Art Gallery of Western Australia Foundation Rules 1989

Foundation and its objects. The Foundation is a distinct entity under the Art Gallery Act, with objects that supplement those in section 28A(4) of that Act. Rule 2 expands these objects to focus on fundraising, financial assistance for education, publicity, community awareness, and doing incidental things. The Foundation does not itself own works of art or manage the Gallery; it raises and passes money to the Board.

Membership categories and qualification. There are six categories, each defined by a minimum cumulative gift value within any rolling five-year period. The base category (Member) requires $5,000 (or $4,000 for gifts made before the 2018 amendment). The highest (Patron) requires $1,000,000. These are cumulative - a person can make multiple gifts over five years to reach the threshold. Gifts may be in cash or kind, with the Board’s valuation of in‑kind gifts being conclusive under rule 3(3). A testamentary bequest covenant is treated as a gift of half its face amount (rule 3(6)). An undertaking to make gifts (pledge) is deemed to be a gift in full while the undertaking is honoured (rule 3(4)). This deeming provision allows immediate qualification upon signing a pledge, which is a significant benefit for donors who wish to claim membership status before fully paying.

Duration and cessation of membership. For natural persons, membership continues until resignation or death (rule 5(2)(a)). For bodies corporate or unincorporate, membership lasts 15 years from qualification unless renewed by further gifts (rule 5(2)(b)). This fixed term for corporate members creates an automatic membership limit, incentivising ongoing donations to maintain status. Members may resign by written notice to the Council chairman (rule 5(1)). A member who fails to comply with an undertaking within one month of notice from the Foundation ceases membership automatically, unless the Board determines otherwise or the member qualifies for a lower category from prior gifts (rule 3(5)). This is a strict default enforcement mechanism.

Council of the Foundation. The Council controls and manages the Foundation’s affairs (rule 7(1)). Its composition includes the Board chairman (or deputy), the Director, and between three and seven appointed persons (appointed initially by the Board, subsequently after consultation with the Council). Appointed members serve terms of up to three years, with a maximum of six consecutive years (rule 7(4)). The Council must not act contrary to Board requirements (rule 7(2)). This ensures Board oversight without requiring Board majority on the Council.

Council meetings and resolutions. Quorum is three members unless otherwise resolved (rule 9(2)). Each Council member has a deliberative vote, and the chairman has a casting vote (rule 9(3)). The Assistant Director - Administration and the Executive Officer may attend and participate but not vote (rule 9(4)). Minutes must be recorded and sent to the Board (rule 9(5)). Resolutions in writing signed by each member are valid without a meeting (rule 9(6)), allowing efficient decision-making.

General meetings of members. The Foundation must hold an annual general meeting each financial year (rule 12(1)). The Council submits an annual report and financial statements (rule 12(2)). Special general meetings may be called by the Council (rule 12(3)). Seven days’ notice is required (rule 12(4)); accidental omission does not invalidate proceedings (rule 12(5)). Quorum is the lesser of 50 members or 10% of members, but must include two Council members, one of whom must be the Director or an appointed member (rule 13). Voting is one vote per member on a show of hands or on a poll (rule 14). A poll may be demanded by the presiding person or any three members (rule 14(d)). Bodies corporate may appoint a representative, and any member may appoint a proxy in writing (rule 15).

Financial provisions. The Council must keep proper accounts to the satisfaction of the accountable authority of the Art Gallery (rule 16(1)). Accounts and records must be open for inspection by Council members and Board members (rule 16(2)). This ties the Foundation’s financial administration to public sector accountability standards.

Execution of documents. Deeds and documents under seal require signing, sealing and delivery by two Council members; other documents may be signed by two Council members (rule 17). This ensures no single member can bind the Foundation alone.

The Rules directly affect several distinct groups: prospective donors (individuals, corporations, unincorporated associations), existing members, the Board of the Art Gallery, the Council of the Foundation, employees or agents of the Foundation, and indirectly, the wider community and Art Gallery audience.

