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Investing in charities: economic stimulus spending on steroids

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Investing in charities: economic stimulus spending on steroids

The Australian Taxation Office has confirmed that 320,000 charity workers are receiving JobKeeper. When it ends, charities will need a higher level of investment if Australia is to achieve the post-pandemic economic recovery we are all hoping for, writes CCA CEO David Crosbie in Pro Bono News, 10 September 2020.

 

Investing in charities:  economic stimulus spending on steroids, Pro Bono News, 10 September 2020

Governments, donors and investors often fail to recognise that money spent supporting charities is contributing not just to providing a public good, but also directly supporting the economy. In many ways, investing in charities is the best form of stimulus spending; it creates employment, opens up new opportunities for people, and allows individuals, families and communities to realise their potential.   

Modelling undertaken by Social Ventures Australia (SVA) and the Centre for Social Impact (CSI) in their important report published in June this year – Will Australian charities be COVID-19 casualties or partners in recovery? A financial health check – suggested more than 200,000 charity jobs could be under threat over the coming 18 months or so. It seems their modelling was on the money.

This week we have had confirmation from the Australian Taxation Office that 320,000 charity workers are receiving JobKeeper, around 9 per cent of all JobKeeper recipients. This is extremely high when you consider that higher education – a major employer in the charities sector – is largely excluded from JobKeeper. 

The ATO has also reported that around 12,000 charities are using JobKeeper. Again, this is very high when we consider that almost 50 per cent of charities have no employees, less than 20,000 charities employ more than five full time staff, and most charitable employment is in education and aged care, neither of which are likely to be high users of JobKeeper.

What happens when JobKeeper ends? The calls from the charities sector for a graduated withdrawal of JobKeeper are now critical, especially to the 320,000 charity workers currently relying on the program to continue their employment. As SVA and CSI have already highlighted, we will need further special measures for the charities sector if we are to keep charities that employ staff viable and able to serve their communities post the pandemic.

What is perhaps even more concerning is that beyond the charities sector, many more people across many communities will need assistance, support and connection to others once government support programs like JobKeeper and JobSeeker are wound back. 

One of the few positive aspects about the current situation is that most people facing difficulties know they are not alone, that others are also struggling, that it is not just about them. This sense of sharing the burden is critical to the mental health of many. When people feel isolated and personalise their struggles and failings, the mental health impacts are much more severe than when they can see and talk to others in similar situations and share their experiences. Engagement and connection will be critical to many Australians over the coming months and years.

The negative aspect of so many people sharing their struggles is that the sheer number of people needing support is going to be overwhelming for many charities seeking to offer services. It will be critical that governments recognise the emerging needs of those now facing major disruption, dislocation, loss of income, health and security. 

We know that not adequately meeting the needs of people on the margins of our communities post the pandemic will prove much more costly to all our social systems and our economy in the longer term. Not enabling charities to provide the needed support would significantly weaken our communities and our economy.

Perhaps one of the best practical ways of demonstrating the positive social and economic impact of investing in charities can be seen in a novel new fundraising approach launched this week.

The Royal Australian Mint has produced millions of “Donation Dollar” coins that are now in circulation. The Donation Dollar is the world’s first legal tender coin that features a call to action: a call for the holder to give. Over the coming years a total of 25 million coins will be minted and circulated – one for every Australian. The Donation Dollar is an initiative of Saatchi and Saatchi who consulted with several charity leaders in developing the concept, and the Royal Australian Mint who have embraced the idea and made it their own. 

Surveys conducted by Saatchi and Saatchi prior to the launch indicate that over 50 per cent of people will donate the coin if they receive it in their change. This is just one of the good things about this coin and what it represents. Most Donation Dollars will not only be donated to a charity, the charity will then use that dollar, spend it on salaries and services, so the coin will again end up back in circulation, to be donated and spent again.

If each coin is donated only once a month, it will amount to over $300 million in donations each year.

On the back of the Donation Dollar coin there are a series of concentric circles partly covered in a kind of green paint. Over time, this green is designed to wear off making the ridged circles beneath more prominent. For me, this is one of the most important and clever aspects of this coin. The circles on the coin are like ripples in a pond when a stone is dropped, they represent the waves of public good flowing outward, more and more impact over time.

The coins will circulate for decades, the good multiplying as they are donated and spent.

I cannot think of a better metaphor for the real impact of charities, both in terms of the economy and the community.

As Australia enters its first recession since the early 90s with a 7 per cent contraction in the economy, the charities sector is emerging as critical in not only addressing the fallout of COVID-19, but also supporting economic recovery post the pandemic. 

We now know that as JobKeeper ends, charities will need a higher level of investment if Australia is to achieve the post pandemic economic recovery we are all hoping for.

Read on Pro Bono News: probonoaustralia.com.au/news/2020/09/investing-in-charities-economic-stimulus-spending-on-steroids/

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Media Release: 25 million new opportunities to inspire generosity

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Media Release: 25 million new opportunities to inspire generosity

The Community Council for Australia is calling on Australians to get behind an innovative new initiative launched today by the Australian Mint that has the potential to deliver millions of dollars in additional funding to charities and community organisations each year. 

