Donation Account FAQs
- How do Donation Accounts operate?
- What is involved in setting up a Donation Account?
- What is the role of the project organisation?
- What are the charges associated with Donation Accounts?
How do Donation Accounts operate?
If the project or program is approved by the FRRR Board, the lead organisation enters a Memorandum of Understanding (MoU) with FRRR. The MoU steps out the obligations of each party for the term of the MoU.
The marketing collateral is agreed upon and the local organisations commence fund raising. Funds for the project accumulate in the donation account within the FRRR Public Fund and are then directed to the organisation to utilise to implement the project.
FRRR are not fund managers and Donation Accounts will not be separately invested by FRRR nor will management accounts representing Donation Account capital be separately accounted for in the financial statements of FRRR.
Legally, all donations received by FRRR, belong to FRRR for the distribution at the discretion of the FRRR Board.
For identification purposes, Donation Accounts within the public fund are accounted for in separate management accounts.
This is a time-limited service determined by the length of the project. After reading about the three donation account types, please contact us to discuss how we can assist your community or organisation to raise funds.
What is involved in setting up a Donation Account?
The steps for working with FRRR support for a specific region, project or issue are:
1) Submit application
The project or issue needs to be charitable and within FRRR’s objectives of promoting rural and regional renewal, regeneration, and development in social, economic, environmental and cultural areas.
If the project aligns with FRRR's objectives, then the community organisation can submit its proposed project to FRRR with the following information:
- How much it seeks to raise over what time frame
- Details of the project or issue and how it wishes the money to be applied.
2) Consideration by FRRR Board
Once submitted, the FRRR Board will consider the application. FRRR is responsible for assessing all community–funded projects against the established FRRR criteria, and for ensuring that funded projects fall within the scope of FRRR purposes.
If the FRRR Board approves the project, an account within the FRRR general ledger system will be set up for the approved project.
3) Creation of Memorandum of Understanding (MoU)
Once approved, a Memorandum of Understanding (MoU) will be exchanged with the head of the lead community organisation detailing the terms and conditions of the agreement with FRRR.
The community organisation will then develop its publicity material /donation form in consultation with FRRR. All tax deductible money must be paid directly to FRRR for deposit into the FRRR Public Fund.
4) Project Funding
Monies raised towards the approved project will initially be held by FRRR until a request is made by the community organisation for the release of funds to the project.
Subsequent releases of funds will be subject to adequate reporting having been provided by the community organisation on the expenditure of previous funds releases.
FRRR charges a fee to manage a donation account, generally 5% of donations received, up to a maximum of $5,000 per donation.
What is the role of the project organisation?
FRRR currently offers two models:
- Donations are collected by the organisation overseeing the project. The organisation passes the donations through to FRRR (usually in batches). FRRR raises an official receipt for the donations and returns the receipts via the organisation for distribution to the donors. In this way the project organisation maintains the relationship with the donors; OR
- FRRR receives the donations directly from the donors and reports back to a donation account advisory committee.
What are the charges associated with Donation Accounts?
FRRR generally charges a fee of 5% of donations received to help defray the costs associated with:
- Confirming the project or organisation complies within FRRR’s objectives;
- Establishing a management account within FRRR’s Public Fund;
- Reviewing / advising on designing donation forms;
- Receipting tax deductible donations via EFT, cash, credit or invoice;
- Issuing receipts to donors;
- Reviewing charitable purposes of distributions and releasing funds; and
- Providing statements annually, quarterly and as requested to account holders.
FRRR only charges 2.5% for Community Foundations. Fees are WAIVED for Natural Disaster Recovery Appeals. Fees can be taken from the donation or paid for from an operating account, as agreed when the account is established.
Review the list of current Donation Accounts to see how other groups have used Donation Accounts to fundraise for local projects.