Donors and members. Individuals and entities that wish to support the Art Gallery and gain formal recognition through membership are the primary audience. The Rules impose a minimum gift threshold of $5,000 (or $4,000 pre-2018) over five years. This is a non-trivial barrier - it screens out smaller donors and focuses on those with sufficient disposable income or assets to make substantial gifts. The higher categories ($15,000 to $1,000,000) target high-net-worth individuals, philanthropic trusts and corporations seeking public association with a cultural institution. The ability to give in kind (e.g., artworks, property, services) broadens the pool but the Board’s valuation control (rule 3(3)) introduces uncertainty for donors - the Board’s valuation may differ from the donor’s expectation, potentially affecting qualification. Donors who covenant a testamentary bequest receive only half the face value toward membership (rule 3(6)), which reduces the incentive to make bequests compared to inter vivos gifts. The undertaking mechanism (rule 3(4)) allows donors to pledge future gifts and immediately qualify, but carries the risk of losing membership if the pledge is not honoured within one month of notice (rule 3(5)), subject to Board discretion. This creates a compliance burden for donors to meet scheduled payments.

Corporate members. Bodies corporate and unincorporate face a 15-year maximum membership term (rule 5(2)(b)), after which they must requalify. This is an unusual limitation compared to natural persons, who enjoy lifetime membership. It may reflect an expectation of ongoing support or a desire to refresh the membership base. Corporations that change ownership or strategy may allow membership to lapse naturally. The requirement to appoint a representative for voting (rule 15(1)) imposes a small administrative step.

The Board of the Art Gallery. The Board plays a central gatekeeping role: it determines the value of in‑kind gifts (rule 3(3)), approves forms for gift undertakings (rule 3(4)), decides whether to waive cessation of membership for non-compliance (rule 3(5)(a)), grants discretionary membership for achievement (rule 3(7)), appoints Council members (rule 7(3)(c)), and approves purposes for net proceeds (rule 2(f)). The Board also receives minutes of Council meetings (rule 9(5)) and annual general meeting minutes (rule 12(7)). The Board can make requirements known to the Council that the Council must not contravene (rule 7(2)). Thus the Board retains ultimate control, though the day-to-day management rests with the Council.

The Council of the Foundation. Council members (appointed and ex officio) bear the governance and management responsibilities. They must ensure compliance with the Rules, keep financial records, report to the Board, and further the Foundation’s objects. They face potential vacation of office for bankruptcy, unsound mind, imprisonment for 12 months or more, or absence from three consecutive meetings without leave (rule 8). The no‑action‑contrary-to-Board requirement (rule 7(2)) constrains their discretion. Appointed members are limited to six consecutive years on the Council (rule 7(4)), which prevents entrenchment but also removes experienced members. The inability to vote for the Assistant Director - Administration and Executive Officer (rule 9(4)) means these staff members attend but have no decision-making power, clarifying that the Council is a volunteer or non-executive body.

Friends of the Foundation. If the Council establishes a Friends register (rule 6), it creates a separate category of supporters who are not members. Their rights and obligations are entirely at the Council’s discretion. This allows the Foundation to engage a broader support base without the administrative burden of membership management, but Friends have no governance rights, no vote, and no guaranteed privileges.

Art Gallery staff and artists. The Foundation’s object to provide financial assistance for the Art Gallery’s educational programme (rule 2(b)) means that curators, educators, artists, and visiting experts may benefit from Foundation funds. However, the Rules do not oblige the Council to allocate any particular amount; it is a permissive power. Artists and teachers are indirect beneficiaries whose funding depends on Council and Board decisions.

The general public. The Rules aim to “widen knowledge, understanding and appreciation in the community” (rule 2(d)). The public receives educational programmes, exhibitions, and publications funded by Foundation monies. However, the cost of raising funds (salaries, consultants, events) is deducted from gross proceeds (rule 2(f)), so the net benefit to the public is reduced by administration expenses. There is no requirement for cost efficiency in fundraising; that is left to Council judgment.

Accountable authority of the Art Gallery. The Council must keep financial records to the satisfaction of this authority (rule 16(1)), likely the Chief Executive Officer or a designated officer under the Financial Management Act 2006. This links the Foundation to broader public sector financial oversight, imposing a compliance burden on the Council to satisfy an external standard.