A new one dollar coin, called a Donation Dollar, has been minted and is entering circulation.  The Donation Dollar is legal tender and the world’s first coin that features a call to action: a call for the holder to give.  Over the coming years 25 million coins will be minted and circulated – one of for every Australian.  The Donation Dollar is an initiative of Saatchi and Saatchi who have consulted with several charities in developing the concept, and the Australian Mint who have embraced the idea and made it their own.  

David Crosbie, CEO of CCA said “If every Australian donated just one Donation Dollar a month, together the charities sector would receive an additional $300 million in donations every single year. That’s an additional $300 million to support the most vulnerable people in society and to support the organisations that help our communities to flourish.”

“Charities in Australia employ over 1.3million people and contribute over 8% of GDP – when we support our charities we are strengthening our communities and our economy.  The ongoing circulation of Donation Dollars will help to continuously remind people about the value and importance of the charities sector in Australia.  It will remind us that a dollar spent by charities circulates within our economies, generating jobs and economic activity as well as positive community benefits.  This is really a win win for the community.” 

Australia is a generous country, and with millions of Donation Dollars soon to be in circulation there will be so many opportunities for Australians to think actively about the causes they care about and how they can contribute by donating, volunteering or supporting in other ways. 

Charities leader and CCA Chair Tim Costello said; “Every one of these coins is a chance to spark new conversations about generosity.  It might be a small coin, but it will circulate as a constant reminder to give, and that can make a big difference.  We are hoping people will ask questions like. who are you giving your donation dollar to, which charities do you already support, is it time to give a little more?”

He said; “Every coin that was passed on would relay a message to inspire generosity and raise vital cash for the nation’s charities large and small, and the 600,000 not-for-profits.”

More on Donation Dollar from the Royal Australian Mint

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Money talks

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Money talks

Charities can be key drivers of social and economic recovery across Australia – and should make their case in the federal budget process writes CCA CEO David Crosbie as he shares ten recommendations from the Charities Crisis Cabinet that could make a big difference as we rebuild our communities and boost our economy.

 

Money talks, Pro Bono News, 20 August 2020

A federal budget is the single most important policy document any Australian government produces. Unlike the usual government policy statements, announcements, declarations of support, and agreements to address issues, the federal budget tells voters exactly who the government will or will not be supporting. Money may not be everything, but when it comes to government commitments, the federal budget translates into “show me the money”. 

Pre-budget submissions close in five days, and I know many charities are finalising their submissions in the hope that they may be able to influence where the government chooses to invest tax-payer funds over the coming years. I would encourage all charities to make a submission, even if it is just a letter supporting several measures they would like to see implemented. It may be that what is being asked for in a submission is unlikely to be delivered by the government, but that should not stop charities presenting the best case they can in support of their budget recommendations. Making submissions to the pre-budget process should not be limited to business and industry groups. If charities want a seat at the big national policy tables, they also need to take the opportunities afforded them by government to provide their views.

It is within this context that the Charities Crisis Cabinet is currently finalising a pre-budget submission. There are 10 key recommendations within the submission. Some charities have already chosen to include these recommendations in their own submissions. All these measures would offer significant benefit to charities and the communities they serve across Australia.

  1. Provide a ramp rather than a cliff as JobKeeper ends.

Charities employ over 1.3 million staff and contribute more than 8 per cent of GDP. The Australian government has provided invaluable support through JobKeeper to thousands of charities and their staff across Australia. JobKeeper is likely to have already saved over 100,000 charity jobs. Providing a transition phase for charities receiving JobKeeper payments so they can better adapt to post COVID-19 requirements will enable more charities to survive and serve their communities.

  1. Encourage more giving by providing increased tax deductibility for donations to charities.

Increased community engagement and philanthropic contributions to charities produce a net benefit to governments as well as to the communities charities serve. Providing one off incentives for philanthropy and social investment is not unusual in some countries and provides an important stimulus to giving at a time when fundraising revenue is likely to be diminishing.

  1. Make it feasible for charities to establish fundraising initiatives quickly and efficiently by removing dysfunctional red tape fundraising regulations and creating a national registration process through existing regulators the Australian Charities and Not-for-profit Commission (ACNC) and the Australian Competition and Consumer Commission (ACCC).

Governments across Australia have established a dysfunctional time-consuming dog’s breakfast of state and territory regulations to effectively stymie even the smallest charity seeking to run an online fundraising campaign. Now, as many charities are forced to pivot to online fundraising, it is critical that the government fix this major barrier to Australian charitable fundraising.

  1. Subject to strong performance, ensure greater certainty in government contracts by locking in existing payments and extending contracts wherever possible.

