Call to Exempt Charities from International Philanthropy Ban

A consortia of charities has called on the federal government to exempt charities registered with the Australian Charities and Not-for-profits Commission (ACNC) from any legislation that bans receiving international philanthropy.

The consortia is led by the Australian Council for International Development, Philanthropy Australia and the Community Council for Australia.

The call follows a proposal to ban foreign donations to political parties in which the government flagged it also intends to ban overseas funding to other organisations including charities.

In a position paper released Friday the consortium said: “The impact of this wider push may mean that registered charities are prevented from accepting international philanthropy.”

Following the 2016 election, the Joint Standing Committee on Electoral Matters (JSCEM) conducted an inquiry into and report on all aspects of the conduct of the 2016 federal election.

The government members of the committee recommended a series of measures to ban foreign donations for third party activity that was not normally deemed to be “political” under the current disclosure regime.

The recommendations included activity undertaken by groups that were registered charities and had Deductible Gift Recipient status.

At the time the federal government said it would deliver a reform proposal to address the issue of foreign donations by the end of the year.

The not-for-profit position paper said new legislation would likely be based on the JSCEM recommendations and would seek to restrict overseas funding to organisations including Australian charities.

“International philanthropy complements Australian philanthropy’s support for charities, and makes an important contribution to Australian communities,” the paper said.

The paper listed why registered charities should continue to be allowed to receive international philanthropy:

• International philanthropy makes an important contribution to Australian charities in diverse fields such as health and medical research, Indigenous advancement, marine conservation, poverty alleviation, and education. The work this philanthropy supports has very high public value.
• Charities exist for the public benefit and must work to further their charitable purposes. They must fulfill this fundamental obligation to retain their charitable status under Australian law.

• The political activities of charities are strictly regulated and constrained by the Charities Act 2013 (Cth) and the Commonwealth Electoral Act 1918.

• Charities are already regulated by a statutory regulator, the ACNC, which has powers to investigate and impose serious sanctions for any alleged breaches under relevant acts.
• There is a category difference between political parties and charities. Charities have completely different access to and influence over the political process compared to political parties. Given the very different legal circumstances within which charities operate, a new set of regulations for political parties should not be applied to charities.

“Despite public concern about the influence of foreign money in politics, there is high public confidence and trust in charities, and their ability to stand up for the interests of everyday people and the issues they care about,” the paper said.

“International philanthropic funding is an important part of many charities’ annual budgets and enables them to deliver their public good. Imposing further restrictions on charities would restrict the voice of communities, and hinder the healthy operation of our democracy.

“We therefore propose that Australian charities registered with the Australian Charities and Not-for-profits Commission be exempt from any legislation that bans receiving international philanthropy.”

CCA CEO David Crosbie said if the proposal that any charities receiving any form of international philanthropy would be excluded from advocacy activities during an election campaign was adopted, it would have “major flow on implications” for the whole sector.  

“The experience in the UK is that just making charities audit their sources of income and their advocacy activities had ‘a chilling effect’ on the voice of charities during the recent election campaign,” Crosbie said.

“In practice this could mean any charity receiving international funding would have to go missing during election campaigns and all who campaign or advocate during elections would have to show they received no overseas donations.  

“CCA does not want a situation where international philanthropy is reduced or important voices from our sector are silenced.”

The position paper said: “In our increasingly globalised and interconnected world, international philanthropy and Australian charities are addressing common challenges. These challenges are often global in nature, and require transnational responses.

“Global capital markets are liberalised, promoting and encouraging the flow of capital. Australian charities, companies, and the Australian government, all send money to support charities in neighbouring countries in addressing local or common regional challenges.

“Any barriers that will inhibit resources flowing to Australian charities will reduce their ability to undertake their important work in Australia and surrounding regions.

“Registered charities should continue to be allowed to receive international philanthropy.”