Duties of the Council. The Council has a primary duty to control and manage the Foundation’s affairs and to further its objects (rule 7(1)). It must not take any action contrary to Board requirements (rule 7(2)). It must cause accurate minutes of its meetings to be recorded and preserved and a copy sent to the Board (rule 9(5)). It must submit to the annual general meeting an annual report and financial statements (rule 12(2)). It must cause proper accounts and records to be kept to the satisfaction of the accountable authority of the Art Gallery (rule 16(1)). It must ensure all moneys received are properly brought to account, payments correctly made and authorised, and adequate control over incurring liabilities (rule 16(1)). It may employ persons or agents and procure professional assistance (rule 10(2)), and may appoint committees (rule 11). The Council must cause at least seven days’ notice of general meetings to be sent to members (rule 12(4)). It may establish a Friends register (rule 6). The Council also has the power to determine the procedure for its meetings (rule 9(1)) and to resolve on the quorum (rule 9(2) - default three members). The duty to not act contrary to Board requirements (rule 7(2)) is significant: the Board can alter the Foundation’s course without amending the Rules, simply by making requirements known to the Council.

Duties of the Board. The Board must determine the value of in‑kind gifts (rule 3(3)) and approve the form of gift undertakings (rule 3(4)). It may determine otherwise if a member fails to comply with an undertaking (rule 3(5)(a)). It may grant membership to persons not otherwise qualified based on achievement or services (rule 3(7)). It must appoint the initial Council members and, after consultation with the Council, subsequent members (rule 7(3)(c)). It receives minutes of Council meetings (rule 9(5)) and of general meetings (rule 12(7)), and approves purposes for net proceeds (rule 2(f)). The Board’s approval is required for the use of proceeds beyond acquisition of works (rule 2(f)). The Board can also make requirements that bind the Council (rule 7(2)).

Rights of members. Members have the right to attend and vote at general meetings (rules 12, 14). Each member has one vote on a show of hands and one vote on a poll (rule 14(a)-(b)). Members may demand a poll (rule 14(d)). Members may appoint a proxy to vote on their behalf (rule 15(2)), and bodies corporate may appoint a representative (rule 15(1)). Members have the right to inspect the Foundation’s accounts and records during normal office hours (rule 16(2)), though only Council members and Board members are explicitly given that right - members generally? The rule says “members of the Council and members of the Board”. It does not say “members of the Foundation”. This is a potential limitation: ordinary members may not have a statutory right to inspect accounts under these Rules, only Council and Board members. This is a significant point - checking rule 16(2): “accounts and records ... shall be open ... for inspection by members of the Council and members of the Board.” It does not extend to general members. So members have no right to inspect financial records unless the Council or Board chooses to disclose them at the annual general meeting. That is a notable restriction.

Members have the right to resign by written notice (rule 5(1)). They may progress to a higher membership category by making additional gifts (rule 4(2)). Members who have made a bequest covenant are entitled to have that deemed as half the amount for membership qualification (rule 3(6)), though this is not strictly a right but a deeming provision.

Rights of Council members. Council members have the right to attend and vote at Council meetings (rule 9(3)), with a casting vote for the chair (rule 9(3)). They may participate in writing resolutions to pass matters without a meeting (rule 9(6)). They can inspect accounts (rule 16(2)). They may resign by written notice (rule 8(a)). They are entitled to be notified of meetings; the Council determines its own procedure (rule 9(1)). However, they owe duties of diligence and must not be absent without leave from three consecutive meetings (rule 8(e)), which leads to vacation of office.

Rights of proxies and representatives. The Rules permit a member to appoint a proxy in writing, for such period and upon such conditions as the appointer determines (rule 15(2)-(3)). This gives flexibility. A body corporate can appoint a representative who is taken to be present in person (rule 15(1) read with rule 14(a)). Proxies can vote on a poll but not on a show of hands under rule 14(a) which limits show of hands to members present in person. So proxies are limited to polls (and any other voting method not specified). That restricts proxy effectiveness at meetings where only show of hands is taken.