One of the greatest barriers to investment in improved productivity and effectiveness across the charities sector is lack of certainty. Many government departments – including at a federal level – have been willing during COVID-19 to provide greater certainty to charities that receive government funding by extending funding and support. The practice of extending existing contracts for longer periods – preferably at least three years – is to be commended and broadened. 

  1. Allow greater flexibility in government funding to charities and not for profits to respond to the emerging needs in their communities.

During COVID-19 and beyond, it is in everyone’s interests to offer much greater flexibility in applying the terms and performance requirements of Australian government contracts with charities. This flexibility should include acknowledgement that COVID-19 has increased the demand for many services provided by charities and government resources need to reflect that increased demand.

  1. Invest in a one-stop shop registration process to enable volunteers to be registered and insured more quickly without the red tape of multi-jurisdictional compliance.

ANU and Volunteering Australia research indicates two thirds of all volunteers have reduced their volunteering behaviour because of COVID-19. There are many barriers to returning volunteers and new volunteers including the need for new insurances and COVID-19 specific responses such as infection control training. This is compounded by the need for police checks and working with children clearances often across multiple jurisdictions. Now it is more important than ever that these barriers are minimised by streamlining the registration, background checks and insurance requirements. 

  1. Support initiatives to unlock new sources of capital for charities including underwriting medium-term loans schemes and impact investment options that will enable charities to smooth out inconsistent income streams and invest in their future.

Philanthropy Australia and Impact Investing Australia have both proposed innovative ways to boost the capital available to charities across Australia with minimal investment from the Australian government. These proposals include a medium-term low interest loan scheme with first loss risk underwritten by philanthropists, and the creation of an impact investment fund. Both are strongly supported.

  1. Provide transformational funding to charities in critical areas such as information technology, energy efficiency, collaboration, measurement of impact, research, staff development and other productivity focused areas.

There is a need for a government-backed transformation fund to enable charities to adapt to post COVID-19 requirements in the ways they operate and serve their communities. Part of this measure is to support more timely and informative research into exactly where the charities sector is in terms of responding to COVID-19 and the challenges of continuing to serve communities when needs are changing and new ways of meeting those needs have to be developed and applied.

  1. Provide targeted funding and support for those struggling to fully participate in our communities and our economy, including ensuring people receiving JobSeeker are not locked into poverty.

The Charities Crisis Cabinet supports maintaining a high rate of JobSeeker payments and a more needs-based approach in the provision of support to marginalised communities including the unemployed, refugees and international students. 

  1. Increase philanthropy by enabling employers to establish more effective “opt out” systems of workplace giving. 

Workplace giving programs in Australia are currently operating in less than 4 per cent of Australian workplaces. If this could increase to 10 per cent of Australian workplaces by adopting the well-established “opt out” processes applied in some other countries, it would generate at least $250 million in additional donations to charities.

Charities have an opportunity to make their voice heard in this upcoming federal budget process. 

Over the next 12 months and beyond, charities and not for profits want to be part of the solution, part of rebuilding our communities and boosting our economy. 

The measures proposed in this pre-budget submission go some way towards realising the significant potential of charities to be a key driver of social and economic recovery across Australia.

 

Read on Pro Bono News: money-talks

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Charities Crisis Cabinet – Open Letter to the Prime Minister

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Charities Crisis Cabinet - Open Letter to the Prime Minister

Charities Crisis Cabinet Co-Chairs, Rev Tim Costello AO and Susan Pascoe AM have written to our Prime Minister asking that the critical role played by charities and our capacity to make a difference, both economically and in terms of wellbeing, be considered and incorporated into your government’s national policy development and agenda setting.

View letter here.

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Beyond the profits of doom

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Beyond the profits of doom

The narrative we should be promoting is that charities are leaders of change, building a better Australia across all our communities. We know the problems, and we have the solutions, writes CCA CEO David Crosbie in Pro Bono News, 6 August 2020.

Beyond the profits of doom, Pro Bono News, 6 August 2020

Charities can profit by accentuating problems, talking about how bad things are and why more resources are needed to ameliorate the damage. At the same time, the most important role of charities is as leading change agents promoting positive outcomes. Balancing these two narratives has never been more important for the charities sector than it is now.  

Over the past few months CCA and others have successfully made the case that many charities are at imminent risk of shrinking their services, even closing, as a consequence of COVID-19 restrictions and lockdowns. This week Social Ventures Australia and the Centre for Social Impact released another important and timely report – Taken for Granted – highlighting the vulnerability of the charities sector and possible job losses running into the hundreds of thousands. This ongoing research and advocacy for the charities sector by CCA and other key groups has been successful, informing changes in government policies that have enabled thousands of jobs to be saved across the Australian charities sector.

There is no doubt about the value of this work, but there is also a danger associated with this form of advocacy. We need to be careful not to push the “poor charities” narrative too far. Charities are already perceived by many as being unprofessional and inefficient. Charities could fuel that perception by adopting the “powerless victim of circumstances” position and that could be damaging in the long run. Charities have pressing needs, and these must be highlighted, but we also need to keep exercising care in the process of making that case to ensure we do not diminish our role or demean the value of our work. Charities must be seen as capable of driving change or we risk sinking down the priority list for governments and communities looking for positive solutions to COVID-19 issues.  

