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‘Death taxes’ would breathe new life into charities

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Published in The Community Advocate: ‘Death taxes’ would breathe new life into charities

‘Death taxes’ would breathe new life into charities

Despite the political risk, it may be time for Australia to bite the bullet and introduce an inheritance tax, writes Community Council for Australia CEO David Crosbie.

The Productivity Commission Inquiry into Philanthropy is due to release its draft report at 10.30pm on Thursday, November 30.

Its brief was to “analyse motivations for philanthropic giving in Australia and identify opportunities to grow it further”.

There have been many roundtables and consultations on a broad range of issues affecting philanthropy in Australia, and 275 submissions have been made to the inquiry.

Once the report is released the Productivity Commission will embark on another series of consultations and calls for submissions.

This first draft will be an important report, both for the Productivity Commission and for the government.

The word in the sector is that the government is prepared to back real change to promote giving in Australia.

It will be some months before we know whether the Productivity Commission can make a strong enough case for change, and whether a first-term Albanese government has the political will to implement the changes needed.

Figures from the Australian Taxation Office (ATO) and the Australian Charities and Not-for-profits Commission (ACNC) suggest that charities currently receive less than $15 billion in donations and bequests each year.

This is well under 10% of charities’ collective total annual revenue of $176 billion.

Revenue from government is around $90 billion – over 50% of all charitable income. About a third of annual income for charities in Australia comes from income earned through provision of services and activities.

Donations are a relatively small part of the charity pie, but they are important because often they provide vesting capital, flexibility, and funding for innovation and improvement.

The income pattern of Australian charities differs from that of other countries.

In the US, for instance, the annual income of charities from donations and invested bequests is twice as big as annual income from governments.

There are many reasons for these differences, but one major factor is that Australia abolished inheritance taxes more than 40 years ago and has been paying the price ever since.

Researchers from the Urban-Brookings Tax Policy Center in the US found that if the US abolished death duties, levels of bequests would fall by about a third (between 22% and 37%) and lifetime giving would be reduced by a similar amount:

“We find evidence that the incentives for charitable giving present in state and federal estate and inheritance taxes have a strong effect on charitable bequests.”

“An inheritance taxes is one of those evidence-based positive policies that would benefit most Australians and strengthen our communities, but it would also work exceptionally well in a misinformation scare campaign.”

Most wealthy families in Australia lag a long way behind those in countries like the US when it comes to giving to charities, and the lack of inheritance taxes is a key factor.

Once Queensland Premier Joh Bjelke-Petersen abolished death duties in 1978, every other state and territory had to either follow suit or accept that it would face an exodus of its cashed-up seniors to Queensland.

A great deal has been written in Australia on inheritance taxes or what the Henry Tax Review termed a “bequest tax”. A 2019 Treasury Paper by Frank Stilwell provides a good summary.

The Community Council for Australia has consistently supported some form of inheritance tax for more than a decade. It makes a lot of sense at many levels.

The Henry Review argued that a tax on estates would “fit well with Australia’s demographic circumstances in the coming decades. Over the next 20 years the proportion of all household wealth held by older Australians is projected to increase substantially and large asset accumulations will then be passed on to a relatively small number of recipients.”

Mike Truman, the then editor of the UK journal Taxation, argued: “the problem with inheritance tax is that we’re not paying enough of it… For all its faults in practice, it is in principle a perfect tax. … the tax liability comes at a point where those who did have the money no longer need it, and those who are about to get the money have managed quite well so far without it. Except in a very few cases, there is no problem with liquidating assets in order to get the funds to pay the tax.”

Supporters of inheritance taxes include Elon Musk and Warren Buffett, who have both conceded that it isn’t fair to offer very significant economic advantages for a limited number of people based on how wealthy their parents are.

Inheritance taxes would raise increasingly high levels of government revenue, even if we only taxed those with income above $10 million.

A limited and targeted tax would reduce inequality, only be collected when people are no longer alive, have no negative impact on productivity, encourage giving while people are still alive, and bring Australia into line with most other OECD countries.

Of course, even though an inheritance tax would be beneficial and a boost to giving in Australia, the Productivity Commission is unlikely to recommend it in its upcoming report. Governments are reluctant to even discuss the possibility of any form of estate duties or inheritance taxes.

The last time I talked to an assistant treasurer about an inheritance tax, it was suggested that perhaps I might run for parliament with the introduction of an inheritance tax as my key policy promise and see how many votes I get.

An inheritance taxes is one of those evidence-based positive policies that would benefit most Australians and strengthen our communities, but it would also work exceptionally well in a misinformation scare campaign.

Make up your own lines – the government reaching into your coffin, robbing you of everything you’ve saved for your family throughout your life of hard work, just so politicians and their mates can keep their piggy snouts in the publicly funded trough of taxpayer funded entitlement.

Some might argue this is why we need minority government; major political parties are unlikely to ever support any policy that allows them to be depicted as some form of taxation vampire sucking money away from the recently deceased and their grieving families.

It will be interesting to see what path the Productivity Commission chooses to tread.

Will it go with the evidence and argue for some form of inheritance tax to boost giving and reduce inequality, or will it take a safe political path and suggest that an inheritance tax can’t be seriously recommended because it might prove unpopular?

A new Productivity Commissioner, an important new report into philanthropy, a lot of eyes watching. I somehow doubt evidence will win the day over popularism, but we can hope.

Is the starvation cycle here to stay?

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Published in The Community Advocate: Is the starvation cycle here to stay?

Is the starvation cycle here to stay?

Cutting back on organisational infrastructure and capacity to ensure there is enough funding for programs to remain viable – a phenomenon known as the starvation cycle – is an unfortunate reality for most charities and not-for-profits, writes David Crosbie.

I have run charities that depended on fundraising and philanthropy to maintain good-quality programs and services.