Rights of the Board. The Board has the right to receive minutes of Council meetings and general meetings (rules 9(5), 12(7)). It has the power to make requirements binding on the Council (rule 7(2)). It determines membership categories in practice by its power to value in‑kind gifts and approve undertakings. It appoints Council members (rule 7(3)(c)). It has the right to inspect accounts and records (rule 16(2)). It approves the purposes for which net proceeds are paid (rule 2(f)). These rights ensure the Board retains control over the Foundation despite the Council’s management role.

The Rules themselves do not impose fines, criminal penalties or civil pecuniary penalties. Enforcement mechanisms are limited to internal governance consequences.

Cessation of membership. The primary penalty for members is loss of membership. Under rule 3(5), if a member fails to comply with a gift undertaking within one month of notice from the Foundation that a specified gift is due, membership ceases automatically unless the Board determines otherwise or prior gifts qualify the person for a lower membership category. This is a strict default: no hearing, no grace period beyond the month, no obligation on the Foundation to warn before the notice. The Board can exercise discretion to avoid cessation, but there is no right to appeal. This creates a risk for donors who pledge gifts over time and then face financial difficulty; they lose membership status.

Vacation of Council office. Rule 8 sets out events that cause a Council member’s office to become vacant: resignation, bankruptcy, being of unsound mind, imprisonment for 12 months or more, or absence without leave from three consecutive Council meetings of which the member had notice. There is no Board or Council discretion to waive these - they are automatic. Bankruptcy and unsound mind are not defined in the Rules but presumably refer to legal determinations. Absence from three consecutive meetings without leave is a relatively low threshold; a Council member who misses three meetings in a row (even if for good reason but without obtaining leave) forfeits office. This places a duty on members to seek leave for absences.

Invalidation of resolutions or actions. There is no specific penalty for violating the requirement that the Council not take action contrary to Board requirements (rule 7(2)). However, such actions could be ultra vires the Council’s authority, potentially voidable or challengeable by the Board. The Foundation’s deed execution (rule 17) requires two Council members; an invalidly executed document might not bind the Foundation, but that is a matter of contract and property law, not a penalty under the Rules.

Failure to comply with financial provisions. Rule 16 (financial provisions) does not specify consequences for failing to keep proper accounts or for misappropriation. General law (theft, fraud) would apply. The requirement that accounts be to the satisfaction of the accountable authority of the Art Gallery imposes a compliance standard; failure could result in the Board or auditor raising issues, but the Rules do not provide specific enforcement steps.

No statutory offence provisions. The Rules are subordinate legislation under the Art Gallery Act 1959. The parent Act may contain offence provisions for breaches of regulations, but the Rules themselves do not create offences. The legislative note indicates these are “Rules” made under the Act, likely with the force of regulation, but no penalty for breach is stated. This means enforcement relies on the Board’s control over the Council and membership, and ultimately on the ability to remove Council members or expel members. For external parties (e.g., donors who fail to pay pledges but are not members), the Rules have no direct enforcement; the Board might have a contractual claim under the undertaking, but that is beyond these Rules.

Potential for misuse of membership status. There is no provision for suspending or expelling a member who behaves contrary to the Foundation’s interests. Once a member qualifies, membership continues indefinitely (for natural persons) unless resignation or death. A member could in theory use membership status for commercial or reputational advantage in ways the Foundation dislikes, with no penalty under the Rules.

Parent Act: Art Gallery Act 1959. The Rules are made under this Act. Section 28A of the Act (not reproduced) establishes the Foundation and states its objects. The Rules provide “further objects” (rule 2) that supplement, not replace, those in the Act. The Act likely sets the Board’s general powers and duties, including establishment of the Foundation. Rule 7(2)’s requirement that the Council not act contrary to Board requirements derives from the Board’s overarching statutory authority. If the Act were amended to alter the Foundation’s purpose or dissolve it, the Rules would become inoperative or require amendment.

Financial Management Act 2006 (WA) and public sector accountability. Rule 16(1) requires the Council to keep accounts to the satisfaction of “the accountable authority of the Art Gallery”. This term is defined under the Financial Management Act 2006 (WA) and refers to the chief executive officer or governing body responsible for financial management of a public sector entity. The Art Gallery is likely a statutory authority, and its accountable authority will apply standards under financial management legislation, including requirements for proper records, audit, and reporting. The Foundation’s accounts are to be kept to that standard, but the Rules do not require the Foundation itself to be audited under that Act unless the accountable authority so requires. The Foundation may be a separate legal entity (or part of the Gallery), so its relationship to the state’s financial framework is ambiguous from the Rules alone.