At their best, charities change the world, making it a better, safer, more connected and sustainable place for all of us. In Australia we have already seen the critical role played by charities in responding to COVID-19. The role of charities post COVID-19 will be no less important and has the potential to shape the kind of communities we all live in. 

Prior to COVID-19, there were many issues in Australia that needed more attention: climate change, growing inequality, inadequate support for the marginalised and unemployed, health and other systems including education increasingly orientated to who can pay the most, growing suicide rates, growing incarceration rates, blockages to services for the mentally unwell and many with chronic health conditions, aged care and disability needing more reform, a regional/urban and racial divide in both opportunity and outcomes, inadequate public and low cost housing, underfunding of critical areas including the arts and international development, the ongoing indefinite detention of refugees, and many others.

In recent months, COVID-19 has served to further highlight many of these problems. 

In all these areas, charities were taking a lead, offering hope, solutions that would strengthen the communities they serve. When you consider how progress is made on these issues, the critical role of charities now and moving forward is that they are both the drivers of change to make our country better, and a persistent social conscience calling out self-interest and greed. 

In 2016 CCA brought over 60 leaders from across the charities sector together to talk about the kind of Australia they wanted to live in. The Australia We Want set targets for the kind of Australia we all hoped to live in including: lower CO2 emissions and higher use of renewables, lower incarceration rates, a more equal distribution of income, high perceptions of public safety especially for women, lower suicide rates, higher educational attainment, better employment access especially for women, improved access to housing, levels of giving and volunteering increasing, growing international development assistance, increased transparency in decision-making across all levels of government. 

To achieve targets in all these areas, governments, business and communities need to positively engage with charities and work together to demonstrate how change can be achieved.

Australia now is a different place than it was in 2016. Charities are facing a whole new set of challenges. But the goal of a better Australia remains central to our work. 

The innovation across the charities sector in the last six months to ensure their communities have been adequately supported has very clearly demonstrated the value of many charities and their leadership. Time and again charities have shown real innovation and drawn on new collaborations to continue to pursue their purpose.

What has impressed me even more during the pandemic is how many charity leaders have been looking beyond the survival of their own individual organisation, many becoming part of collective movements working to better serve our communities, especially those doing it tough. This collective leadership on broader social and environmental issues will end up counting much more than how many staff are employed in each agency. 

We should all be strong advocates for charities and there is much work to do in that space. But charities at their best are not just at the table seeking a fair share of the meal, we also want to be in the kitchen developing the recipes to ensure justice and fairness are at the heart of our shared communities.

Charities need to play a much more prominent role in national policy formation, not because we have needs, but because we have solutions. 

The kind of Australia we live in will be up to us. While ensuring charities can continue to serve their communities is a priority, the bigger issue is whether the Australia of the future will be a better place. And that is where charities can and must play a critical role.

Read on Pro Bono News:  beyond-the-profits-of-doom

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Media Release: Please – cut the ‘tawny’ tape strangling our charities!

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Media Release: Please - cut the ‘tawny’ tape strangling our charities!

Charities across Australia are frustrated with governments not acting to remove out of date regulations and duplication preventing registered charities being able to legitimately fundraise on-line.

According to David Crosbie, CEO of the CCA, “Now more than ever, we need to enable charities to pivot to on-line fundraising, but multiple levels of government bureaucracy is strangling charities by making them satisfy seven different sets of regulations requiring at least six weeks of pointless compliance work.

Business call for red tape to be cut – governments respond, farmers and miners call for green tape to be cut – governments respond.  No-one seems as interested in cutting the multiple levels of duplication and administration layered across charities, even though charities employ 1.3 million Australians (10% of the workforce) and generate 8% of GDP.  Charities must need their own colour tape – tawny brown is a mixture of red and green – maybe that will that work?”

All registered Australian charities engaged in on-line fundraising are legally required to satisfy every government in Australia.  State and Territory government regulations demand completely different documentation.  Examples of the compliance activity required for charities to fundraise on line include; advertising any intended fundraising campaign in a QLD newspaper, stipulating the amount to be raised in WA, providing auditor and bank account details, providing the names and addresses of all Board Directors and their signatures, providing a police check for some staff and Board Directors, certified proof of ID for staff and Board Directors, detailing how and when money raised will be spent, etc. etc.  

For over a decade many reports and inquiries have highlighted the problems.  Governments have agreed current fundraising regulations need to change.  Their solutions require all the State / Territory bureaucracies to let go of their individual compliance requirements. They will not let go, so little progress has been made. 

Mr Crosbie said; “Governments talk about how charities should seek to reduce administrative costs and overheads, but when it comes to freeing up charities to do their work, governments jump on and off the merry-go-round of endless inaction. The current fundraising regulations are a classic example of feral bureaucracy costing thousands of hours of charitable staff time in wasted compliance activity.  