The discretionary fundraising revenue was used to fill the gap between what was provided by government and other funders, and what it actually took to fulfill the contracted programs and services.

On more than one occasion, I was told that it was this “top up” capacity that made our submissions and tenders more compelling for potential funders.

In some cases, the charity was successful in gaining government contracts and services only because our fundraising enabled us to accept low paying government contracts and make them work.

This approach to government contracting was often framed as being about saving the government money and delivering increased value for taxpayers (ministers like this idea). It was also about having a significant competitive edge against other charities seeking the same funding.

The Social Ventures Australia report Paying What It Takes makes the following important points about the way charities and not-for-profits tend to manage their finances:

  • Many charities operate with thin or no margin and did so even before the covid crisis
  • Many charities operate with limited reserves.

Australian charities and not-for-profits are not alone. These financial norms in our sector are also norms for many not-for-profits around the world.

Researchers in the US examined the finances of more than 4,100 not-for-profit organisations across a period of 30 years, analysing and testing some common nongovernment financial norms including levels of overhead costs, reserves, sources of funding, and expenditure on fundraising activities.

This was their finding:

“The norms we studied are of the less-is-better variety… Examples of these norms include getting revenue from many different sources, avoiding debt and scrimping on expenses like information technology and office space that are known as overhead costs.

“We found that charities that don’t embrace these common financial norms end up spending about 53% more money to advance their missions over a 10-year period than other charities.

“Another research team assessed the wisdom of a rule of thumb that charities should maintain as little as three months’ worth of financial reserves. They found no evidence supporting it. To the contrary, they found that having so little cash on hand could endanger many organizations.”

These findings are not surprising to any of us working in the sector.

If a charity or not-for-profit has no discretionary income, and limited reserves, it’s going to be difficult to thrive as an organisation, to invest in innovation, in better evaluation, documentation, marketing and promotion, recruitment and staff development, climate adaptation and energy transition, technology and cybersecurity, all of which can be vital to improving programs and delivering greater benefit to the communities being served.

“Charities and not-for-profits should not have to rely on fundraising to make government contracts workable.”

Some have argued that the reason charities and not-for-profits have cut back on expenditure in these vital areas is to satisfy the demands of funders who are reluctant to pay for what is often termed administrative expenditure or overheads. This may be true.

My experience is that most charities and not-for-profits cut back their overhead expenditure because they are committed to their purpose, to the communities they serve, to the programs and activities they provide.

If it is a choice between cutting an IT staff member and diminishing organisational IT capacity, or losing an employee involved in direct program delivery, who is most likely to be leaving the organisation?

Regardless of the reason, the reality is that many charities and NFPs operate permanently in what is sometimes called the starvation cycle – continually cutting back on organisational infrastructure and capacity to ensure there is enough funding for programs to remain viable.

The Paying What It Takes report found that anything less than 29% expenditure on what is commonly called overheads is probably unrealistic and may even damage the organisation:

“The average indirect costs of the not-for-profits analysed was 33% of the total costs, with significant variation between 26% and 47%. This is comparable to the minimum of 29% indirect cost funding found in a US study of 130,000 charities.

“By contrast, funding agreements often only included indirect costs of between 10% and 20% of overall costs. A significant proportion of not-for-profits stated that they underreported their indirect costs to funders due to a pervasive belief that funders are unwilling to fund more than 20% of indirect costs.”

There are far too many variables in charity and NFP performance, impact and effectiveness for simple generalisations and measures relating to overhead expenditure or capital reserves to provide genuine insight or understanding of organisational performance. There really are no set rules.

What we do know is that all too often it is a false economy to cut back on organisational capacity.

It’s not unrealistic in 2023 to expect that most charities and not-for-profits employing staff should, as a minimum, be able to provide well managed data security, evaluation and program improvement, staff training and development, dignified surroundings in appropriate locations, and accurate and timely monitoring of activity and performance.

Charities and not-for-profits should not have to rely on fundraising to make government contracts workable.

And yet, as competition for fundraising and government contracts increases, and costs of living bite into charities and not-for-profits in so many ways, the doing-more-for-less demands seem to be increasing.

The unfortunate reality is that many charities and not-for-profits have little choice if they want to continue offering their programs and services.

For as long as governments and other funders are not prepared to pay the full cost of providing quality programs and services, charities and not-for-profits will have to either rely on obtaining other sources of income to make under-resourced funding agreements workable or cut back in essential areas of organisational capacity.

The starvation cycle is alive and well in Australia, and unless there is a genuine commitment to change, it will be staying with us for some time.

CCA Submission to the Department of Social Security – A stronger more diverse and independent community sector

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CCA Submission to the Department of Social Security - A stronger more diverse and independent community sector

Thank you for the opportunity to provide a submission in response to the issues paper: A stronger more diverse and independent community sector.

It is difficult to know how to respond to such a paper without suggesting that the knowledge about what is needed to strengthen community sector organisations and improve the way the Department of Social Services engages with the sector has already been clearly communicated for over a decade, and repeatedly ignored.

There is little or no contention, for instance, that the length of social service contracts requiring the employment of staff should not be less than three years, or that notice periods to end contracts should be at least six months.  There is also little contention that such readily accepted fundamentals are regularly ignored by the Department of Social Services.

More than a decade ago the Productivity Commission unambiguously laid out some of the reforms needed to boost community sector productivity through more effective and efficient contracting of non-government organisations in this report: Contribution of the Not for Profit Sector – Commissioned study – Productivity Commission (pc.gov.au)  CCA and our members support the recommendations of this report, at least ten of which relate to the way governments engage with and contract community organisations.  This report should be the reference point for any action.

In terms of paying what it takes to provide contracted services, this is another good starting point: Paying what it takes Report, Social Ventures Australia and the Centre for Social Impact

Eight years ago CCA provided a submission in relation to the way the Department of Social Services contracts NGOs.