Taxation law - deductible gift recipient (DGR) status. The Rules do not mention taxation, but the Foundation’s ability to receive tax-deductible gifts depends on external law. The Board of the Art Gallery is likely a deductible gift recipient under Division 30 of the Income Tax Assessment Act 1997 (Cth) as a public museum or art gallery. Gifts to the Foundation might be routed to the Board, but if the Foundation is a separate entity, its DGR status would need separate endorsement. Rule 2(f) says net proceeds are paid to the Board; donors may give directly to the Board or to the Foundation. The deeming provisions (rule 3(4) - undertakings) and gift valuation (rule 3(3)) interact with tax law: a gift is only tax-deductible if it meets the definition in the Income Tax Assessment Act. The Board’s determination of value for Rule purposes may differ from the Australian Tax Office’s valuation. Donors should not assume that a gift recognised under these Rules automatically qualifies as a tax deduction.

Charities and not-for-profit law. The Foundation is not necessarily a registered charity under the Charities Act 2013 (Cth) or the Associations Incorporation Act 2015 (WA). It is established by statute and its Rules do not require it to register. Its governance (Council, meetings, financial provisions) is less detailed than incorporated associations legislation, but it is not subject to that Act unless it also incorporates. The absence of a requirement for the Foundation to be incorporated means it may operate as an unincorporated body, with members potentially personally liable for debts. However, the Board (a statutory body) may provide a shield; this is unclear from the Rules.

Common law and contract. Gift undertakings (rule 3(4)) are likely contractual promises. If a donor fails to honour an undertaking, the Foundation or Board may have a contractual claim, though the Rules only provide for cessation of membership. The ability to sue on the undertaking depends on the terms and applicable contract law, not the Rules.

State Records Act 2000 (WA). The Foundation’s records may be subject to the State Records Act if the Foundation is part of a public authority. Rule 16 requires proper accounts to be kept; retention and disposal would follow that Act.

Human rights and anti-discrimination law. The Rules create distinctions based on financial contributions. They do not discriminate on prohibited grounds under the Equal Opportunity Act 1984 (WA) or Racial Discrimination Act 1975 (Cth) because the basis is monetary, which is not a protected attribute. However, the Board’s discretionary power to grant membership for “artistic or other achievement or services” (rule 3(7)) could be exercised in a way that indirectly discriminates, but that is not prohibited by the Rules themselves.

Interaction with other fundraising laws. The Foundation is not required to hold a fundraising licence under the Charitable Collections Act 1946 (WA) if it is a statutory body, but if it is a separate unincorporated association, it may need to comply. The Rules do not address licences or permits.

The Rules were originally made in 1989 and published in the Western Australian Government Gazette on 27 January 1989 (page 285-7). They commenced on that date. The only amendment identified in the compilation table is the Art Gallery of Western Australia Foundation Amendment Rules 2018, gazetted on 28 December 2018 (page 4884-5). The 2018 amendment had two commencement dates: rules 1 and 2 commenced on 28 December 2018, and the substantive rules (rule 3 onwards) commenced on 29 December 2018.

The key substantive change in 2018: rule 3 of the Amendment Rules amended rule 3 of the principal Rules, raising the minimum gift amount for membership qualification from $4,000 to $5,000 within a five-year period (see rule 3(2)(a) as amended). It also inserted a transitional provision (rule 3(2)(b)) to preserve qualification for gifts of $4,000 made in a five-year period that ended before the amendment’s commencement. Similarly, rule 4(1)(a) was changed from $4,000 to $5,000, and a new rule 4(1A) was inserted to maintain the old threshold for pre-amendment gifts. The amendment also updated the citation to remove “The” from the title (rule 1 and compilation note 2).