There is an easy fix if all governments agreed to work with the information already collected by the Australian Charities and Not-for-profit Commission rather than duplicating and collecting their own. 

It is important to note that all registered charities in Australia are overseen by the Australian Charities and Not-for-profit Commission (ACNC) who have significant powers to investigate any complaint by anyone against any registered charity.  The consumer watchdog, the Australian Competition and Consumer Commission also has the power to investigate and act against any charity engaged in misleading or deceptive conduct. 

Mr Crosbie said; “At this rate we will have humans on Mars before fundraising regulations are streamlined!”

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Data drives change

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Data drives change

Good data is imperative to making the case for charities. Without input from charities, we will not have the data we need.  CCA CEO David Crosbie writes for Pro Bono News on the need for data now and into the future.

 

Data drives change, Pro Bono News, 23 July 2020

“Data inspires progress and galvanizes change. To know where we need to go, we need to know what we’ve achieved – where progress is being made and where major challenges remain.” – Maura Pally, executive director, Clinton Foundation.

To say data is important to organisations is a little like saying a steering wheel is important to a car. Without good data, we are all at risk of heading in the wrong direction, running off the road, doing more damage than good. A lack of data can lead to organisations rewarding failure and ignoring success. Surveys published in business and management magazines around the globe underscore the fundamental importance of data in organisations large and small to inform their decision making and strategy. 

Data also plays a critical role in advocacy and policy making. 

One of the reasons CCA and many others argued so strongly in support of establishing the Australian Charities and Not-for-profit Commission (ACNC) was that a regulator collecting annual information from Australia’s 55,000+ charities would be able to provide invaluable information about the scope and nature of the charities sector. The information generated through the ACNC has proved its worth on many occasions, most recently in advocacy related to the federal government COVID-19 response.

When CCA was first advocating for charities to be included in government COVID-19 support packages, we drew on our membership to provide more than a dozen real life case studies of the impact of COVID-19 on charities. While these case studies were welcomed, some in government described the case studies as soft data, lacking the strength to inform major national policy decisions. We were able to back up the case studies with collective data about charities from the ACNC including data about how many people were employed in the charity sector, the annual turnover of the sector and contribution to GDP.

The combination of detailed case studies and sector-wide ACNC data was further enhanced by targeted research from the Centre for Social Impact on the state of the sector prior to COVID-19 (income growth had already stalled or was going backwards in real terms for most charities), and analysis from the Australian Centre for Philanthropy and Non-profit Studies at QUT on factors such as levels of giving pre and post the global financial crisis (post the GFC average individual giving dropped by around 20 per cent and stayed low for at least three years).

This academic data was supplemented by previous surveys conducted by Pro Bono Australia and Our Community to provide a compelling snapshot of where the charity sector was and what was likely to happen as activities and income streams were reduced.

The response from government in support of the Australian charities sector was world leading – I know of no other countries where so many charities have been given special concessional access to employment support programs such as JobKeeper.

Many people have talked about the role advocacy played in achieving this positive outcome for Australian charities in programs such as JobKeeper, but underpinning all the collective efforts of many groups including CCA was important data about the charities sector.

Now charities face a new data challenge as we begin rebuilding the sector: if Australia’s charities are to be given further special consideration by government, business, donors and communities, we need to build a case for increased support based on good data.

In the last two weeks, Pro Bono Australia has conducted another important survey – this one involving over 400 charities. Fifty-nine per cent of those surveyed were receiving JobKeeper, some had already laid off staff and many more would have to retrench staff if JobKeeper ended. Many were still battling with governments about roll-over of unspent funds. 

Social Ventures Australia and the Centre for Social Impact also released a detailed analysis of ACNC data using financial modelling to demonstrate how vulnerable many charities are. A 20 per cent drop in revenue would leave the majority of Australian charities in a precarious financial position with no reserves and limited capacity to keep operating. 

The information provided in both these sets of data is important as is information provided in snapshot surveys from ACOSS, Philanthropy Australia and others. CCA continues drawing on all this data to make the case for charities to be better supported through COVID-19. We want to ensure as many charities as possible not only survive through the pandemic, but are strong and effective enough to offer the increased support many communities will require over the coming two years and beyond. 

There are two more surveys I believe are critical to making the case for charities over the coming months as well as building ongoing essential trend data into the future:

Centre for Social Impact Pulse of the Sector Survey: This survey will provide an in-depth look at the current operating conditions for Australian charities and for-purpose organisations.

Digital Technology in the Not for Profit Sector: Infoxchange are gathering critical insights into how not-for-profit organisations across Australia and New Zealand are using technology. This research helps efforts to support capacity building, digital inclusion and digital transformation in the sector to grow impact and better serve our communities.

Completing both these surveys may take an hour of your time, but if enough of us take that hour, many organisations will be in a much better position to advocate for our sector drawing on this data to inform national policy priorities.