A copy of this submission is attached (see: https://communitycouncil.com.au/wp-content/uploads/2023/01/CCA-DSS-Grants-Sub-0315.pdf). All of the recommendations in this submission remain current and CCA would like this submission to form the basis of our response to the latest issues paper.

The recommendations in this 2015 submission are:

Summary of Recommendations 

  1. Australian governments should urgently review and streamline their tendering, contracting, reporting and acquittal requirements in the provision of services to reduce compliance costs.  This should seek to ensure that the compliance burden associated with these requirements is proportionate to the funding provided and risk involved.  Further, to reduce the current need to verify the provider’s corporate or financial health on multiple occasions, even within the same agency, reviews should include consideration of:
    • development of Master Agreements that are fit-for-purpose, at least at a whole-of-agency level
    • use of pre-qualifying panels of service providers.

(Recommendation 12.7 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

  1. The Department of Finance and Deregulation should develop a common set of core principles to underpin all government service agreements and contracts in the human services area. This should be done in consultation with relevant government departments and agencies and service providers.

(Recommendation 12.8 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

  1. All government tendering processes should actively involve those being contracted to provide services and those who will benefit from the services in the design and implementation of programs.
  1. All government tendering processes should have a publicly stated policy goal, and a measurable indicator of success. 
  1. Funding decisions need to be supported by a clear and transparent account of the criteria used to assess applicants, the process by which these criteria were applied, the information used to inform decision making, and the rationale for final decisions. 
  1. Expertise in the area of service provision being contracted should be included in all decision-making panels. 
  1. When entering into service agreements and contracts for the delivery of services, government agencies should develop an explicit risk management framework in consultation with providers through the use of appropriately trained staff.  This should include:
    • allocating risk to the party best able to bear the risk,
    • establishing agreed protocols for managing risk over the life of the contract.

(Recommendation 12.6 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

  1. All government contracts seeking to achieve a social purpose should have at least a 5% allocation to support the collection and reporting of appropriate performance measures.
  1. Contracts with not-for-profits to provide community services should be for at least three years and no program should lose funding with less than six months’ notice.
  1. Establish a closed independent feedback loop to enable NFPs a confidential solutions focused avenue in provision of feedback on government relationships with the sector.

 

As already noted, the questions about what needs to be done to strengthen the community services sector through better contracting arrangements have been repeatedly discussed and generally agreed by the sector, and by key inquiries and reports over more than a decade.  No doubt most of these recommendations will again be reported by the Department of Social Services in summarising this current process.

The most important question that now needs to be answered is whether the Department of Social Services has any real intention or commitment to implement any of the changes required?

Thank you for considering this submission.

David Crosbie

CEO, Community Council for Australia

More decoration or meaningful reform?

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Published in The Community Advocate: More decoration or meaningful reform?

More decoration or meaningful reform?

When it comes to government forging a stronger community sector, the time for asking questions is over. It’s action that is now required, writes Community Council for Australia CEO, David Crosbie.

“As part of the Australian Government’s election commitment for a stronger, more diverse and independent community sector, the Department of Social Services is exploring opportunities to better support Australian communities through the design and administration of grants to the sector, including more meaningful working partnerships and options for greater innovation. A stronger, more diverse, and independent community sector.” – Department of Social Services.

The Department of Social Services (DSS) is a big spending department with a turnover in excess of $140 billion.

Any area of government where expenditure is this high will always be targeted for cost savings measures, and so it is with the DSS.

The department has been in our news feeds continuously over recent months, and not in a good way.

Robodebt exposed the willingness of senior staff to bend and break rules to please political masters through illegal actions aimed at finding billions of dollars in savings. That the Robodebt scheme persevered for so long despite being so wrong at so many levels will stand as a permanent indictment on DSS practice.

There are many good people who work in DSS, but ultimately the department is a line agency rather than a cross portfolio leader like Treasury or Finance.

The capacity of DSS to influence the way government behaves, outside of DSS itself is, at best, minimal.

DSS also has a long history of mis-managing various grant programs.

This became evident in the 2015 Senate Community Affairs References Committee inquiry into ‘The impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services.’

The final report of that committee recommended 12 reforms including a suggested five year minimum length of contract where possible.

Over the past 12 months, DSS has been working with the Community Sector Advisory Group (CSAG) to develop an issues paper titled: A stronger more diverse and independent community sector. The consultation on this document has just closed this week.

Any attempt to improve practices at DSS should be encouraged.

Within the discussion paper DSS acknowledge they have already been told what would improve their engagement and contracting with the broader community sector.

Issues such as ‘pay what it takes’ or meeting the real costs of service provision in DSS contracts, offering longer term contracts, and different kinds of contracting arrangements including lead agencies, are all identified in the issues paper.

The problem with the issues paper is not so much the content (although this could be improved by referencing previous reports) or that it represents DSS seeking feedback from the sector.

What the issues paper highlights is that DSS have been told what needs to be done and can talk about doing things better, but they are making no commitment to change any of their current practices.

All the issues DSS highlights have been consulted on many times before, and been the subject of numerous reports and recommendations, the vast majority of which DSS has repeatedly ignored.

There is little or no contention, for instance, that the length of DSS contracts with community organisations requiring the employment of staff should not be less than three years and preferably five, and that notice periods to end contracts should be at least six months.

“What the issues paper highlights is that DSS have been told what needs to be done and can talk about doing things better, but they are making no commitment to change any of their current practices.”

There is also little contention that such readily accepted fundamentals are not regularly factored into grant program development in the Department of Social Services. Many agencies face rolling 12, 18 or 24 month contract terms.

More than a decade ago the Productivity Commission clearly laid out some of the reforms needed to boost community sector productivity through more effective and efficient contracting of non-government organisations in this Productivity Commission report. More than a decade later, most of these recommendations have not been implemented.

