Liquor Licensing: Fundraising

Most of us appreciate that our local watering hole is not only a place of enjoyment, but a gathering place for like minded individuals fostering community spirit. This couldn’t be truer than for most regional pubs in WA.

With that being said, most licensed venues try and find ways to assist in fundraising efforts for their community and local sporting groups.

And you would think this would be a straight forward process correct?

Incorrect!!

If you weren’t already aware, liquor licensed premises in Western Australia are heavily regulated by red tape and paperwork. This includes the possibility of any fundraising efforts you may have in mind for your local community or not-for-profit organisation.

Section 104 (1) of the Liquor Control Act 1988 (LCA) states that if a licensee —

(a) enters into partnership with another person in relation to the business carried on under the licence; or

(b) enters into any agreement or arrangement under which another person may participate in the proceeds of the business carried on under the licence; or

(c) remunerates another person by reference to the proceeds or profits obtained from the business carried on under the licence or by reference to the quantity of liquor sold, then the licensee and that other person each commit an offence. This carries a maximum fine of $10 000. 

Here are some basic things to consider when contemplating fundraising at your venue;

1. Profit –Sharing

If you are planning on hosting an event at your venue and the organiser of the event will be receiving a portion of ticket sales (and the organiser is not the licensee), then a one-off profit-sharing arrangement is required.

Example

The Cancer Council decides they want to hold a ticketed fundraising dinner at your venue.

As the licensee you agree to help out, but a portion of each ticket sold must come back to your venue – after all, you do have to pay your staff their wages for working this event.

• Tickets are sold at $100per head.
• The $100 ticket entitles the participant to enter the venue, consume beer, wine & soft drinks and enjoy a 3 course sit down meal with entertainment for the duration of the event.
• Of the $100 paid for each ticket, $40 will be given back to your venue and $60 will be retained by Cancer Council (their profit/funds).

Because money from the sale of the ticket is being shared between the venue and the organiser; this is deemed to be a profit-sharing arrangement.

Application kit for One-off Profit Sharing Arrangement –

http://www.rgl.wa.gov.au/docs/default-source/rgl/profit_sharing_-amp-_management_agreements.pdf?sfvrsn=0

 

2. Donation

As a licensee, you may choose to run an event, and donate all proceeds of the event to a charity, then no profit-sharing is required. However, in this instance, you must ensure you are not paying or remunerating any other entity to assist or have any involvement in the event.    

Example 1

You decide you would like to raise money for the Cancer Council.

You contact the Cancer Council and advise them you would like to raise some funds for them and they consent.

You promote a night where every $2 from the sale of every pint and every garlic bread sold will be donated to a charity.

• Over the course of one trading night, you sell 100 pints and 50 garlic breads
• From the 100 pints you sold, you were able to make $200 in funds
• From the 50 garlic breads sold, you made $100 in funds
• You make out a cheque for $300 to the Cancer Council

There is no profit sharing in this circumstance as it was a straight donation. 

Example 2

You decide you want to organise a sit down 3 course dinner, ticketed event to raise money for The Cancer Council. You advise the Cancer Council of your intentions and they approve.

As the licensee you promote the event and all money from the ticket sales come back to you as the licensee of the venue where the dinner is being held.

• Tickets are sold at $100per head.
• The $100 ticket entitles the participant to enter the venue, consume beer, wine & soft drinks and enjoy a 3 course sit down meal for the duration of the evening trading hours.
• All of the money raised through the ticket sales for the dinner is donated to the Cancer Council.

There is no profit sharing in this circumstance as it was a straight donation. 

If you have a fundraising idea and you’re unsure if you require a permit or not, contact your friendly AHA(WA) office for further guidance.