Data alone will not deliver change, but it is a critical component in so much of our work, including advocacy. Without input from charities, we will not have the data we need to make the strongest possible case for targeted investment in charities across Australia.

My hope is that the sector will not only recognise the value of data, but take the opportunity and support all of us working to build flourishing communities now and into the future. Complete the surveys, please.

 

Read on Pro Bono News:  data-drives-change

 
 

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Terms of engagement – Time for a new relationship with Government?

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Terms of engagement - Time for a new relationship with Government?

Right now charities have a unique chance to re-define our relationship with government writes CCA CEO David Crosbie in Pro Bono News. The principle of shared commitment to improving outcomes for our communities must be the starting point and the end point.

Terms of engagement – Time for a new relationship with Government?  Pro Bono News, 25 June 2020

Relationships are changing as a consequence of COVID-19. For charities, one of the most important relationships is with governments. Many charities rely heavily on government support – over 40 per cent of all funding to the charities sector is provided by governments. 

Over the past few months we have seen an unprecedented level of engagement between governments and charities. There are a growing number of examples of governments not only listening and understanding the challenges charities are facing, but also providing flexibility and support to enable charities to keep operating. Of particular note is the federal government decision to reduce the JobKeeper threshold from 30 per cent to 15 per cent and allow charities to exclude government revenue in calculating their likely loss. Thousands of jobs in the charities sector have been maintained through JobKeeper. This has reduced unemployment, ensured more charities remain viable, and enabled vital services to be maintained within many communities.

Part of the drive for increased cooperation between governments and charities is the theme that we are all in this together – not just governments or business, but whole communities. The shared focus of both governments and charities has not just been on the economy or vested interests, but on the well-being of all Australians. How can we help in this time of crisis? Within this context, the critical roles played by charities at both an economic and social level have been readily acknowledged. While not every part of the charities sector has benefited, the relationship between governments and charities clearly changed, at least in the short term. 

As governments begin focusing more on economic rebuilding, the relationships with charities will face another set of challenges. Already, as we approach the end of the financial year, an emerging issue is whether charities will be able to roll over unspent government funds into the next financial year. Many charities have not been able to fully expend their allocated government funding due to COVID-19 restrictions. 

CCA knows of some cases where approval to roll over unspent funds into the next financial year was provided by a federal government department within 24 hours. CCA are also aware that some government departments and some contract administration staff have taken a very different approach, establishing time consuming and difficult processes for charities seeking to gain approval for rollovers.

In response to a number of requests from charities caught up in this issue, the Charities Crisis Cabinet developed the following set of core principles:

Charities and not for profits that have been unable to spend allocated government funds and complete contracted activities as a result of the impact of COVID-19 should be given due consideration in being able to retain the unspent funds provided that:

  • specified contracted activities can be completed within an agreed period of up to 12 months;
  • the organisation has a good performance record of fulfilling government contracts and expending government funds; and
  • where variations are required to contracted activities, the changes do not compromise the initial policy intent of those activities.

It is exceedingly difficult to accurately monitor the relationships between governments and charities – especially given that most contract variations are negotiated on an individual agency level. In these negotiations, charities can feel isolated and relatively powerless. Having an agreed set of principles charities can cite may be important in strengthening their position in government negotiations.

Sometimes when we talk about government relationships and the charities sector it is useful to think in terms of the kind of expectations we might have, the principles we would normally expect to apply.

Ten years ago government / charity relationship principles were the subject of an extensive consultation across both the charities sector and the government. The result was the National Compact: working together.

While the current government disbanded the National Compact infrastructure, including individual National Compact Champions within federal government departments, it does make for interesting reading at a time of shifting relationships between governments and charities.

 The National Compact: working together included eight priorities for action:

  1. Document and promote the value and contribution of the sector.
  2. Protect the sector’s right to advocacy irrespective of any funding relationship that might exist.
  3. Recognise sector diversity in consultation processes and sector development initiatives.
  4. Improve information sharing including greater access to publicly funded research and data.
  5. Reduce red tape and streamline reporting.
  6. Simplify and improve consistency of financial arrangements including across state and federal jurisdictions.
  7. Act to improve paid and unpaid workforce issues.
  8. Improve funding and procurement processes.

Times have changed, but it is hard to argue that any of these eight priorities are not important to the future of the charities sector. I also think these priorities lack one very important touchstone principle: The relationship between governments and charities is not just about the interests of charities or the interests of governments, but about supporting and strengthening the communities we serve.

One of the big lessons we can learn through the COVID-19 pandemic is that a shared focus on serving our communities enables governments and charities to more effectively work together, supporting real gains in the economic and social well-being of Australians. 

We have an opportunity as we move through the COVID-19 pandemic to re-establish the kinds of relationships we think are needed between governments and charities, to enact the kinds of principles and priorities we think are important. 

If we take this unique chance to re-define our relationship with government, the principle of shared commitment to improving outcomes for our communities must be the starting point and the end point. It should not take a crisis to make us all aware of this shared priority.