The 2018 amendment did not alter the higher membership thresholds ($15,000, $50,000, $100,000, $500,000, $1,000,000) - only the base level was adjusted. This suggests a policy decision to increase the entry barrier for membership, possibly to reflect inflation or to make membership more exclusive. The transitional provision indicates that donors who had already given $4,000 before the amendment would not lose their qualification, preventing retrospective adverse effects. However, donors who had given less than $4,000 but were in the process of accumulating gifts up to $4,000 would now need to reach $5,000 unless they had completed the five-year period before the amendment - which may be difficult to prove without clear record-keeping.

The Rules were reprinted as at 2 April 2004 (Reprint 1), which would have incorporated any amendments up to that date. Since the only amendment since 1989 is the 2018 one, the Rules remained largely unchanged for nearly three decades. This stability is unusual for subordinate legislation, suggesting the Foundation was either inactive or operated without perceived need for changes. The 2018 amendment may have been prompted by a review or by the need to align with increasing costs.

The compilation table notes that the citation was changed from “The Art Gallery of Western Australia Foundation Rules 1989” to “Art Gallery of Western Australia Foundation Rules 1989” (dropping “The”). This is a minor editorial change.

No other amendments are recorded. The Rules have not been superseded or repealed. They remain in force as of the latest compilation.

The source text contains no reference to any litigation concerning these Rules. No cases are mentioned in the Rules themselves, and the compilation table does not cite any legal proceedings. The Rules have not been judicially considered or interpreted in any reported decision (as far as can be determined from the source). This is not surprising: subordinate legislation governing a small cultural foundation’s membership is unlikely to generate court proceedings. Disputes over membership entitlements, valuation of in-kind gifts, or Council appointments would typically be resolved internally or through administrative review in the State Administrative Tribunal (if the Board is a public authority). However, the Rules do not provide for an internal appeal mechanism or a right to seek review of Board decisions (e.g., valuation under rule 3(3), discretionary membership under rule 3(7), or cessation of membership under rule 3(5)). A disgruntled donor might challenge a Board valuation as unreasonable or discriminatory, but the Rules give no criteria for valuation, making a legal challenge difficult.

Potential hypothetical litigation: a member could seek an injunction to prevent the Council from taking action contrary to Board requirements (rule 7(2)) if they believe such action harms the Foundation. A Council member removed for absence without leave (rule 8(e)) could argue the leave was not properly sought or that notice was not given. A corporation whose membership was not renewed after 15 years (rule 5(2)(b)) could argue discrimination against corporate members compared to natural persons. But none of these have eventuated in reported law, according to the source. The absence of litigation history suggests the Rules operate without public controversy, or that disputes are resolved informally. It may also reflect that the Foundation is small and its membership exclusive, reducing the likelihood of adversarial action.

For a deep dive, it is worth noting that the Rules do not create any statutory cause of action for breach. Non-compliance is handled internally. If a donor sues for breach of contract (e.g., the Foundation fails to recognise membership after a gift), the Rules would be evidence of the scheme but not the sole basis for a claim. The litigation history is effectively nil, but that does not mean the Rules are immune to challenge; it means no known cases have arisen from this specific instrument.

Several provisions in these Rules contain traps for the unwary - donors, Council members, and even the Board’s own staff.

The one-month default for pledges (rule 3(5)). A person who undertakes to make gifts over time is deemed to have made the gift in full while the undertaking is complied with (rule 3(4)). But if the donor fails to make a specified gift within one month of the Foundation posting or otherwise delivering a notice that the gift is due, membership ceases automatically. The Board may determine otherwise, but there is no guarantee. The trap: if the donor changes address and does not receive the notice, the one-month clock still runs (rule 12(5) provides that accidental omission to give notice of a meeting does not invalidate proceedings - a similar principle might apply?). The rule says “posting or other delivery to the member” - so if the Foundation posts to the last known address, it may be deemed delivery even if the member doesn’t receive it. This creates risk for donors who move without updating their address.

Corporate membership limited to 15 years (rule 5(2)(b)). A body corporate or unincorporate that qualifies for membership holds that status for only 15 years from the date of qualification. After that, membership ends unless the body makes further gifts to requalify. There is no concept of renewal by simple notification; the body must meet the gift thresholds anew. A corporation that made a $5,000 gift in 2020 becomes a Member, but in 2035 membership lapses unless a further $5,000 (or more) in gifts is made within that 15-year window. The trap: corporations may be unaware of this sunset provision and assume membership is indefinite like it is for individuals. The Council is not obliged to remind corporate members of the impending expiry.

