‘Charity Navigator’ Model Tipped to Replace ACNC

Kevin Andrews at the Australian Institute of Company Directors' NFP Directors Lunch in Melbourne.

A charity evaluator model based on the US-based Charity Navigator, could replace Australia’s charity regulator, Federal Social Services Minister Kevin Andrews revealed in speech to Not for Profit Directors.

Charity Navigator, an independent US Not for Profit that posts charity evaluations and compiles charity lists on topics such as Highly Paid CEOs at Low-Rated Charities and Inefficient Fundraisers, was named by Andrews as an option to replace the Australian Charities and Not-for-profit Commission at an Australian Institute of Company Directors Lunch in Melbourne.

In his speech, Andrews said the ACNC would be replaced by a National Centre for Excellence, “as a fount of both innovation and advocacy”. He said the ultimate aim would be to transfer the Centre’s ownership to the social sector.

“We’ll abolish the Australian Charities and Not-for-Profit Commission which in the view of this Government imposes an unnecessary and ponderous compliance burden on the sector,” Andrews said in his speech.

“We want to transfer the focus from coercive compliance and regulation to collaborative education, training and development.”

He said its ambit would include charities, clubs and associations that focus on social welfare, the arts, environment, health, medical research, animal welfare and education.

“And the Centre’s mandate will encompass both organisations that receive government funding and smaller local community groups that get little or no direct government support,” he said.

Andrews said he hoped to get the legislation to abolish the Australian Charities and Not-for-profit Commission into Parliament within the next two months and National Centre of Excellence up and running by early next financial year.

He also said as part of the plan there would be a return to the government agencies, for example the Australian Tax Office, which previously regulated parts of the sector.

“We want to take a proverbial knife to the red and green tape that is stifling creativity and initiative in both the for-profit and Not for Profit sectors,” he said.

However Community Council for Australia Chief Executive Officer David Crosbie said combining a Centre of Excellence with a charity regulator was a recipe for disaster.

“The bottom line is we welcome a Centre for Excellence and we welcome an independent regulator, as we see in the ACNC,” Crosbie said.

“But let’s not combine the two, it’s a recipe for confusion for mixed missions and clarity of purpose.”

Crosbie said the Andrews’ idea behind the Centre for Excellence remained vague, however a centre that combined the best researchers on Not for Profit issues would be welcome.

In a list of top 10 super-sized charities in the US, the Charity Navigator website says it offers this list because it believes it is enlightening for donors to realise just how large many of America's charities are and why it is important that the US establishes a federal regulatory agency to monitor and regulate charities.

Minister Andrews said the Government would also be looking at the definition of charity.

“We had some concerns about the change which the Labor Party made last year and we didn’t support that and we’re currently looking at that definition at the present time,” he said.

“But we’ve made no decision about that yet.”

In his speech, he also confirmed the Coalition Government would be resurrecting the Community Business Partnership, chaired by the Prime Minister with Andrews as deputy.

“This is a body that was initially established under the former Coalition Government of John Howard and I’ll be providing additional details on the Partnership Mark II over the coming months,” he said.

“But at this preliminary stage, I can tell you this concept will be a direct reflection of our belief that empowering the community is more important that empowering government.

“The Community Business Partnership will bring together  leaders from the business and community sectors to promote philanthropic giving in Australia.”

The Federal Labor Opposition, the Greens and Not for Profit leaders have expressed their support for the continuation of the ACNC.

Shadow Assistant Treasurer Andrew Leigh said the Coalition Government had a tin ear for genuine dialogue with the charitable sector, which overwhelmingly wanted to keep the first national charity regulator.

“At the same time the Minister said he’ll listen to the sector. How patronising,” Dr Leigh said.

“The ACNC is the result of years of consultation and listening by Labor to the Not for Profit sector.

“The sector supports an independent regulator as a one-stop shop to strengthen charities, grow their profile and reduce red tape over time. The ACNC is based on a robust Productivity Commission inquiry.”

The Australian Greens said the Government was showing continuing disregard for the Not for Profit sector, commencing action to repeal the ACNC.

"The ACNC's purpose is to ensure more transparency and accountability of the Not for Profit sector and yet the Government is committed to abolishing it," Senator Rachel Siewert, Australian Greens spokesperson on families and community services, said.