Fundraising, grantmaking and regulatory issues: regulating good in bad times

Abstract

The mobilisation and distribution of philanthropy in response to disasters occur with legal and regulatory frameworks associated with trust and charity law, and are promoted – or inhibited – by a government’s policies supporting philanthropy. In this chapter, the legal tangles that often arise in the collection and distribution of disaster funds are assessed. Key issues with legal implications include fraud, beneficiaries who do not meet the test of being ‘charitable’, the problems created when the amounts raised are too small or too large for the intended purposes, and communities divided over the distribution of funds. The potential conflicts between charity law and the expectations of donors and affected communities are illustrated through two sets of case studies: fatal bus crashes some 60 years apart in England and Canada; and Australian natural disaster appeals nearly 50 years apart. Philanthropy is not the only means of compensating those affected by disasters, however. It works alongside, albeit independently from, insurance, government payments and tort awards for negligence. The illustrative cases, coupled with the rise of online crowdfunding and social media, point to the need for reforms, including greater coordination between, or at least consideration of, the multiple modes of compensation.