Open for Business – Not If You’re a Charity!

The message we are told is that ‘Australia is open for business’, but the sector that employs over 1 million Australians is still struggling with pre-federation barriers and red tape, writes the CEO of Community Council for Australia, David Crosbie.

Dollars donated for important causes are being chewed up in wasteful, duplicated and useless bureaucratic processes.

The problem is that each State and Territory maintains their own approach, their own way of regulating charities involved in fundraising.  World Vision estimates the cost of complying with the eight different fundraising regimes at over $1 million per annum.  Across the whole charities sector, the figure would run into hundreds of millions of dollars.

The following table is an overview of what was required for one small national charity to apply for registration of their fundraiser in each State and Territory (and this is just the beginning):

Sometimes the real imposition is in the detail.  

West Australian applications require all charities to organise and pay for police checks which are to be submitted with the application.  Queensland requires hard copies of the public advertisement. Victorian applications require each Director to sign the same copy of the application form, etc. etc.. You can quickly see how the time and cost involved in these processes escalates.

What happens to all this information?  A total of approximately 17 full time staff across Australia spend their time collecting, correcting and filing these applications.  There is little enforcement or follow-up, with less than ten charities being prosecuted each year for breaches.

Some of the requirements within the regulations seem to date back to horse and carriage.  For example, there are regulations covering the length of handles that can be attached to collection boxes and direct controls over who can open or count the money.

Scrutiny is important.  Trust is at the heart of the charity business.  Charities agree.

That is why most charities have argued for years that we should have a one-stop shop to regulate charities.  This is what led to the establishment of the Australian Charities and Not for Profit Commission (ACNC) and its job is to provide the charities sector and the Australian community with charities regulation that works.  

In less than two years of operation, it has created the first ever national charities register where anyone can quickly and simply check a charity’s bona-fides.  The ACNC not only investigates complaints against charities, but also provides follow-up to the complainant.  This has led to the delisting of a number of charities.  

In another first, the ACNC has managed to reduce red tape through setting up a charities passport, and is working with States to reduce duplication. These achievements, which have strengthened its standing with the charities sector, seem to have annoyed the Government who maintain a myopic commitment to axing it.

If that axe does fall, the charities sector is facing another 20 years like the last. Over that time there have been countless working parties, reviews, recommendations and endless amounts of taxpayer funded effort to harmonise these regulations.  All have failed.  Meanwhile dollars intended to go to charitable causes oil the rusty wheels of bureaucracy-to-no-end.

When the charities sector finally forced the issue of fundraising regulations onto the national agenda two years ago, it was dismissed by Consumer Affairs Ministers as not being important enough to worry about.

It seems many charities are adopting the same ‘who cares’ approach with less than 25 per cent of charities bothering to register fundraising activities.  Who can blame them?  When regulations are complicated, costly in money and time, and almost totally pointless, it is difficult to defend the process.

In the last Senate Estimates, the Government accused me of ‘publicly advocating willful lawlessness’ in relation to fundraising regulations.  I plead guilty – I find it difficult to advise charities that these regulations matter when Governments repeatedly dismiss the legitimate concerns of charities across Australia.

If the Abbott Government is really committed to public accountability and enabling charities to better serve their communities, it will get out of the way, and allow the ACNC to do its job overseeing all charities in Australia and reducing red tape.  

Unfortunately, there is a yawning chasm between the political rhetoric of red tape reduction and the reality of Government action.

Charities are big business – collectively turning over more than $107 billion a year – but many charities are drowning in red tape and facing ongoing uncertainty in regulation and funding.

Australia is clearly not open for business if your business is about trying to support and serve your community.

About the Author: David Crosbie is the Chief Executive Officer of the Community Council for Australia (CCA), and a member of the Advisory Board to the Australian Charities and Not-for-profits Commission (ACNC).