These two questions came as comments on my post RFS donations and writing new law (February 26, 2020) but I thought they warranted their own response rather than being lost and perhaps unseen in the comments.

The first comment was:

If NSW change the legislation, who then decides where & how the money is allocated? Can the NSW legislation enforce donations to be made outside of NSW?

The answer is that the Bill proposed by the Greens would empower the trustees to distribute money in ways not intended by the trust deed, but it would not compel them to do so. The answer to the question ‘who then decides where & how the money is allocated?’ is ‘the trustees’.    If the Parliament directed the trustees, the Parliament would in fact be commandeering private property and that creates its own problems.

It has to be understood that there is the Rural Fire Service created by the Rural Fires Act.  That service is a government operated service. The Rural Fire Service Donations and Brigades Fund is not the RFS, it is a separate entity. It receives money that people want to donate and it can only spend that money for the benefit of the RFS, but it is not the RFS.  It is its own legal entity. The parliament can authorise the trustees to spend their money, but it cannot direct them.  That then leads to the next and more detailed comment from the Draggacannalong Brigade, next brigade over from Kickatinalong (and the Kickatinalong brigade is the subject of much discussion on this blog).  Matt, the captain of the Draggacannalong Brigade says:

I have just begun looking into this “Trust” as the initial request for funding applications has been advertised. The criteria is very wishy washy and contradictory after a bit of a look into it and asking for information about the Trust many things raised my concerns.

  1. I have been a RFS Member for ten years, of that Snr Dep Cpt for 2 then to date Cpt for 2 and have NEVER been made aware of this Trust or the ability to make application to access this funding?
  2. On investigation the Trustees are made up of Two RFS Staff and Four Members of the RFSA All of whom are appointed at the sole discretion of the RFS Commissioner for perpetuity.

Things seem to look like a very closed shop environment particularly that the RFSA to me appears to be a retirement home for washed up RFS staff.

Given that we are talking about an extremely large sum of private citizens money the lack of transparency concerns me very much.

If anyone would be willing to go into the details of my concern with me I would greatly appreciate it as I am by no means a scholar just a humble smoke sucking hillbilly from Draggacannalong.

I am sure you have been ‘made aware … the ability to make application to access this funding’ because everyone’s in a new world.  The purpose of the trust was to provide a central fund with tax deductible status.  The 2017-2018 annual report says (p. 4)

The purpose of the Trust is 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

As the RFS says ( ‘Some brigades may accept donations or gifts which can be tax deductible for the donor’ but many cannot. The trust allows people to make a donation to their brigade, the donation is received by the trust and ‘earmarked’ for the nominated brigade. The donor gets a receipt that allows them to claim a tax deduction. The captain of the nominated brigade can ask the trustees to spend the donated money and provided the purpose meets the terms of the deed, the trustees could spend the money accordingly – ie to buy equipment, pay for training or help meet the administrative expenses.

I’m sure that given the annual income of the trust was $1m (give or take) and most of those are donations for particular brigades, the issue of calling for applications of what to do with the money has never arisen.

And it’s true that the trustees are two members of the RFS staff and four members of the RFS three of whom are, in their profiles, also identified as members of the RFSA (2017-2018 annual report p. 7).  That may indeed appear as a ‘a very closed shop environment … Given that we are talking about an extremely large sum of private citizens money’ but it has to be remembered that before January 2020 the were not ‘an extremely large sum of private citizens money’, rather there were reasonably small donations. The 2017-18 annual report says that in that year the trust received $546,035.00 donated to individual brigades and $222,009.00 for the central fund.  They noted (p. 6):

Two large donations were received during the reporting period:

› $25,000 received on 23 April 2018

› $20,000 received on 26 June 2018

An unsolicited donation of $52m plus other donations that have come in this summer are clearly beyond the trust and the trustee’s experiences or expectations.  They must be on a steep learning curve to work out what this requires them to do and no doubt some of that trust money will need to be spent on legal and accounting advice.  Asking trustees to deal with this sum of money and the unstated and misplaced expectations of the donors must indeed be a large burden.  That the trust is not well set up to manage such a large inflow of money – coupled with moral expectations – is hardly surprising.

The trust is now a multi-million-dollar exercise. That the set up that run a small donations fund is not adequate for managing both the donations and then the inevitable investment income and finding new ways to spend the money should not be a surprise.  Re-thinking how to run the trust is, I imagine, occupying the minds of the trustees and the RFS executive as well as trying to work out if they can honour Ms Barber’s ill-informed promise.