From time to time questions of trust arise around the operation of certain charities. When concerns about governance, transparency or probity reach the headlines, community confidence is undermined and our willingness to donate to charities is eroded.
The reality for Australia’s 600,000 Nor-For-Profits, including 54,000 charities, is that the generosity of the Australian public matters. For small charities in particular, donations represent 32% of their total income.
Anything we can do to boost public confidence and preserve and increase levels of giving is worth pursuing. In many ways, lives depend on it.
In this context, Australia’s piecemeal, disconnected and fragmented regime of fundraising laws is truly anachronistic and in need of modernising.
Across the country there are seven different sets of fundraising laws. In and of themselves they can be onerous for a small fundraising NFP operating in a single jurisdiction. For larger entities operating in multiple jurisdictions, it can be a compliance minefield.
Those involved in fundraising for charitable purposes have long battled to meet the numerous, inconsistent requirements placed on them by the different jurisdictions. They frequently find themselves allocating a disproportionate amount of resources to complying with what in many cases are over-the-top regulatory requirements. And any money being spent on compliance is money not being spent on providing services.
Thankfully, the way forward is not overly complex, and there is already a degree of momentum building to move in that direction.
A coalition of NFP sector stakeholders, including our organisation, has been established to bring a focus to these issues and various governments are beginning to take action. Indeed, New South Wales Fair Trading consulted recently about the possibility of repealing charitable fundraising legislation in NSW.
From a legislative perspective, sensible and modest adjustments to the already existing national Australian Consumer Law could provide a clear, concise and enforceable national framework.
Elevating fundraising laws to the national level would allow states and territories to repeal their own laws. While states tend to be reluctant to give up powers, it’s something the NSW government is already doing. Both South Australia and Tasmania recently passed legislation simplifying compliance requirements for incorporated associations that also addresses red tape in some areas of charitable fundraising regulation.
If reforms are possible in these jurisdictions, then why not all?
It is important to stress that there needs to be a national regulatory regime to ensure adherence to the legislative requirements. It is true the chokehold of excessive regulation on fundraising NFPs needs to be relaxed, but equally the interests of funders and beneficiaries should be protected.
The risk of waiting too long
For those in the know, the Olive Cooke scandal in the United Kingdom is no new story. This terribly sad story of a 92-year-old woman who took her own life highlights some of the risks associated with aggressive fundraising. Mrs Cooke (pictured above) was a generous supporter of many charitable causes. Before her suicide she was alleged to have been distressed and overwhelmed by the number of approaches for donations; around 460 mailings a year and as many as 10 approaches a day.
Following the Olive Cooke case and other high-profile cases of malpractice, the UK government commissioned a review into charitable fundraising and the recommendations of the review resulted in the formation of the Fundraising Regulator in January this year.
Notwithstanding occasional examples of governance failings in certain charities, Australia has thankfully not had the same experiences of fundraising debacles. The task of providing a national oversight mechanism does not need a complex solution: We have a dedicated national regulator for charities, the Australian Charities and Not-for-profits Commission.
Since it was established in December 2012, the ACNC has built a publicly available and searchable register of charities. There are approximately 54,000 registered charities which are regulated by the ACNC and it is already empowered to take action against charities in certain circumstances.
While it is true that oversight of fundraising regulation is currently beyond the scope of the ACNC, it is ideally placed to fulfil that role in any new, national framework.
Too often we see the creation of laws after the failure occurs. Here we have an opportunity to create proactive regulation that is light-touch but robust enough to detect and prevent failures such as those recently experienced in the UK.
These moves — providing legislative and compliance simplification, with better oversight and effective enforcement — would be good news for charities and fundraising NFPs and provide reassurance to donors that they can confidently support their favourite charity.
With a relatively straightforward way forward, there are no excuses for not acting.