Not Waiting for Lightning to Strike Twice

For the Department of the Environment and Energy to grant over $440 million to a small charity that didn’t even prepare an application form or ask for the grant is inconceivable, writes CCA CEO David Crosbie in Pro Bono News, 16 August 2018.

Not Waiting for Lightning to StrikeTwice, Pro Bono News, 16 August

I looked it up. Lighting can strike twice in the same way, even the same place. For a nanosecond I wondered if it could happen to the Community Council for Australia. I am sure I was not alone. Across Australia, many CEOs of small charities paused and contemplated for just one short breath; could hundreds of millions of dollars in government funding suddenly be given directly to us by the prime minister?

As quickly as the thought lit up my brain with possibilities about how much CCA could achieve, it was gone. But it left a small scar, a burn, a mark of unfairness.

It is hard to know where to start in any discussion around the granting of over $440 million to the Great Barrier Reef Foundation. It is such a huge amount of money, to be paid up front, to a small organisation that has made no submission.

It is important to be very clear. The government has the right, the responsibility, to allocate money as it sees fit. The collection and allocation of government revenue is the primary task of any government. It is what the electorate votes governments in to do, what most public servants are employed to oversee, and it is what forms the basis of any serious analysis of government performance. If the prime minister and environment minister choose to give hundreds of millions in a grant, they can. There is no legal or other restriction. Provided an appropriation bill allocating the money has been approved through Parliament, there is no limit on government directed funding of charities or any other group. It is their call to make.

It is also important to commend the policy goal of the grant. The Great Barrier Reef is an international treasure. Any serious well-informed effort to preserve the reef should be applauded – whether or not we think more could and should be done in relation to climate change and other related issues.

The unfairness, the sense of grievance for me and many of my colleagues is grounded in two core issues. The first is the process that informed the decision to make such an unprecedented grant of money from the Department of the Environment and Energy. The second cause of concern is the way the government has sought to defend the grant process through misleading obfuscation.

One of the most common complaints I hear from charities is the difficulty they experience working with government departments that are overly process driven, seeking more and more information, more compliance, more details about the organisation, more stipulations about expenditure, the activities permitted, even the employment contracts that can be used. The Productivity Commission has highlighted creeping micro-management of charities by government departments as one of the major issues impacting negatively on productivity in the charities and not-for-profit sector.

This creeping micro management is compounded by an increasing level of competition for government funding, not just between charities but also from business, all competing for government funding of various services, programs and activities.

Charities seeking larger contracts often spend thousands of dollars and many hours of staff time preparing tenders and proposals that are often not successful. I know of two organisations that have spent over $350,000 on unsuccessful tender proposals in the last 12 months.

The Department of the Environment and Energy (DEE) is no exception to this trend of increasing demands for charities seeking to access government funding. If I wanted to apply for a $10,000 grant under their Grants to Environment, Sustainability and Heritage Organisations (which operated in 2013/14 but is no longer funded) I would have to first read the 30-page set of guidelines, then fill in a nine-page application form with over 1,000 words required, and provide six additional documents including details of current activities, quotes for capital items, conflict of interest policies, etc.

For most charities, this kind of onerous application process for relatively small sums of government money is just the way government does business with charities. It is not unusual, it is not overly useful, but charities are told that if they want to access government funding they need to comply with these necessary processes.

For the Department of the Environment and Energy to grant over $440 million to a small charity that didn’t even prepare an application form or ask for the grant is inconceivable! It is totally inconsistent with any grant process from this department or any other department or even the behaviour of any individual philanthropist – none would be silly enough to grant such a large amount to such a small organisation. It is not just unprecedented, it is ludicrous.

What compounded the feeling that this grant was unfair to all Australian charities was the lame attempts to defend it.

There was a suggestion that if the Expenditure Review Committee had approved it, the grant had satisfied some form of due diligence. The ERC approves over $400 billion of payments including social security payments, health, education and defence spending. To suggest approval from the ERC equates to a due diligence process is a little like saying the ERC approved all pensions being paid in Australia so they have all satisfied a due diligence test.

It was explained that this was a decision of Cabinet and Parliament, the implication being that this sufficed for due diligence. Approval of government appropriation bills is almost guaranteed through Parliament and should never be considered as equivalent to reviewing or endorsing all expenditure.

The environment minister suggested this grant was not unusual. It is not just unusual, it is extraordinary.

Both the prime minister and the environment minister suggested no tender process was needed because the charity receiving the money was uniquely qualified to meet the requirements of the grant. Given no-one spoke to the organisation prior to the grant being made, how could this determination have been made? Where is the comparison with other more substantial organisations working to preserve the reef, the justification for this undocumented assumption? Is it because the prime minister knows people on the board, that his wife is a patron, that the fossil fuel industry is involved? Maybe, maybe not – no explanation is available.

It is one thing to use the privilege of government to make a large grant to an organisation you like. It is another to defend this unilateral decision by claiming a process has been followed. This dismissal of concerns from the prime minister and the environment minister make a mockery of all the resource intensive processes charities suffer in seeking to gain any amount of funding from governments.

Like most charity leaders, I do not live in hope of another lightning strike, no millions of dollars of government funding being showered on our organisations without us asking for anything. We all just quietly shake our heads, roll our eyes, keep filling in forms and preparing detailed proposals, and move on, knowing we cannot expect fairness in our dealings with government.