In terms of governments actually meeting the real costs of service delivery, CCA and many other organisations were involved in supporting this report: Paying what it takes.

Eight years ago, CCA provided a submission to the Senate Committee reviewing the way the Department of Social Services contracts NGOs.

The ten CCA recommendations in our 2015 submission covered exactly what most readers would expect – including this recommendation: “Contracts with not-for-profits to provide community services should be for at least three years and no program should lose funding with less than six months’ notice.”

The DSS Issues Paper asks more than 25 questions about the way DSS could or should engage with the community services sector.

We already know from all the research and consultations, all the inquiries and reports into government contracting of charities and community groups, that DSS could significantly improve the way it engages and contracts community service organisations, if it wanted to.

The question CCA asked in our submission in response to the Issues Paper was, does DSS have any intention to change anything or implement any of the many existing recommendations about how it could engage and contract community organisations better?

If not, this latest DSS consultation is yet another exercise in decorative government, another ride on the merry-go-round of consultations and reports, circling back to words everyone can agree to, no change, no action.

It’s time to call it out – Australia is not an egalitarian society

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Published in The Community Advocate: It’s time to call it out – Australia is not an egalitarian society​

It's time to call it out - Australia is not an egalitarian society

Australia is an amazing country, but we have a lot of work to do if our claims to be an egalitarian society are to be advanced beyond magical thinking writes Community Council for Australia CEO David Crosbie.

‘’As an egalitarian society, Australia and Australians believe that all people are equal and deserve equal rights and opportunities. We value and respect freedom of dignity, religion and respect the rule of law. Fair go: Australians believe in the right to a “fair go” regardless of a person’s background.’’

Those words are from an Immigration South Australia flyer that aims to educate new migrants about Australian workplace culture.

Many Australians have access to quality housing, health care, education and employment options. Many of us can afford to spend discretionary income on entertainment, travel, exercise, food and even art. We take an active role in our democracy.

But that is not the complete story of Australia.

Nowhere in our constitution does it say all Australians are equal.

The word egalitarianism is not mentioned. There is no Australian Bill of Rights empowering us all to equally claim our freedoms.

Those of us who have worked in the corrections system know freedom and justice in Australia often has a price tag.

When we talk about Australia being the place of the fair go, an egalitarian place where we all have a chance to succeed, we downplay both the advantages of wealth and the disadvantages of poverty.

Australia is a wealthy nation, but our wealth is not distributed equally.

According to the latest analysis in Forbes magazine, Australia’s median per capita wealth of $386,973 is the second highest in the world behind Belgium.

Australia sits 20th – near the middle of the OECD pack – when it comes to how fairly we distribute our income, according to OECD data.

The top 20% of Australians control over 40% of the wealth. The bottom 20% have only around 5%. Income distribution figures reveal the top 20% of Australians earn six times as much income per week as the bottom 20%.

These figures do not convey what it means to be rich or poor in Australia.

The Australian tax system favours those who invest over those who work for a living. In practice this means our capacity to make money depends partly on whether we already have access to money.

Not only are poorer Australians more likely to stay poor, they will also live shorter lives.

There is a “dramatic difference in preventable deaths between the top and bottom 20% of income earners, with poorer Australians living up to 6.4 fewer years than the wealthiest Australians. And the gap appears to be widening,” reported Australia’s Health Tracker by Socioeconomic Status (Mitchell Institute and Victoria University) in 2021.

Poorer Australians are more likely to be affected negatively by economic shocks and climate change.

Having suitable housing, being able to afford an electric vehicle or rooftop solar, and paying for expensive insurance cover are all measures wealthier people can put in place to reduce the costs or direct effects of climate change.

Most of these options are beyond the reach of those in the bottom 20% of income earners.

Cost-of-living increases disproportionately affect the bottom 20% of income earners. They spend much more of their income on necessary food, energy, transport and housing.

Despite our wealth, Australia has the second highest incarceration rate among Western democracies at 172 per 100,000 – behind only the US.

The relationship between incarceration and poverty goes both ways – poor people are more likely to end up in prison, and ending up in prison exacerbates poverty. Australians are champions at putting people in prisons.

‘If Australia is to become a more productive and egalitarian country, we will need to spend more and spend smarter to bridge the inequality gaps we have created across many of our communities.”

So, why does all this matter?

The jingoistic nationalism about what a wonderful country Australia is, and how lucky we all are to live here, is true for many.

That doesn’t mean we should happily paper over the crevices in our communities, the inequalities, the obstacles we continue to place in the path of those from the wrong postcodes, or even worse, the wrong race.

“It is etched on the collective psyche of Aboriginal and Torres Strait Islander people today that social and economic exclusion was arbitrarily enforced upon us,” found the 2004 Senate Community Affairs References Committee in its report A Hand up Not a Hand Out: Renewing the fight against poverty.

‘’The ramifications of this exclusion has set the platform for the tragic circumstances experienced by [Indigenous] people in Australia.

‘’Indigenous Australians remain the most disadvantaged and marginalised group in Australia. On all the standard indicators of poverty and disadvantage, Indigenous people emerge as the most socially and economically deprived.’’

One of the most powerful lies at the heart of the No campaign against the Voice referendum was the idea that Indigenous Australians already have a fair go in our country. They do not.

That despite being 14 times more likely to be in prison (the Indigenous incarceration rate is 2,223 per 100,000) their chances of success are no different from those of non-Indigenous Australians. This is not true.

Indigenous babies are twice as likely to die before they reach five years of age, according to the Australian Institute of Health and Welfare, and an Indigenous adult can expect to die 10 years before a non-Indigenous Australian.

Not every Indigenous person lives in poverty, and not everyone who lives in poverty in Australia is Indigenous. But to pretend there is not a level of discrimination built into the institutions of our society, our housing, our healthcare, our schools, our justice system, is to lie.

