Around $500,000 in unclaimed charity donations has now been transferred to government accounts after being unclaimed for several years, with the Salvation Army alone losing $100,000.
Federal and state governments are entitled to claim charity dollars if they lay dormant for a period of time, and it appears several groups including the Red Cross have not claimed hundreds of thousands of healthy bank accounts set up especially for them.
There is no evidence of foul play, but it appears several well-intentioned third party fundraising groups, such as school groups, took the donations and then sat on them.
“Folks in the community who wanted to raise money for the Salvation Army opened an account, for example, to put those funds in and possibly never saw the process right through,” Salvation Army spokesman Bruce Harmer told the ABC’s The World Today.
Susan Pascoe from the Australian Charities and Not-for-profits Commission said that seemed strange.
“A group that’s had sufficient passion to set up an account and fundraise for a particular purpose then hasn’t followed through, that is very odd behaviour,” she said.
Mr Harmer said the Salvation Army was now working with its lawyers to get as much of the “lost” money back as possible.
“It’s unfortunate when those things happen,” he said.
“But now that we are aware that the funds are there we are doing what we can to recoup and to put them to good use.”
Mr Harmer said he was not sure how long the funds had been sitting dormant.
Charities ‘not getting as much money as they should’
Australian businessman and philanthropist Dick Smith donates to the Salvation Army and said it was unlikely the charity would ever get the money back.
“I have a feeling that the money that’s gone to the government is probably going to stay there,” he said.
“But let’s hope that any future money goes there.
“They’re not getting as much money as they should.”
Ms Pascoe said the law should be changed to tighten the arrangements under which third party groups raise money for charity, and place onus on them to transfer the money to the correct charity.
“You wouldn’t want to prevent school children from raising monies,” she said.
Despite the financial mismanagement, the Salvation Army said Australians could rely on their charity dollars at Christmas time making it to someone who needs it.
“We are committed to the Australian community,” Mr Harmer said.
“It’s not a job, so to speak, for the Salvation Army, we really believe that we are part of the fabric of this community and we have a real purpose for being here.
“We are doing everything we can to support those who are finding it difficult to support themselves.”