge fees when collecting for not for profits. (And let me add here, I don’t for a moment suggest that she has claimed to have done those things; but comments on the donations page imply people think she did those things).
• Ms Barber may have some moral say in what happens to the money as it was her call for donations that raised the money and she has a large and loyal following so she carries a large weight of public opinion – a constituency if you like – but legally the allocation of the money has nothing to do with her.  Donors allocated their money when they pressed ‘donate’ – she asked donors to donate to the NSW Rural Fire Service & Brigades Donations Fund and they did.   The responsibility for what to do with the money lies first with PayPal and then with Trustee of the NSW Rural Fire Service & Brigades Donations Fund and they must, first and foremost, act in accordance with the governing trust deeds.  Anything else would, literally, be a breach of trust.