If Australia is to become a more productive and egalitarian country, we will need to spend more and spend smarter to bridge the inequality gaps we have created across many of our communities.

This will only happen if we listen to the voices of those most marginalised, including Indigenous Australians, to create hope and opportunity.

The post-referendum call to address the social and economic exclusion of so many Indigenous and non-Indigenous Australians signals a clear role for Australian charities.

Australia is an amazing country, but we have a lot of work to do if our claims to be an egalitarian society are to be advanced beyond magical thinking.

Education and truth – the keys to change?

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Published in The Community Advocate: Education and truth – the keys to change?

Education and truth – the keys to change?

The overwhelming rejection of the Yes campaign to give Indigenous Australians a Voice to Parliament highlights some troubling gaps in the nation’s collective education and understanding of history, writes Community Council for Australia CEO David Crosbie.

Following are the collective insights and views of a group of Aboriginal and Torres Strait Islander leaders, community members and organisations who supported Yes:

“It is evident that many Australians are unaware of our cultures, our histories, or the racism imbued in the Australian Constitution. That so many Australian people believe there is no race or division on race in the current Australian Constitution speaks to the need for better education on Australian history and better civics education.

“We have faith that the upswelling of support through this Referendum has ignited a fire for many to walk with us on our journey towards justice. Our truths have been silenced for too long.” (Source: Statement for our People and Country).

The Voice referendum was very revealing.

It has generated some insightful analysis and very gracious statements, particularly from Indigenous Australians who have every right to feel aggrieved – yet again.

Like many of my friends and colleagues, I feel ashamed.

Indigenous Australians asked to have a say in policies that affect them through a change to our Constitution. We said no.

In many cases we said no out of ignorance, out of not knowing. This should not be glossed over or dismissed.

Surveys conducted by RedBridge Group Australia and Accent Research found that “47% of voters surveyed do not think First Nations peoples face more discrimination than “white” Australians, with a quarter saying that it is in fact white people who face more discrimination. Of these, 80% voted No.”

Ignorance of the facts is not the only reason non-Indigenous Australians voted No in such numbers, but it does highlight one of the main lessons we learned from referendum voting patterns.

Australia needs to invest more in our education systems if we are to create the kind of Australia we want to live in. Levels of educational attainment cannot explain everything about the attitudes and knowledge of non-Indigenous Australians, but there is no doubt that education plays a significant role.

The more educated an electorate, the more likely it was to vote Yes in support of a Voice for Indigenous Australians.

“It seems far too many Australians are ignorant of the truth. We can, and should, do something about that.”

Several years ago, CCA was part of the push to have education promoted across our communities in the Origin Foundation–backed campaign “It takes a village. Education is everyone’s business”.

The rationale behind this message was that too many of our kids were missing out on completing school.

The impact of early school leaving is generally far reaching across multiple domains including health, wellbeing, access to housing and employment.

While many early school leavers have great lives and achieve great things, we also know that the longer our kids stay in school, particularly our Indigenous kids, the more likely they are to avoid social and economic disadvantages.

We know, for instance, that the best way to reduce HIV/AIDS infections in Indigenous communities is to increase education levels.

We can all play a role in promoting education within our own families and communities, and well beyond. That role can be as small as asking what a student is studying and encouraging them to continue learning.

As part of community organisations, we can also back campaigns and initiatives that seek to promote higher levels of educational attainment, particularly across more disadvantaged communities.

Right now, in Australia, public schools educate two thirds of all Australian students – including 80% of children from families of low socio-economic advantage, more than 80% of Aboriginal and Torres Strait Islander children, more than two thirds of children with disability, and more than 67% of students whose families speak a language other than English at home.

The future funding models for public schools are being decided by governments over the coming months as they finalise bilateral school funding agreements for the 2024–28 period.

Another campaign has been launched to boost education funding – For Every Child. The initiative seeks to achieve full education funding for every child across Australia and to ensure schools can achieve the schooling resource standard that all governments adopted a decade ago. Less than 2% of public schools have reached that funding standard.

CCA has long been committed to supporting greater equality of access to educational opportunities. This was one of the key priorities in our “Australia we want” work almost a decade ago.

There is a lot to do in this area and all of us can play a role as individuals and within our own organisations by supporting these kinds of campaigns to address educational inequality across our country.

Perhaps boosting education and building greater awareness of the true history of Australia is just one of the small steps we can take as we continue our journey to a more informed set of attitudes and decision making with, instead of for, Indigenous Australians.

Thomas Mayo argued this week that “the truth should be unifying, not divisive”.

It seems far too many Australians are ignorant of the truth. We can, and should, do something about that.

Endless inquiries taking us for a ride

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Published in The Community Advocate: Endless inquiries taking us for a ride

Endless inquiries taking us for a ride

It’s time to stop the inaction merry-go-round of government consultations, inquiries and reports and get to work, writes Community Council for Australia CEO David Crosbie.

One of the strategies used extensively by Australian governments to avoid making any serious commitment to a particular issue is to establish an inquiry, a consultation, a panel, or an advisory group to prepare a report and make recommendations.

The federal Parliament alone currently lists over 100 inquiries.

Australia is excellent at conducting inquiries.

Australia also excels at developing all kinds of plans.

A good example is the most recently developed National Plan to End Violence Against Women and Children 2022–2032.

By most standards, it is an excellent plan – a comprehensive 10-year vision across multiple domains informed by extensive research, collaboration and consultation.

But a first-rate plan doesn’t necessarily change things.

We have similar plans for many aspects of our lives and our communities, including industry-specific plans, health system plans, education plans, poverty plans, environmental plans, disease-specific plans, plans for population groups, including Indigenous peoples.

In fact, having a plan for everything has become so popular for governments that it has become an end in itself.

