Victoria Takes a Lead in Fundraising Reform

In the coming months Australia’s charity sector has an opportunity to take a huge step forward in fundraising regulation reform, with Victoria leading the way, writes CCA CEO, David Crosbie in Pro Bono News.

Victoria Takes a Lead in Fundraising Reform, Pro Bono News, 16 March 2017

On Wednesday Victoria took a major step forward in supporting the #fixfundraising campaign. A court decision and an agenda-setting speech from a minister in the Victorian government have boosted the case for reform.

Most readers of Pro Bono News know that fundraising regulations in Australia are a classic example of ineffective regulation, duplication and red tape.The existing regime is grounded in an outmoded hangover of federalism requiring charities to comply with seven separate sets of administrative requirements. Perhaps just as importantly, fundraising regulations are rarely enforced and most of Australia’s 50,000-plus charities do not comply with all the requirements, even if they are engaged in fundraising.

For more than two decades charities have been seeking to make the system workable. Academics like Professor Myles McGregor Lowndes, not-for-profit law specialists and even the Productivity Commission have all pushed for reform.

Over the next month or so, the charity sector has an opportunity to take a huge step forward in fundraising regulation reform. The current review of Australian consumer law (ACL) is an important doorway to harmonisation. 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 ineffective regulations.

CCA understands that the main barrier to achieving reform is not a lack of a policy solution or even state reluctance to let go of their regulatory role, the problem appears to be that key ministers and policy makers could not be bothered because it is not considered a significant issue.

It seems that while cutting red tape for business is essential, cutting red tape for charities is not.

When the Victorian Federal Court handed down a judgement on the fraudster Belle Gibson in a case brought by the Victorian Commissioner for Consumer Affairs, the decision highlighted how the existing consumer law can be applied to someone misleading people by saying they are providing money to a charitable purpose when they are not. This is an important judgement because it clearly demonstrates that the consumer law can be an effective way of addressing inappropriate fundraising practices. Breaching Victorian fundraising regulations was not at issue. Breaching consumer law was.

What made this action and decision in Victoria even more significant was the statement made by the Victorian Minister for Consumer Affairs Marlene Kairouz at an invitation only meeting of consumer affairs ministers and policy makers on the same day.

In part of her speech, she said: “The review of the Australian consumer law concludes next month when consumer affairs officials present their final report to all consumer affairs ministers for consideration.

“The review has drawn on a range of sources to build its evidence base and I know that many of you present today have contributed your knowledge and experience, whether that be in survey responses, face-to-face interviews, or formal submissions. Thank you for your input.

I’m also aware that among the issues you have championed is that of nationally consistent fundraising regulation – to both improve the clarity of the ACL’s application and to reduce regulatory burden.

“Research undertaken for the Australian Charities and Not-for-profits Commission in 2016 showed that state and territory regulation of charities (including fundraising regulation) imposed costs to registered charities of over $15 million per year.

“This is money wasted and just one reason why I support your calls to overhaul this aspect of the ACL. While I would hope that my colleagues in other jurisdictions are of a similar mind, the reality is that evolution for some looks akin to revolution for others and achieving a consistent view will be a challenge.

“Nonetheless, I will continue to advocate for national reform while taking appropriate action to remove red tape for charities and not for profits operating in Victoria.

“Legislation currently in the Parliament will enable me to exempt an incorporated association or a class of associations from annual financial reporting requirements where they are also registered with and reporting to another regulator.”

Clearly Victoria gets it. We know some other jurisdictions are now on the same page. But we still have quite a way to go to achieve the goal of harmonised fundraising grounded in the appropriate application of Australian consumer law combined with the registration role of the Australian

Charities and Not-for-profits Commission. The federal government is yet to offer support and at least two jurisdictions have adopted the “why bother” policy position.

CCA is a member of the #fixfundraising campaign and will be part of proposed activities over the coming months.

If we do not campaign and campaign hard on these issues, they will yet again slip off the policy agenda, and we in the charities sector will be left wringing our hands wondering why our concerns are not being taken seriously.

Well done Victoria and Minister Kairouz, for listening to the charities sector and responding.

I look forward to a vigorous campaign over the coming months to ensure the federal government and other jurisdictions get on board. I hope you will join us.