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27/10/2011 - An Insight into Legislative Changes to the way we do Fundraising in Australia
In the May 2011 Budget, the Federal Government made two announcements which will affect how we do fundraising in Australia. The first was the formation of the Australian Charities and Not-For-Profits Commission (ACNC) to beoperational by July 2012. The second was to review the definition of ‘Charity’, which is to be completed by June 30 2013.
The ACNC is similar to the Charities Commissions which exist in the UK and New Zealand.
Since these announcements, there has been some concern expressed about the new commission especially in the area of new laws relating to fundraising. Let me say at the outset there is no need for any such concern, there is a long way to go and I hope that after you have read this document you will understand why I say this.
Recently I had the privilege of attending a meeting between the Not-Profit Reform Council, lead by Linda Lavarch, and the members from Treasury responsible for drafting the new legislation to establish the ACNC. At this meeting we were given insights into what is being proposed.
I can assure you that charities and the non-profit sector are being well represented by those on the Not-For-Profit Reform Council.
The Federal Government has made it very clear that they want to encourage the public to have confidence in the non-profit sector. It is to the government’s advantage.
Over recent years there has been a trend by governments in developed economies to transfer the delivery of services to private not-for-profit providers. This has put further pressure on organisations to grow their income from the public. In order to do this, organizations have needed to employ professional fundraisers who use sophisticated and internationally recognized methods of securing funds.
The raising of these funds has become sophisticated because organisations rely greatly on the monies raised to deliver their services which are needed within the community. These funds are needed on an annual basis, not just in the short term.
Organisations cannot just rely on lamington drives and one off events. Today charities rely on members of the community who are willing to support them on a regular basis. They also rely on fundraising programs managed by professional fundraisers that deliver the resources they need.
The Federal Government has also accepted the principle of harmonisation. This is where a charity need only apply once to raise funds and this application would apply to fundraising throughout Australia. At the moment charities have to apply within the state they are fundraising in and if they are running a national campaign they have to apply in every state and territory. And what adds to this burden are the different rules in each state. So it is not just an issue of making applications but also of compliance which includes reporting back with different rules for each state and territory.
Reasons for the differences in legislation across states and territories is that most fundraising legislation for the charitable sector in Australia has been developed in response to wrongdoing by an individual or a small, usually private, ‘charity’ in the state. As a result, these differing legislations have continued to burden all charities trying to do good work because of the actions of a small minority.
It should be noted that any wrongdoing such as fraud or theft is covered by existing laws anyway.
This is why harmonisation is one to be encouraged. But the Federal Government is faced with two major hurdles. The first hurdle to be addressed is what should be covered in the legislation especially in the area of fundraising? The second hurdle for the Federal Government is that before it can harmonise the law, it needs the agreement of all States and Territories of Australia.
In regard to the first hurdle, right now a draft document is being prepared by the Treasury which will outline principles behind the legislation and what the new legislation will cover. The aim is to have this available for comment toward the end of October/early November.
This document will cover not only fundraising but the whole of the legislation as it would apply to the ACNC. After comments have been received, then Treasury will begin drafting the legislation.
However it is the second hurdle that is the bigger concern. It would appear that despite the intention of the Federal Government, it may take five years or more before harmonisation will be possible. The reason for this? There is a number of States that are adamant about not handing over their power, especially in relation to fundraising to the Federal Government.
So where does this leave charities and fundraisers today? It leaves us uncertain about what will be the final outcome. There are so many possible outcomes and given the current political instability in Canberra there is no certainty that even what has been proposed in the May 2011 budget may happen.
Therefore what is my conclusion? We need to be “alert not alarmed”.
Leo Orland FFIA CFRE
27 October 2011