Read on Pro Bono News: terms-of-engagement-time-for-a-new-relationship-with-government

 
 

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Charities Crisis Cabinet – Open Letter to Australian Governments

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Charities Crisis Cabinet - Open Letter to Australian Governments

AN OPEN LETTER TO AUSTRALIAN GOVERNMENTS FROM THE CHARITIES CRISIS CABINET, 14 June 2020

Dear Prime Minister, Premiers and Chief Ministers

We write to thank you for your support of charities and not-for-profit organisations during the COVID-19 pandemic.  The measures you have put in place have ensured thousands of charities across Australia have remained viable, thousands more charity workers have been able to keep their jobs, and critical services have been able to respond to existing and emerging community needs.

Thank you for taking the time to listen to our proposals and responding in a way that has been supportive of the charities and not-for-profit sector through these unprecedented times.  

We know charities will face a much tougher time over the next year and beyond.  Fundraising revenue alone is set to drop over 20% (based on post Global Financial Crisis patterns of giving).  The increased need will stretch far beyond the end of COVID-19, with a new cohort of vulnerable and at-risk people joining those already challenged amongst us.  Some charities will struggle to survive even with the support that has been provided to date, many more will have to close programs and services, and consider winding up. 

There are several measures that need to be addressed across Federal and State jurisdictions to ensure charities can continue to serve their communities and provide much needed services.  The measures we are proposing will promote giving, reduce red tape, enable access to new capital and support increased productivity.  These measures will enable charities – employing 1.3 million people and engaging over 3.5 million volunteers – to be much better positioned to support their communities, especially those most in need in the post COVID-19 recovery.  Key measures include:

  • providing a ramp rather than a cliff as JobKeeper ends
  • encouraging giving by providing 150% tax deductibility for donations to charities
  • making it possible for charities to establish fundraising initiatives more quickly by removing dysfunctional red tape fundraising regulations and creating a one stop registration process
  • subject to strong performance, ensuring greater certainty in government contracts by locking in existing payments and prolonging contracts
  • allowing charities and not-for-profits to roll over unspent funds where the underspend is related to reduced activity during the COVID-19 pandemic
  • making it possible for volunteers to be registered more quickly by reducing red tape and creating a one stop registration process
  • supporting initiatives to unlock new sources of capital for charities including underwriting medium-term loans schemes and impact investment options
  • providing transformational funding in critical areas such as information technology, energy efficiency, collaboration, measurement of impact, and other productivity focused areas
  • supporting more research into the issues impacting on the charities sector.

We know and appreciate that you are already considering a number of these measures.

Finally, as a group of charity leaders, we strongly suggest that one clear principle be kept in mind in relation to questions about eligibility and where we draw the line for both government and community support. Those with the highest need should be given priority in accessing services.  

This needs-based approach applies in critical areas such as health, housing, welfare, etc.  As a principle it minimises the impact of bias or discrimination ensuring those who most need support receive it.

For charities, whether someone is an international student on a temporary Visa, a student from regional Australia, an Indigenous person, young carer, or older disabled person, we seek to serve based on need. 

One of the pleasing features of Australia’s response has been a sense that we are all in this crisis together. However, this sense is undermined when the lines of eligibility for support programs seem to discriminate against certain groups in our communities.  We know that good programs – government and non-government – frame eligibility based on need and allow for variations within communities.  This approach will ensure fewer people are left behind as we begin the recovery process.

Our sector knows we have a lot of work to do.  We are constantly aware of the need to look to our own practices and seek to maximise our impact, especially as we enter the post COVID-19 period.

Charities large and small are a critical part of Australia’s economic and social infrastructure.  You have recognised this role in some of the measures put in place during the COVID-19 pandemic.  

Over the next 12 months and beyond, charities and not-for-profits want to be part of the solution, part of rebuilding our communities and boosting our economy.

As you frame policies in critical areas like employment and productivity, charities are keen and ready to be included in policy discussions and to contribute to the development and design of new initiatives.  As a major Australian employer group, we are interested in supporting workplace flexibility.  Similarly, in other major policy areas including information technology reforms, energy and other infrastructure, charities are eager to be part of discussions about improving productivity.

We are available at any time to discuss any of the issues or measures raised in this letter – please contact the Charities Crisis Cabinet secretary David Crosbie on 0419624420. 

We hope you will continue to acknowledge our role and support us in our work to strengthen Australian communities through this important post COVID-19 recovery.

Yours sincerely

Rev Tim Costello AO                                                 Ms Susan Pascoe AM
Co- Chair, Charities Crisis Cabinet                        Co- Chair, Charities Crisis Cabinet    
14th of June 2020                                                        14th of June 2020

Charities Crisis Cabinet: charities-crisis-cabinet

File: 
PDF icon CCC open letter to governments June 2020 final .pdf
 
 

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Jobs, charities and building back better

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Jobs, charities and building back better

To create jobs, boost economic activity and strengthen support for our communities Government should turn its ‘laser-like focus’ on job creation towards charities, writes CCA CEO David Crosbie in Pro Bono News:

 

Jobs, charities and building back better, Pro Bono News, 11 June 2020

“Always remember – your focus determines your reality.” – George Lucas 

Charities are facing a much tougher time over the next year and beyond. 

