Experts warn donors should be aware that money given to the RFS can’t be used to help bushfire victims or recovery efforts

This article is more than 8 months old

This article is more than 8 months old

The New South Wales Rural Fire Service trustee may be unable to distribute donated funds, including more than $50m raised by the comedian Celeste Barber, to other states or to bushfire victims, legal experts have warned.

At least $70m has been raised for the RFS, other state fire services, the Red Cross and wildlife charities, as part of a global fundraising effort during Australia’s horror bushfire season.

The RFS has received tens of millions of dollars – including Barber’s $50m fund and money raised through fundraisers promoted by Chris Hemsworth, Margot Robbie, and Prince Harry and Meghan.

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But legal experts say donors should be aware that money given to the RFS trustee cannot be used to help bushfire victims or recovery efforts.

Under the trust deed of the RFS, money donated can be used only “to meet the costs of purchasing and maintaining fire-fighting equipment”, for “training and resources” and the “administrative expenses of the Brigades”.

Barber’s fundraiser, conducted on Facebook, is among many that are specifically directed to the RFS trustee. The official donations page of the RFS also directs people to the trustee.

After Barber’s efforts raised $22m in just 48 hours, she posted on Instagram that she wanted to spread the funds to other state firefighters and charities.

“It’s going to the RFS and it will be distributed out,” she posted on her Instagram story. “I’m going to make sure that Victoria gets some, that South Australia gets some, also families of people who have died in these fires, the wildlife.

“I’m hearing you all. I want you to know that, otherwise why raise this money if it’s not going to go to the people who absolutely need it.”

But Darren Fittler, a lead partner in Gilbert + Tobin’s charities practice, said the trust deed limited how the RFS could apply the funds, and it could not transfer funds to other state firefighting agencies or charities.

“As soon as you have deductible gift recipient endorsement, you need to meet some rather narrow and strict requirements that are imposed on you by law,” he said. “There are very specific rules about how money provided to these funds can be used.

“This is an incredibly complex area of the law, straddling many domains and with differences across all states and territories. Any organisation asking for, receiving and spending funds to help the enormously worthwhile bushfire efforts should be well-advised.”

Dr Derwent Coshott from the University of Sydney agreed, saying the RFS trust deed “is clear”.

“The trust fund can only be used for the purposes of, essentially, maintaining the RFS brigades. The purposes of rebuilding homes, giving the money to some other organisation (even another state’s fire agency), are outside that explicitly stated purpose.”

Under the terms of Facebook fundraisers, money collected is placed in PayPal’s Giving Fund, which is itself a deductible gift recipient (DGR) charity.

Fittler told Guardian Australia the PayPal trust was a “public ancillary fund”. Public ancillary funds cannot give funds to other public or private ancillary funds, but can give to DGR charities such as state firefighting services or the Red Cross.

But he said representations made through the Facebook fundraising page – that the money was going only to the RFS – would make it difficult.

Coshott agreed, saying the PayPal fund could “distribute money to an entity that is charitable under the definition of an eligible entity in its trust deed – that would mean the Red Cross, Wires and more”.

But he said the PayPal trustees could not give it to whomever they wanted, contrary to the intentions of the donors.

“In other words, it wouldn’t be for Barber to decide to spread the money around, it would be for the trustees of the PayPal Giving Fund in line with the donations policy.”

“The real issue is that Barber has no control over this, and there’s no reason for PayPal not to honour the donations going to the NSW RFS,” Coshott told Guardian Australia.

On Tuesday, a PayPal spokesman said they had already started distributing the money from the Giving Fund to the RFS trustee.

He said PayPal had “been in conversation” with Barber and the RFS trustee about the release of funds – but not about the spreading of the money to other firefighting agencies.

“We are not involved in the discussion as to how the funds will be used,” he said. “Any questions pertaining to use of the funds are best answered by the Trustee of the NSW Rural Fire Service & Brigades Donation Fund.”

“[Our] first priority is to honour the donors’ wishes and grant donated funds to the charity they’ve nominated – which in the case of Celeste Barber’s fundraiser is the Trustee of the NSW Rural Fire Service & Brigades Donation Fund.”

Barber did not respond to a request for comment.

Her representative said she “will be keeping everyone updated via Instagram”.

Last Thursday, Barber posted on Instagram that the “money is getting moving”, without commenting on how it would be spread to other charities.

“I have had some pretty long and pretty boring conver­sations with fancy people at PayPal, Facebook and the RFS,” she said. “And I can tell you now, your money is getting moving. We are moving it, people. And Facebook and PayPal aren’t taking any of it.”

Fittler said if donors wanted their money to be spread across states they should donate to a public ancillary fund, or find a national charity.

The Victorian and South Australian governments have set up centralised funds that can collect donations and distribute charitable grants to a range of causes.

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The Victorian Bushfire Appeal is a fund endorsed by the Victorian government and managed by Bendigo Bank that will give out grants approved by an advisory panel. In South Australia, a similar fund has been created, called the State Emergency Relief Fund.

Other celebrities and organisations have donated to the bushfire relief effort in various ways. Publicly announced donations – not including donations from individual members of the public, or ongoing pledges based on future events – have totalled more than $70m.

The mining billionaire Andrew Forrest announced a $10m donation to the Red Cross and Salvation Army. He is also spending $10m to build a “volunteer army” of people to help rebuild communities, and $50m for research on bushfire prevention through his Minderoo Foundation.

The Amazon chief executive and billionaire Jeff Bezos announced his company would donate $1m, spread across a range of charities including the Red Cross, Salvation Army, the NSW animal rescue service Wires, and non-specific “Rural and Country Fire Services”.

The AFL has donated $2.5m – $1m to the Red Cross and $1.5m into a new Community Relief Fund set up by the league that will help local communities rebuild football clubs.

The rock band Metallica donated $750,000 – split between the RFS and the Victorian CFA, Kylie Jenner has donated $1m split across five firefighting services, while the Formula One driver Lewis Hamilton donated $750,000 to Wires, WWF Australia and the Rural Fire Service.