This week’s Supreme Court decision in relation to the $51 million that Celeste Barber raised is a good reminder about the importance of objectives, for all trusts, non-profits and companies.
Comedian Celeste Barber raised $51 million via a Facebook appeal during the recent summer bushfire crisis.
The NSW Rural Fire Service and Brigades Donations Fund (RFS Fund) is a charitable trust which was publicly named by Celeste, and nominated via PayPal, as the recipient of the donations.
The appeal raised far more money than expected – in fact, the most funds raised in any appeal on Facebook to date. Given the funds raised, focus shifted to whether, once the appeal went viral on the Internet, all the donors (many millions of people Australia and world wide) intended, or understood, that their donation was to go to the RFS Fund and its relatively narrow objectives.
Given the pressure on the RFS Fund to distribute the funds more broadly (to other organisations, including those in other States), the trustees of the RFS Fund sought direction from the Supreme Court of New South Wales (which was heard last week) to advise them as to their options.
The decision was handed down yesterday, which examined both the objectives of the PayPal Giving Fund (which collects donations as a charitable trust) and the objectives of the RFS Fund. Ultimately, the Court has advised the trustees of the RFS Fund that they must apply the funds in accordance with its objectives (and not use them for any alternative purpose) and that they cannot distribute the funds to any other organisation. Accordingly, the RFS Fund must use the funds for equipment, training and support for New South Wales volunteer fire fighters.
The public statements of Celeste Barber and various donors (who might have made comments which indicated a belief that their money would be used in a different way than the objectives in the RFS Fund) were found by the Court not to bind the trustees in the way they are required to apply those funds.
While the decision is technically limited to trusts in New South Wales, it is still a useful reminder for companies, non-profits and trusts alike that objectives are not just a tokenistic introduction to a trust deed or constitution – legally, they set the path that the organisation’s activities are required to follow .
If you need advice as to whether this decision may affect you, your demands or your business, please don’t hesitate to contact our Commercial + Property Team.