In-kind gift valuation by Board is final (rule 3(3)). The Board determines the value of a gift in kind for the purposes of rules 3 and 4. There is no appeal mechanism, no requirement for an independent valuer, and no criteria. A donor who offers a painting they believe is worth $50,000 may find the Board values it at $20,000, affecting their qualification category. The donor has no recourse under these Rules. However, the Rules do not prevent the donor from making an additional cash gift to make up the difference.

Bequest covenants valued at half (rule 3(6)). A person who covenants to make a testamentary bequest of a specified amount is deemed to have made a gift equal to one half of that amount for membership qualification. This incentivises bequests less than inter vivos gifts. A donor who would prefer to leave a bequest of $10,000 gets only $5,000 deemed value, so they would need a bequest of $10,000 to qualify for the base membership if the covenant is the only gift. The trap: donors may not read the fine print and assume a bequest counts at full value.

No automatic right for general members to inspect accounts (rule 16(2)). The financial records of the Foundation are open for inspection only by members of the Council and members of the Board. Ordinary members have no right to see the accounts, even though they are the donors whose gifts generated those funds. This lack of transparency could conceal financial mismanagement. The only financial information a member receives is the annual report and financial statements at the AGM (rule 12(2)), which may be summarised. Members who want detailed records cannot demand them under these Rules.

Quorum requirements at general meetings (rule 13). The quorum is the lesser of 50 members or 10% of members, but must include two Council members, one of whom must be the Director or an appointed Council member. If a general meeting fails to attract that quorum, proceedings cannot validly occur. Membership numbers are unknown, but if there are, say, 500 members, 10% is 50 - a high bar for attendance. The requirement for two Council members also means that if Council members fail to attend, the meeting is inquorate. This gives the Council effective veto power over general meetings.

Board’s power to grant membership for achievement (rule 3(7)). The Board may grant membership of any category to a person not otherwise qualified if the Board considers the person “so deserving by reason of artistic or other achievement or services to the Foundation or the Art Gallery”. This is completely discretionary and not defined. It allows the Board to bypass the financial thresholds entirely, creating a two-tier system: those who buy their membership and those who earn it through service. This could breed resentment among paying members who contribute financially. It also opens the door to cronyism if board members reward associates. The trap for a paying donor: they might discover a non-paying person holds the same category.

Council member’s term limit of six consecutive years (rule 7(4)). An appointed Council member cannot hold office for more than six consecutive years. This prevents long service but also means the Foundation loses experienced members after a maximum of two three-year terms. The Rules do not allow reappointment after a break, so a member could be excluded for life after six years. This creates a governance gap: the Board must continually find new appointees. If the Council relies on members with specific expertise (e.g., fundraising, legal), losing them after six years is costly.

Vacation of Council office for absence without leave from three consecutive meetings (rule 8(e)). This is strict - no requirement that the Council issue a warning or that absences are unreasonable. A Council member who misses three meetings in a row due to illness, travel, or work commitments without obtaining prior leave from the Council loses office automatically. The Council determines leave, but if the member fails to request leave, it cannot be granted retrospectively. The trap: a member might assume a brief absence is acceptable, only to discover they have been removed.

Council must not act contrary to Board requirements (rule 7(2)). This sounds reasonable, but the Board’s requirements can be communicated informally at any time. The Council could be in breach if it takes an action it reasonably believed was consistent, only to learn later that the Board holds a different view. The obligation is strict: no defence of good faith. This creates uncertainty for Council decision-making.

