Now or never – Time to fix fundraising

As charities impacted by COVID-19 desperately pivot to online fundraising to replace income lost from their usual face-to-face activities, it is critical that we fix fundraising regulations, writes David Crosbie, who proposes a draft set of regulatory principles.

The dog’s breakfast of fundraising regulations and requirements has been a running sore for charities in Australia trying to legitimately raise money through donations. A misplaced sense of state and territory sovereignty has ensured fundraising regulations in Australia are now an obsolete absurdity, a dysfunctional farce, an exercise in self-absorbed bureaucratic fantasy that is largely ignored by the majority of Australian fundraising charities and the communities they serve.

During the last Senate inquiry into this issue almost two years ago, an incredulous Senator Eric Abetz asked NSW Consumer Affairs officials if a small local bird watching charity in northern Tasmania had a “donate here” link on their website, would they have to comply with the myriad of different state and territory regulations and administrative requirements regarding fundraising licenses, including in New South Wales?  

The answer was yes.  

The campaign to fix fundraising regulations in Australia has been ongoing for many years. Unfortunately, it has not made much headway, but with COVID-19 highlighting regulatory failure and the need for reform, a faint glimmer of light has appeared in the gloom. 

In the last month, the federal Treasurer Josh Frydenberg and others have raised the issue of fundraising regulations with state treasurers and asked that they be addressed. The result so far has been a tentative in-principle agreement from regulators that any charity registered with the Australian Charities and Not-for-profits Commission will be deemed to be authorised to fundraise. 

Unfortunately this in-principle agreement means nothing much has changed. In the discussion paper released by regulators last month they make it very clear that: “While deemed authorisation based on ACNC registration is the primary goal, individual jurisdictions may retain some flexibility to manage who is authorised to fundraise in the jurisdiction, such as applying additional conditions for deemed authorisation… Regardless of whether a fundraiser holds a deemed authority or a local authority, the obligations under local regulatory regimes could still apply… Furthermore, local regulators would not be restricted from establishing their process and procedures for dealing with deemed authority holders.”

So an ACNC registered charity may be deemed authorised to fundraise across borders, but every jurisdiction can (and most do) impose its own requirements before a charity can actually be authorised! 

It seems if you are registered with the ACNC you are authorised, but you are not authorised unless you have complied with individual jurisdictional requirements which remain quite onerous and time consuming particularly in the case of Queensland, NSW and Western Australia.

The Charities Crisis Cabinet have come up with a better fix. Charities are registered and regulated by the ACNC, and fundraising is also regulated by Australian Consumer Law which prohibits misleading and deceptive conduct. There are also privacy laws, the Telecommunications Code and local by-laws about collections. In practice, no other authority is needed. 

History tells us that these regulations are quite sufficient to pursue the scammers, those who mislead, engage in deceptive conduct or misuse publicly raised money. And that is without the various voluntary codes many charities comply with. 

For those who insist that more is needed (for no apparent reason), the Charities Crisis Cabinet has developed a draft set of regulatory principles. These fundraising principles are primarily directed at states and territories considering repealing their existing mishmash of inconsequential regulations. Remembering that the shared goal here is to ensure ethical and appropriate behaviour by all involved in fundraising, the Charities Crisis Cabinet believe these draft fundraising principles represent a form of model guidelines that could replace all the existing regulations, superseding the no longer fit for purpose regulations individual jurisdictions impose.

Draft Australian Fundraising Principles

As a charity registered with the ACNC, we pledge to take all reasonable steps to ensure our fundraising is lawful, truthful and transparent at all times. To do this, we will adhere to the following fundraising principles of ethical fundraising practice. These principles are designed to provide a national standard of fundraising, when the current confusing, expensive and ineffective state-based system is replaced.
Underpinned by the Australian Consumer Law, Privacy Law and the ACNC, but with states retaining their oversight and enforcement powers, we believe these principles will lead to stronger fundraising and better regulation. These principles are designed to complement existing self-regulatory fundraising codes, and do not require any additional compliance to meet them.

1. When fundraising, we will always try to explain the purpose of our charity, and the purpose to which the funds raised will be applied, where that is reasonably possible.
   
2. We will not mislead or deceive or use false or inaccurate information when fundraising.
3. We will not place undue or unreasonable pressure on a person when fundraising, or act unconscionably in any way to obtain a donation.
4. When fundraising, we will take all reasonable measures to never exploit the trust, lack of knowledge, lack of capacity, apparent need for care and support, or vulnerable circumstances of any donor.
5. We will ensure that our fundraisers are always clearly, and individually, identifiable by the public.
6. We will take responsibility for the standards, practices and conduct of all our fundraising activities, regardless of who conducts them (us, or a third party on our behalf), or how they are delivered.
7. We will apply all reasonable due diligence when engaging third parties to assist, support or deliver fundraising activities on our behalf.
8. When we use paid fundraisers we will tell the public this before they donate.
9. Where we use third parties, we will ensure this information includes the name of the company, and how we pay them.
10. We will ensure that fundraisers employed, or directly engaged by us, only work within the designated hours of operation as permitted by relevant national, state/territory or local laws, or by a properly constituted self-regulatory body if no such laws exist.
11. We will only contact the public to seek support where we have the proper and lawful authority to do so, where this is required.
12. We will ensure personal information we collect, use and manage is done so in accordance with the Australian Privacy Principles.
13. We will take all reasonable measures to protect the health and well-being of fundraisers employed or directly engaged by us, and members of the public, during the course of our fundraising activities.
14. We will operate a complaints process that allows for the proper investigation and redress of fundraising complaints by the public and encourage anyone with any concerns about fundraising activity conducted in our name to contact us.

If every jurisdiction adopted these principles and dispensed with all their existing regulations, it would free up millions of dollars of administrative time in charities across Australia that could be much better directed to serving their communities. It would also increase compliance because obtaining a national fundraising license would become a seamless process with much less red tape, provide better assurances for the public – especially those vulnerable to exploitation, and promote the opportunity to fundraise without fearing regulatory breaches from over-zealous state regulators concerned about font sizes, document provenance, proof of ID, street addresses, police checks, length of handles on collection boxes, and so on. 

Now more than ever, as charities impacted by COVID-19 desperately pivot to online fundraising to try and replace some of the income from their usual face-to-face activities, it is critical that we fix fundraising regulations.  

The combined regulatory power of the ACNC, Australian Consumer Law and a set of Australia-wide principles that every jurisdiction could endorse and adopt, would better regulate charitable fundraising without the current confusing mess of outdated failed regulation.

Charities are hurting. Communities need more assistance. If jurisdictional regulators continue insisting that every Australian charity involved in online fundraising has to comply with all the existing fundraising regulations across every jurisdiction in Australia we will continue to be wasting millions of dollars in pointless compliance activity and actively discourage fundraising. 

Is this what these regulators consider to be their role? Is this the intended purpose of their regulations? Surely it is now time to change, and if not now, when?

If you or your organisation would like to add its voice to the calls to fix fundraising, you can make a submission or even just write a letter of support for the reforms outlined above to charitablereforms@customerservice.nsw.gov.au by the close of business Friday 18 September. Details here.