It is an accepted way for governments to be seen to be doing something about an area or an issue, even if all they are really doing is agreeing to put a set of words onto paper.

All this work conducting inquiries and reviews, framing recommendations and developing plans takes a lot of time and effort. And every now and then these processes are useful – they work to get more resources into an area or to have the resources better used to achieve better outcomes.

Unfortunately, outcome-focused plans driving new investment and change are not the norm.

More often than not, the consultation and planning to address an issue of concern is almost like a parallel process to the real-world experiences of the issue, a parallel process that can serve to block rather than facilitate action.

While we are busy having input into consultations and inquiries, reviewing the proposed recommendations and outcomes, then contributing to the development of some kind of plan, we are probably not engaged as much in our core business of addressing the issue.

Perhaps just as importantly, it becomes difficult to advocate for more investment and action because we are already part of government processes having input into future policies and plans.

Engaging charities and not-for-profits in an endless process of consultation and planning provides government with cover. But it can be difficult to say no because we all want to work with government to address the areas of concern.

Refusing to participate can also mean organisations might miss out on opportunities for funding or other government support and engagement.

So, how do we decide whether we should play or not play in these processes?

What kinds of factors determine whether the process is going to be useful and deliver outcomes, or a waste of your time and expertise?

“Maybe if a few more of us said no to pointless processes, the inaction merry-go-round of consultations, inquiries and reports might slow down enough to review the work already done?”

I tend to focus on four key factors.

Of course, there are others that may be just as important or relevant, depending on the kind of work or issue you are engaged in.

You may also have specific reasons to participate or engage. But if you are going to offer your input, usually with no compensation to you or your organisation, it needs to be a good use of your valuable resources.

First, I want to know if those involved in the policy development have any commitment to real change, and real investment. Producing a beautiful document is fine, but not if it leads to no change.

Second, I need to know whether there has been any review of what has already been tried in this area, plans and recommendations that may have already been developed, and whether we really need to revisit those plans rather than embark on a new process.

My third area of focus is authenticity, which to me means genuine engagement, partly measured by prolonged engagement and positive supportive relationships.

There are many policy bandwagons that people readily jump on and off. I prefer to know that people have been actively engaged in an area for some time, and are committed to working as partners and taking as long as it needs.

Finally, I need to know there is a commitment to ruling some activities out.

Having a plan that encompasses every possible activity in a certain area is not a plan, it’s just a set of words everyone can agree to. A good plan is strategic, supporting only a limited number of effective actions.

Unfortunately, the most common form of a national strategic plan is framed to validate everything that is currently occurring, to ensure everyone agrees, and that everything can go on as normal despite there being a new national plan.

Across the charities and NFP sector there is a high level of engagement in government consultation and planning.

In many instances, this contribution isn’t valued beyond a government official being able to tick a box. Even if we are listened to, even if we already know what needs to be done to make a real difference, there is often no commitment to increased investment or change.

We have had comprehensive reviews of our sector involving thousands of submissions, extensive consultations, and countless hours of input and deliberations, generating millions of words in government reports.

As emeritus professor Myles McGregor-Lowndes points out in his revealing analysis of six government reports into the sector:

“In these reports alone, I counted over 160 recommendations, with 21 implemented, 113 unimplemented, and 33 partial or no longer applicable implementations.

“There is even one notable recommendation about recommendations from the 2010 Productivity Commission that ‘over the last 14 years, there have been five major reviews of the NFP sector, yet many worthwhile recommendations remain unimplemented.’”

I note that the leader of the Opposition, in his first address to Australia following the referendum outcome, talked about his commitment to the safety of Indigenous children.

He said he would hold a Royal Commission into Child Abuse in Indigenous Communities.

I doubt he has read the National Plan to End Violence Against Women and Children 2022–2032, let alone the specific section on developing an Aboriginal and Torres Strait Islander action plan grounded in the Closing the Gap Target 13:

“By 2031, the rate of all forms of family violence and abuse against Aboriginal and Torres Strait Islander women and children is reduced at least by 50%, as progress towards zero.”

Herein lies the heart of the problem.

Even when thousands of hours of consultation, research and considered work have been provided by informed and knowledgeable people, including those with extensive lived experience, we often ignore this work and reinvent another process to develop another set of words for us to ignore all over again.

It is, in many ways, an ignorant approach to policy development, and we seem to have perfected it in Australia.

Maybe if a few more of us said no to pointless processes, the inaction merry-go-round of consultations, inquiries and reports might slow down enough to review the work already done?

Why do we keep playing these games with governments?

Restoring trust is a must after divisive Voice debate

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Published in The Community Advocate: Restoring trust is a must after divisive Voice debate

Restoring trust is a must after divisive Voice debate

Charities and not-for-profits can play an important role in healing the fractures in society, says Community Council for Australia CEO David Crosbie.

Almost ten years ago when Community Council for Australia (CCA) chair Tim Costello addressed the National Press Club to release a new report on our sector, he said,

“The trust deficit is more important than the budget deficit – rebuilding broken ties in the fabric of our communities is a very expensive and time-consuming exercise.”

So, who is going to pay the bill to repair trust in Australia after the Voice referendum?

The Voice referendum stems from an invitation from Aboriginal and Torres Strait Islander peoples to walk more closely together in working towards a better future for all of us.

It is hard to see why anyone would oppose such a positive proposal. It poses no threat, no risk, offers no unfair advantage, but requires only that we listen to the voices of Indigenous people in relation to policies impacting their communities.

It’s hard to accept that politicians who know the true nature of the consultative process behind the formulation of the Voice referendum proposal would publicly lie about where the Voice proposal comes from and what it represents.

But lie they have – even calling the Voice “the Albanese Voice” – a total misrepresentation of the over 100 community consultations and 4000 submissions that informed the Voice proposal.

The leaders of the No campaign have muddied the waters so they can claim it is unclear or too deep.