For donors seeking membership. The primary compliance step is to make gifts totalling at least $5,000 (or $4,000 for gifts made before 29 December 2018) within any five-year rolling period. Gifts can be in cash or kind, but in-kind gifts must be valued by the Board - the donor should obtain the Board’s valuation in writing before relying on the gift for qualification. If the Board’s valuation is lower than expected, the donor can top up with cash. For pledges, the donor must ensure the undertaking is in a form approved by the Board and must honor each instalment within one month of the Foundation’s notice that it is due. To avoid losing membership, the donor should maintain current contact details with the Foundation and respond promptly to notices. A donor considering a bequest should weigh the half-face-value rule: a $10,000 bequest covenant yields only $5,000 deemed value, still enough for base membership, but for higher categories larger bequests are needed. To progress to a higher category, additional gifts can be made at any time; the cumulative total over any five-year period counts. Donors should keep records of all gifts and bequest covenants.

For corporations and other bodies. Ensure that the membership qualification is properly made by the authorised representative. Keep track of the 15-year membership duration; the Council may not send renewal reminders. Plan to make additional gifts before the 15th anniversary to renew membership. Appoint a representative in writing (rule 15(1)) to exercise voting rights. If the body wishes to have multiple individuals attend meetings, it may need to appoint multiple proxies (one per meeting) but only one representative can be appointed for the body.

For the Council of the Foundation. Compliance obligations are extensive:

• Call and hold at least one annual general meeting each financial year (rule 12(1)). Ensure seven days’ notice is sent to all members (rule 12(4)). Prepare an annual report and financial statements (rule 12(2)).
• Keep proper accounts to the satisfaction of the accountable authority of the Art Gallery (rule 16(1)). Ensure all receipts and payments are properly recorded and authorised, and that liabilities are controlled.
• Maintain minutes of all Council meetings and send copies to the Board (rule 9(5)). Also send minutes of general meetings to the Board (rule 12(7)).
• Ensure the quorum for Council meetings is at least three unless otherwise resolved (rule 9(2)). For general meetings, ensure quorum includes two Council members including the Director or an appointed member (rule 13).
• Appoint committees only with clear terms of reference and require them to report to the Council (rule 11).
• Ensure all documents executed on behalf of the Foundation are signed by two Council members - for deeds, also sealed and delivered (rule 17).
• Do not take any action contrary to the Board’s requirements (rule 7(2)). The Council should seek written requirements from the Board to avoid ambiguity.
• Manage membership cessation under rule 3(5) carefully: if a donor fails to meet an undertaking, the Council should consider notifying the Board to exercise discretion if appropriate, rather than automatically terminating membership.

For the Board of the Art Gallery. The Board must:

• Determine the value of any in-kind gifts for membership qualification purposes (rule 3(3)). This should be done promptly and in writing to provide certainty to donors.
• Approve forms of gift undertakings (rule 3(4)). Standard forms should be created and provided to prospective donors.
• Consider exercising discretion under rule 3(5)(a) when a member fails to comply with an undertaking - this preserves goodwill while still holding the donor accountable.
• Grant discretionary membership under rule 3(7) only for demonstrated achievement or service; maintain records to justify decisions.
• Appoint Council members after consultation with the Council (rule 7(3)(c)), and ensure appointed members serve no more than six consecutive years (rule 7(4)).
• Communicate its requirements to the Council in writing and ensure the Council acknowledges them (rule 7(2)).
• Approve purposes for which net proceeds from the Foundation are used (rule 2(f)), beyond acquisition of works.
• Review minutes of Council meetings and general meetings (rules 9(5), 12(7)) to monitor compliance.
• The Board should also consider whether the Foundation’s financial records are being kept to the satisfaction of the accountable authority, and if not, direct the Council to rectify.

For the accountable authority of the Art Gallery. This officer should provide guidance to the Council on acceptable accounting standards and review the Foundation’s records periodically. The Council is required to keep accounts to the authority’s satisfaction (rule 16(1)), so the authority should communicate its expectations clearly.

General compliance pitfalls. All parties should be aware of the gap in member inspection rights - if members request access to accounts, the Council cannot grant it under the Rules, but might choose to provide a summary at the AGM. To avoid disputes, the Council could voluntarily allow inspection. The Council should also keep a register of members and Friends, and ensure that only qualified persons are listed as members. Friends are not members and have no voting rights - any communications or privileges for Friends must not blur that line. Finally, any amendments to these Rules require gazettal (as seen in 2018); the Council or Board cannot unilaterally change them without following the Act’s amendment procedure.