Not-for-profit Law
Legal help for community organisations

Time to get serious on clarity for charity

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What do a footy legend, a spin bowler and a health app creator have in common? They’ve all graced the pages and screens of our nation’s news media facing allegations of rorting fundraising laws and public good will.

Last year, Belle Gibson was publicly shamed when it emerged that promises that funds would be directed to charity partners were never fulfilled. There have been allegations that only 10 percent of funds raised by the EJ Whitten Foundation’s Legends Game were distributed to cancer research, with the contracted event manager for the game allegedly refusing to provide financial records to the Foundation. And Shane Warne’s Foundation has announced that it will be wound up while the Victorian fundraising regulator continues its investigation into the Foundation.

The case of the Shane Warne Foundation is at best a tale of an organisation that has struggled to explain how its money is being spent, and has in recent years distributed only small proportions of funds raised to beneficiaries. At worst, theallegations that the veil of charitable fundraising has been used to put money in the pockets of company managers and family members could prove to be true. We do know that the Foundation has dodged accountability to the public, it has been late with filings, applied to withhold information and has still not satisfied the Victorian regulator its records accurately reflect its activities over the last few years.

It’s time for Australia to get serious about setting up systems for transparency and accountability for fundraising charities. Not because most are bad, precisely the opposite. Most charities and fundraisers do great work - I see this every day. And most do it on the smell of an oily rag. These front page stories are tainting the hard work of charities and harming the culture of giving in Australia.

To criticise a charity for spending too much on ‘administration’ is simplistic. But there are cases where the impact we get for our donation is not good enough, and our ability to make this assessment is hampered by a lack of transparency. It is us, the donating public who need to decide if a charity is worthy of our donation. To do this we should be able to check on our mobile phones to see who is behind a particular charity, what they do, and whether they are meeting their regulatory compliance requirements.  

If a listed company is expected to keep records and make disclosures to protect those members of the public that purchase shares in that company, why should the situation be any different for a charity or not-for-profit seeking public donations, especially those doing so on a large scale?

To improve the situation what should be done? First, the register of charities maintained by the Australian Charities & Not-for-profits Commission needs to be retained. The Turnbull Government needs to remove legislation that the Abbot Government introduced to abolish the Commission - currently it is languishing in Parliamentary limbo, like an axe dangled over the Commisison’s head and a threat to the survival of the register that it currently maintains.

Second, the current inconsistent and archaic state-based charitable fundraising laws need to be harmonised and simplified, and brought in line with the Charities Commission’s register to create a one-stop information shop like the ASX. There seems to be some appetite for this with the announcement yesterday (at a forum on these issues convened by the Charities Commission) that state regulators are committed to working together on the issue. It seems they are looking at a model for at least avoiding reporting duplication, following a lead from the South Australian Government. Similar commitments have been made before to no end.

This time the commitment must translate into real reform action. It’s good for the sector, it’s good for donors, it will encourage public trust and confidence in charities and enhance the culture of giving in Australia. It’s a no brainer.

Kate Fazio, Manager at Not-for-profit Law, Justice Connect (an independent charity that provides legal help to charitable and not-for-profit organisations)

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