Submission to the Senate Select Committee on Charity Fundraising in the 21st Century
CCA's submission outlines key areas of opportunity and concern in relation to the Senate Select Committee Inquiry into Charitable Fundraising.
CCA welcomes the opportunity to engage with the Senate Select Committee on this very important issue.
CCA is a member of the fixfundraising coalition, has liaised extensively with Justice Connect and supports their submission. Parts of this submission reflect this convergence.
CCA has also consulted with other members in framing this submission, however, it is important to note that this submission does not override the policy positions outlined in any individual submissions from CCA members.
The content of this submission includes: a brief background to CCA; an overview of the current context for the broader charities and not-for-profit (NFP) sector; seven informing principles for fundraising regulation reform; our shared recommendation; a discussion of key issues relating to the inquiry terms of reference; and a conclusion. Read our full submission here.
Background context: the not-for-profit sector
The NFP sector encompasses over 600,000 organisations - from large to very small - and employs well over one million staff (around 10% of all employees in Australia). Australia’s 54,000 charities collectively turn over more than $130 billion each year and hold over $260 billion in assets. In the last decade, sector growth has continued at more than 7% a year, a figure that is higher than any other industry group.
These facts tell only a small part of the story. The real value of the NFP sector is often in the unmeasured contribution to Australian quality of life. NFPs are at the heart of our communities; building connection, nurturing spiritual and cultural expression, and enhancing the productivity of all Australians. Collectively, they make us a more resilient society.
The importance of the NFP sector is now being internationally recognised with many governments putting in place measures to increase NFP investment and productivity. Smaller government and bigger community is a common theme, driven in part by savings, but also by a commitment to greater civic engagement, social entrepreneurship and productivity within the NFP sector.
The establishment of the Australian Charities and Not-for-profit Commission (ACNC) is the first time the NFP sector has had an independent regulator dedicated to serving their needs and enhancing their capacity. It has proved to be a positive step towards red tape reductions, increased transparency, and trust in the community by prospective volunteers and donors. The national charities register has also provided invaluable information.
While the recent history of the NFP sector is framed by growth and reform, new issues are emerging. The level of volunteering and individual philanthropic giving as a percentage of income has still not recovered to the highs of 2009. At the same time, revenue available to governments is effectively falling in real terms against a backdrop of increasing demands and higher community expectations. Competition for fundraising and services has increased.
Given the size of the sector and its critical role in our community, Government can achieve real economic and social benefits if it chooses to strategically invest in strengthening our communities and our NFPs. There have been numerous reports and recommendations relating to the NFP sector over the last decade, but relatively few have been acted upon.
The inability of governments to streamline their own regulatory processes, their tendering processes, contract management and programs monitoring has consistently been identified as a major barrier to improving productivity in the not-for-profit sector in Australia. The lack of certainty in the government regulatory environment, funding and contracting processes also undermines performance and ongoing investment in improving outcomes. For the sector to be more effective, these issues must be addressed.
Positive change often requires increased collaboration, recognition of shared goals and shared ways of achieving outcomes. Given the size of the NFP sector and its critical role in improving Australian well-being, there is scope to boost productivity by working constructively with the NFP sector in developing more responsive and effective programs and services, seeking to achieve shared goals and outcomes.
Informing principles for fundraising regulation reform
1. Never has it been more critical for charities to diversify their income and build their capacity. For this reason, CCA believes the first principle of any proposed new fundraising regulations should be to encourage and support fundraising activities undertaken by charities.
2. There is no evidence to indicate the Australian public lack trust in charities or are concerned about widespread inappropriate fundraising activities. The goal of any new regulation should not be seen as addressing a market failure, but to promote more charitable giving.
3. The current regulatory system applying to charities engaged in fundraising is broken. Separate jurisdictional fundraising regulatory regimes in Australia is not justifiable, especially given the diminishing relevance of geographical boundaries. Fundraising regulation need to be workable, efficient and fit-for-purpose. Current regulations fail this basic test.
4. CCA is opposed to the establishment of additional regulations and compliance burdens for charities unless there is good evidence that the proposed new regulations will contribute to efficiencies, a reduction in compliance costs, and further increase public trust. The goal in relation to fundraising regulation should be to reduce not increase compliance costs.
5. Fundraising regulations must take account of the existing criminal law, consumer protection laws, common law and others, as well as the role of the Australian Charities and Not-for-profit Commission (ACNC). Duplication of existing laws in fundraising regulation makes no sense.
6. It is the purpose of the charity and ensuring money raised supports achievement of the charitable purpose that matters, not just the nature of the fundraising activity undertaken.
7. The emphasis in any fundraising regulatory framework should be on the actual fundraising behaviour, the way the agency involved has acted. It should not be about compliance, reporting and accurate filling in of forms. This includes ensuring appropriate enforcement options for the very small minority of charities doing the wrong thing.
CCA recommendation (shared with Justice Connect and others)
The Federal Government should actively support and assist with the development of a nationally-consistent, contemporary and fit-for-purpose charitable fundraising regime for implementation no later than mid-2019 by:
1. initiating (or at least supporting) amendments to the Australian Consumer Law to ensure its application to fundraising activities for and on behalf of charities (and other not-for-profit organisations) is clear and broad;
2. urging the repeal of existing fragmented State and Territory fundraising laws; and
3. working with other Australian Consumer Law regulators, the Australian Charities and Not-for-profits Commission, self-regulatory bodies and sector intermediaries to draft and consult publicly on a core mandatory code to be enforced under the Australian Consumer Law multi-regulatory framework.
Earlier this year CCA was one of over 100 charities to sign an open letter to government on the issue of fundraising regulation and reform. In part this letter read:
Australia’s fundraising regulations are a mess. In fact, it is so hard to comply with the current system of compliance that most of Australia’s 55,000 charities do not bother. The charities sector employs over 1.1 million Australians and turns over more than $134 billion annually. The loss in productivity involved for the thousands of charities that seek to meet all the requirements of the seven different fundraising regimes amounts to hundreds of millions of dollars annually.
It is time. The Commonwealth Government and every State and Territory Government can quickly and effectively provide charities and not-for-profit organisations with one nationally consistent and fit-for-purpose fundraising regime. The current Review of the Australian Consumer Law (ACL) is an important opportunity for real reform. The ACL can easily be clarified and amended to ensure charities are required to meet a clear set of consumer-focused expectations and requirements in all their fundraising activities. We do not need seven sets of onerous and unenforceable regulations.
For more than ten years charities and not-for-profits have been asking governments to #fixfundraising. Our feedback has been that this issue is not important enough for governments to bother. Cutting red tape for business is essential. Cutting red tape for charities is not.
We, the charities of Australia, who support and enable so many aspects of our lives including: education; the arts; health; housing; employment; recreation; social services; childcare; emergency services; family support; justice systems; international development; the environment, childcare, religion and spirituality, animal welfare; and many other areas that are crucial to Australia’s productivity and well-being; are asking for your help.
Please, fix this fundraising mess so we can get on with what we do best – building flourishing communities.
CCA hope this latest inquiry into fundraising regulations does more than again highlight the problems. The concerns of charities have been repeatedly dismissed, our issues have been largely ignored, and we continue to waste substantial time, energy and resources complying with a useless set of regulations.
Just as importantly, many charities are concerned that not enough is being done to protect public trust and confidence in charities. We need to ensure that in the very small minority of cases where charities are behaving badly, there are clear sanctions and enforcement. The current fundraising regulations fail to offer the kind of protection of the charities brand that charities have called for.
CCA implore this Senate Committee to finally hear our voices and take action that will benefit our charities and communities long into the future.