They act like they know better what will address entrenched Indigenous disadvantage and discrimination, but they offer nothing.

They claim that Indigenous people are already in some way advantaged through additional funding, that colonisation has delivered only benefits to Indigenous people, and that the largest ever consensus of Indigenous people is all wrong about what they and their communities need.

The cost is not just division, but a sense of uncertainty and even fear. Who to believe when media commentators, politicians and would-be prime ministers knowingly promote lies and misinformation?

A fellow dog park regular recently told me that he didn’t believe the majority of Indigenous people supported the Voice, or that the Uluru statement from the Heart was one page.

There are reports this week of No campaigners handing out pens to mark the ballot paper at pre-polling stations because they believe Australian Electoral Commission (AEC) staff may rub out pencil votes and change No votes to Yes votes.

Who do we trust if we don’t trust the AEC? The 2023 Edelman Trust Barometer concluded that in Australia no institution is trusted.

Yet trust is probably the most important commodity that charities trade in. So much so that those of us who helped frame the establishment of the charities regulator – the Australian

Charities and Not-for-profits Commission (ACNC) – ensured that promoting trust was the first of its three core objectives: maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector.

“Charities and NFPs can tell the stories and demonstrate how remarkable Australians can be in connecting with and supporting each other.”

Regardless of the outcome of the Voice referendum this weekend, the events of the past month have now clearly set us all a challenge, the challenge alluded to by CCA chair Tim Costello ten years ago – to rebuild the broken fabric of ties in our communities.

The good news is that this is what charities and community groups do well, bringing people together around shared values, facilitating connections between people, building hope and possibilities in the lives of individuals, families and communities.

If charities and NFPs are the glue that hold communities together in good times and bad, now may well be the time to focus on that work and highlight how we can make a real difference in helping rebuild trust across many different parts of our communities.

Much of this work will be business as usual by charities and NFPs, but some may choose to make a special effort over the coming months given the damage done by divisive hyper partisan political campaigning.

Our economy, our wellbeing, our democracy, our capacity to achieve positive outcomes are all grounded in a level of trust between people, trust that some have deliberately undermined through self-serving campaigns promoting uncertainty, fear and resentment.

Charities and NFPs can tell the stories of and demonstrate how remarkable Australians can be in connecting with and supporting each other.

There are few things in life or in our nation more valuable than rebuilding trust and the capacity for collective action to strengthen our communities.

Perhaps now is a good time to share more of our stories?

Working for purpose deserves its own reward

News

Published in The Community Advocate: Working for purpose deserves its own reward

Working for purpose deserves its own reward

In an increasingly competitive employment environment, the charity and not-for-profit sector is crying out for a workforce strategy, writes Community Council for Australia CEO David Crosbie.

Staff skills, recruitment and retention is an area of concern that has been regularly raised with the Community Council for Australia (CCA) by charity CEOs over recent months.

Of course, charities and not-for-profits (NFPs) are not alone: a national skills shortage is already affecting productivity in Australia across the business and government sectors.

It is not unusual that staffing is one of the issues keeping CEOs awake at night, and nor is it new.

For as long as I can remember, the fact that charities and NFPs couldn’t afford to match what governments or business could pay staff has been a concern. But now the workforce challenges appear to be even more demanding.

Cost-of-living pressures seem to have pushed the remuneration side of salary packaging to the fore for many charity workers. Housing, transport, energy, and other living costs have become more expensive in recent years.

It is not surprising that many employees are seeking greater income to deal with their changing financial circumstances.

The ATO has ruled that employees of most charities and eligible NFPs can salary package up to $15,900 of their salary annually in approved household expenses, such as rent, mortgage, credit card payments and school fees.

In practice this means each year employees of eligible charities and NFPs can spend $15,900 of their salary tax-free.

This salary sacrificing used to be a major advantage for charities and NFPs.

I can well remember as a CEO in the late 1990s and early 2000s presenting salary packaging options to potential staff.

Often it was not until the figures were laid out in front of the potential recruit that they realised how much better off they would be with our remuneration package than with the slightly higher salaries offered by competing government agencies or for-profit organisations.

In 2003, average weekly earnings were approximately $920. Charities and NFPs could offer a salary sacrifice that was around one third of the average weekly salary ($15,900 or $306 a week) – in other words, one third of an employee’s salary could be tax free.

Average weekly earnings are now approximately $1840, yet charities and NFPs can still only offer the same amount in salary sacrifice – $15,900.

In practice, this means the charity employee on the average weekly income can salary sacrifice only one sixth of their income. It is still a significant benefit, but much less so than 20 years ago.

The same applies to meals and entertainment allowances for eligible charity and NFP employees, which have been capped at $2650 per annum. They offer a benefit, but a benefit that has reduced in real terms over time.

A lack of any indexing means the value of the salary sacrifice concessions to charities and NFPs has effectively been diminished over the last 20 years.

Another employee benefit that has diminished in value over recent years is flexibility.

As a charity CEO I could offer more flexibility to employees than would usually be provided by most businesses or government organisations.

For employees wanting to study, spend time with family, or care for someone, charities and NFPs could often accommodate their needs better than other workplaces.

Following the covid pandemic, when so many employees had to work from home, flexibility is no longer unusual in most workplaces. Companies are now more likely to go out of their way to meet staff needs as part of their recruitment approach across many more workplaces.

One area where charities and NFPs tend to lag other workplaces is in the provision of training opportunities.

This is not surprising, as most charities and NFPs operate on narrow margins and lack the kind of resources required to engage in leadership development and workforce capacity building at the same scale as government agencies and many businesses.

Allowances for staff training are rarely factored into contracting and other service agreements with charities. Professional development is rightly one of the indirect costs highlighted in the ‘pay what it takes’ argument.