Fundraising revenue is set to drop by at least 20 per cent – after the Global Financial Crisis giving as a percentage of our average income fell by close to 20 per cent for the next three years. 

Governments are already seeking to withdraw from support packages and make savings. While some governments have acknowledged the critical role charities play in our economy and our lives through concessional access to JobKeeper and other support packages, there is no guarantee this acknowledgement will continue in the post-COVID-19 rebuilding phase. 

Many charities will struggle to survive even with the support that has been provided to date, many more will have to close programs and services, and consider winding up over the coming 12 months. 

In the Liberal National party room meeting prior to the current sitting of federal parliament, the prime minister said the Coalition must have a “laser-like focus” on job generation to lift the economy. Treasurer Josh Frydenberg used the same lines in his press conferencein Eden Monaro on Tuesday: Jobs, jobs, jobs; that is what the Morrison government is about.

Economists have pointed out that the best return on government investment in terms of creating jobs is in labour intensive service industries including childcare, education, health, welfare, and aged care. Most of these areas involve charities, most have a largely female workforce. It would seem appropriate to target government investment in these areas.

In practice, so far the government focus on jobs has translated into a cut-back in childcare (a predominantly female labour intensive workforce) while offering stimulus packages for construction and business instant write offs, neither of which translate into a huge number of jobs. 

The disconnect between the government’s laser-like focus and evidence on job creation suggests that the days of evidence informing national policy may be waning. Recent government investment decisions seem to reflect a distorted “blokey” 1950s era view of what a job is. Australia needs to get more women back into work because more women have lost jobs through COVID-19. 

As part of our work, CCA and the Charities Crisis Cabinet have both advocated for a number of priority initiatives that would not only create jobs but boost economic activity and strengthen the level of support available to our communities. Each deserves serious consideration.

JobKeeper

The charities sector cannot afford for JobKeeper to end in a cliff at the start of October. Thousands of charities remain viable and continue to employ thousands more staff primarily because of the support the government has offered charities through concessional eligibility for JobKeeper.

For as many charities to survive and keep employing people as is possible, JobKeeper should not end suddenly, but be phased out over a six to 12-month period.

Encouraging giving and fixing fundraising

Governments also need to consider measures to encourage giving. A 20 per cent drop in giving translates into between 25,000 and 45,000 less charity jobs.

In some countries, special government tax concessions and matched government funding are provided in times of crisis to encourage greater giving. 

There are many groups across Australia that believe now is an opportune time to encourage giving by providing a 150 per cent tax deductibility for donations to charities for a limited period of time. While this initiative means the federal government might forgo some government revenue, encouraging giving has many benefits including job creation and the development of more lasting giving patterns to support the work of charities.

Governments should also take yet another look at the dog’s breakfast of dysfunctional red tape strangling any charity seeking to pivot to online fundraising. No business sector would put up with the current set of unenforced regulations jealously guarded by precious jurisdictional sensitivities. The solutions are clear, but government officials keep playing tip toe on the merry go round, pretending they are getting somewhere while we just keep circling back to the same spot. 

Contractual certainty

Another job saving initiative would be to end the high level of uncertainty around future government funding. Where strong performance of government contracts can be demonstrated, it makes little sense to re-tender or create uncertain contract renewal processes. Short-term contracts, six month and 12 month roll overs of contracts with no future certainty are effective ways to increase risk and reduce investment in programs and services. Many charities are forced to employ people on short-term and temporary contracts when they would prefer to have the certainty to offer longer-term employment and invest in staff.

Getting more capital into the sector

Many charities would be much more able to employ and retain staff if they could smooth out inconsistent income streams (like bequests, delayed government payments) through access to medium- to longer-term capital at subsidised rates (less than 2 per cent). This form of longer-term capital would make all the difference to many charities struggling with the peaks and troughs of what are largely cash-based finance systems with variable income streams.

Transformational investment 

We keep being told charities need to be more productive (more business-like). Given the miserly investment in productivity across the charities sector, I think charities generally do remarkably well at using their resources effectively. But with additional resources a lot more could be achieved. This is especially true in critical areas like information technology, energy efficiency, collaboration, measurement of impact, and other productivity focused areas. A transformation / productivity investment fund would significantly boost employment and effectiveness across the charities sector. 

Charities large and small are a critical part of Australia’s economic and social infrastructure. Governments have recognised this role in some of the measures put in place during the COVID-19 pandemic. 

Over the next 12 months and beyond, charities and not for profits can be part of the solution, part of rebuilding our communities and boosting our economy. If the focus really is on jobs, charities should be front and centre in building back better post-COVID-19.

Read on Pro Bono News: jobs-charities-and-building-back-better

 
 

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