All 350 RSL NSW sub-branches will be able to hold sausage sizzles, cake stalls, meat raffles, trivia nights and auctions to raise funds for veterans and their families following a decision by RSL NSW to lift a two-year ban on the practice.

RSL NSW president James Brown said fundraising was suspended in August 2017 amid concerns compliance failures could expose potentially hundreds of volunteers to penalties under the law.

"When it became clear during the Bergin Inquiry that we had an issue with fundraising compliance, there was very little data available to the new RSL leadership that showed the extent or nature of fundraising at a local level - it took nearly a year to collect that information from our sub-Branches," Mr Brown said.

"The restriction on fundraising was necessary to protect our hardworking local volunteers from unintentionally breaching the law and risking hefty fines or, in the worst case, a criminal penalty.

"We proposed governance changes in 2018 which would have reduced these risks, but they were not acceptable to members. Now we have alerted our members to possible compliance issues and are providing them with guidance to better manage their fundraising at the local level."

Nowra RSL secretary Debby Rayner said she was happy with the decision to lift the fundraising ban.

"Our only income is fundraising so it'll be a great help," she said.

Ms Rayner said the fundraising model was not going to be the same with the focus on smaller in-house activities such as raffles.

"Sub-branches can now apply to the NSW Department of Fair Trading to get back to the normal business of raising funds for veterans and their families. That will be welcome news to thousands of volunteers across the state," Mr Brown said.

The decision is part of sweeping reforms RSL NSW has undertaken to help restore community trust in the charity.

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