Another important factor for many charities and NFPs is the loss of volunteers in recent years. At a time of increased competition to attract qualified staff, it’s also become more difficult to recruit and retain volunteers.

Despite all these challenges, many charities and NFPs have developed strong employee value propositions by listening to their staff and developing programs and support that are responsive and beneficial to both employees and the organisation.

Working in our sector can bring wonderful rewards beyond the individual remuneration package in terms of a sense of value and purpose in our lives.

Many of us enjoy our work not because it is fun or easy, but because we are a part of making a difference, part of driving positive change in the world. And that alone can mean charities and NFPs become employers of choice.

In a highly competitive employment market, and at a time when many charities will have to significantly increase their workforce over the next ten years to meet growing demand, there appears to be no considered investment in the workforce that charities and NFPs require in the short term, let alone in five or ten years.

Where is the workforce strategy for our sector?

A good starting point for a strategic workforce plan might be to acknowledge that some of the benefits of working in the charities and NFP sector have been significantly eroded over time.

If governments, funders, and the broader community are not prepared to invest more in our sector’s workforce capacity, the quality and accessibility of critical services across all our communities will diminish.

And that’s a scenario we should all be concerned about.

Published in the Community Advocate: https://communitydirectors.com.au/articles/working-for-purpose-deserves-its-own-reward

 

Time to bridge the gap between climate concern and climate action

News

Published in The Community Advocate: Time to bridge the gap between climate concern and climate action

Time to bridge the gap between climate concern and climate action

Charities and not-for-profits have been at the heart of community resilience for decades. Putting them at the centre of action to combat climate change should be no different, writes Community Council for Australia CEO David Crosbie.

Climate change is the biggest issue of our time.

It is already having a massive impact on many charities and not-for-profits (NFPs), and we are only at the beginning.

It is now unusual for any serious discussion about our future to occur without climate change being a major consideration.

Survey findings released last month showed that 88% of UK charities were concerned about the impacts of climate change, and 94% said the charities sector has an obligation to address it.

And yet, just half of the charities surveyed said climate change was currently a priority for their organisation.

The gap between the level of concern about climate change and the level of positive action to address it revealed in the UK survey would almost certainly be replicated in Australia.

The gap between concern and action in our organisations reflects the pressure charities are already under, as well as their lack of capacity to take on more priorities.

Change from within

We know charities and NFPs can take a range of actions to begin addressing climate change within their own organisations – and leading organisations are already well ahead in some of these areas.

The Institute of Community Directors Australia and Our Community have produced a really useful and practical guide designed for NFPs – Going Green: Putting policies and procedures into practice.

Any number of environmental and other groups are undertaking advocacy work that charities and NFPs can support, including the ACOSS Community Sector Climate Change Declaration.

At the Community Council for Australia (CCA), we believe climate change is too important for our sector to rely on environmental charities to carry the load of driving positive change.

We are working with a range of partners on the proposal for Australia to jointly host COP31, the peak United Nations climate change conference, in 2026 with our Pacific neighbours.

To this end, CCA is part of the COP31 Collaboration Group which seeks to: connect people, planet, peace and prosperity into narratives, actions and advocacy that sees COP31 deliver for communities, for the planet, for the future, by influencing and enhancing:

  • Public discourse
  • Individual and community engagement and empowerment
  • Government policy, action and ambition
  • Business and investment decisions
  • COP31 global ambition

Time for the sector to step up

The broader charities and community sector have often been treated as an extra on the set, a small part player in Australia’s response to climate change.

“The gap between concern about climate change and action to make it a priority in our organisations reflects the pressure charities are already under, as well as a lack of capacity to take on more priorities.”

Discussions about climate change have been dominated by governments, business, energy providers, financiers, local councils, and industry groups seeking adaptation support. 

When charities and NFPs are at the table, their role is often limited, not only by a lack of understanding, but also by a lack of investment in the sector to build the much-needed capacity for active engagement.  

These discussions should move beyond what charities need to do themselves to reduce the impact of climate change and focus more on the incredible value that charities and NFPs can bring to all aspects of responding to climate change.

Charities and NFPs have a critical role to play in Australian and global approaches to prevention, adaptation, resilience, disaster management, recovery, policy development and financing.

Community connection comes first

Everything we know about how well communities cope in disasters or times of difficulty reinforces the fundamental importance of social infrastructure, the connections between people that enable us to act collectively and support each other.

Charities and NFPs have been at the heart of community resilience for decades.

The pandemic reinforced the lesson that when our actions are driven primarily by self-interest, they can have a harmful impact on our lives and our communities.

When we act for our collective benefit, it can deliver stronger more resilient communities.

Looking beyond our own country to our neighbours and the broader globe is another area where Australian charities are active, but they could be playing a greater role.

This is one of the reasons CCA is actively supporting the COP31 bid.

From a CCA perspective, there is little point to Australia jointly hosting a COP31 with our Pacific neighbours if the event is going to be not much more than a fancy ticketed trade fair for business, while governments play politics in the back room and issue decorative statements about intent.

COP31 in Australia needs to be about connecting to communities, to all of us, to all our organisations, to our Pacific neighbours and their communities, enabling us all to move beyond concern to actions that will make a difference in our communities and for our planet.

We already know what the issues are. Time to act.

Just one more thing before I go

The Impact X Base Camp on November 1 in Sydney will be a critical climate change forum. There is a minimal charge of $50 (plus GST and booking fee) to attend. If you are interested in bridging the gap between concern about climate change and positive action, we’ll see you there.

David Crosbie has been CEO of the Community Council for Australia for the past decade and has spent more than a quarter of a century leading significant not-for-profit organisations, including the Mental Health Council of Australia, the Alcohol and other Drugs Council of Australia, and Odyssey House Victoria.

More information

Community Directors Intelligence: The Green Edition
Research report: Greening the Not-for-profit sector
Not-for-profit Net-Zero Heroes