The Long Road to Charity Reform

It’s widely accepted that a range of regulatory, institutional and funding reforms are needed to enhance the Australian charity sector’s effectiveness… this was true in 2000 when the reform process began and, frustratingly, much of it still remains the case in 2017, according to one man who has been pushing for reform for a very long time.

Long-term Productivity Commissioner Robert Fitzgerald talks to Pro Bono News editor, Lina Caneva about the slow pace of change, despite a strong willingness for progress from within the not-for-profit sector and from some political quarters.

The discussion coincides with the upcoming fifth anniversary of the establishment of the country’s first charity regulator, the Australian Charities and Not-for-profits Commission (ACNC) in December (of which Fitzgerald was an integral part) and the start of a mandatory review of its existing legislation.

Fitzgerald’s CV is impressive. He has a long history in the not-for-profit sector both at the grassroots level in a voluntary capacity as well as extensive experience in commerce, law, public policy and community services. He is a former president of the Australian Council of Social Service (ACOSS) and director of The Benevolent Society, the chair of the National Roundtable of Nonprofit Organisations and state president of the St Vincent de Paul Society in NSW.

During his time at the Productivity Commission, Fitzgerald has chaired 15 major research studies including the Contribution of the Not-for-Profit Sector which produced a comprehensive and influential report in 2010. That report recommended large scale reform including the introduction of a charity regulator which eventuated two years later under the Labor Gillard government.

Fitzgerald was also a member of the Inquiry into the Definition of Charitable and Other Organisations in 2001– an issue that still has not been resolved across state and federal jurisdictions – and he was appointed by the federal government as the inaugural chair of the ACNC Advisory Board for three years in 2012.

Fitzgerald says that since his 2010 report, many of the recommendations remain valid today and he believes that Australia has reached the “hopeful” stage where reform can eventually occur.

“I think we have been through four [identifiable reform] periods really,” Fitzgerald says.

“I think we went through a period between 2000 and 2008 that was certainly a period of ‘waiting’. A period where people were talking about reform, where there had been the inquiry into the definition of charity, but there wasn’t much sign that the Commonwealth government was engaged in or interested in reform at that stage. The one exception was John Howard’s Prime Minister’s Business Community Partnership which did some good work in relation to philanthropic endeavour.

“I think the second phase was really from 2008 through to 2013 and I think that was the period we can call the ‘emerging reform’ period. There we saw some very significant work being done in relation to the Productivity Commission’s report.

“We saw the Rudd government initiate very significant progress in relation to legislative reform including the early stages of the ACNC, the National Not for Profit Reform Council was formed and there was great optimism during that time.”

Back in 2011 however, Fitzgerald used far stronger language about the progress of reform.

He told a not-for-profit conference at the time: “It is almost intolerable that three years on from the commencement of the not for profit reform process there is still no ‘harmonisation’ of fundraising laws around Australia.”   

Time has marched on.

Fitzgerald describes the third phase of charity reform as “the period of disappointment and retreat” between 2013 and 2015.

“Here we saw the sustained attacks on the ACNC and the abandonment of any overarching body looking at reform. None of the reform agenda progressed other than the regulatory reforms of the ACNC and there was a general disappointment within the sector. Much of the gains were lost or stalled,” he says.

But Fitzgerald believes the sector has not been put off as it embarks on the current “stage”.

“This fourth stage is what I would describe as the ‘hopeful’ stage with the future of the ACNC being restored and the attempts to deliver efficient and effective regulatory reform,” he says.

“However, some areas of fundraising reform have stalled. And while there is not a lot of action or evidence of reform, this current phase has emerged as being hopeful.

“There is no doubt that some areas still need to be progressed around, for example, claims of entitlements for directors, the need to look at regulatory arrangements for not-for-profit organisations. A whole lot of work still needs to be progressed including the need for ‘harmonisation’, particularly for states and territories to vacate the area of control and move it to the Commonwealth, emerging issues around an appropriate structure for charities to evolve and the need to review the regulatory set up of the ACNC.”

When pushed on the campaign for fundraising reform known as #fixfundraising, Fitzgerald describes the failure to action a national fundraising reform agenda as a “disgrace”.

“There is no reason that the governments can’t come to an agreement on a national approach to fundraising. It’s a disgrace,” he says.

December marks the fifth anniversary of the establishment of the charity regulator which, under the Act, requires a full review of its operating legislation.

The ACNC has already flagged that it wants to see the current secrecy provisions that prevent it from revealing details about charity wrongdoings removed in this year’s review.

ACNC assistant commissioner David Locke told Pro Bono News earlier this year that the current secrecy provisions were “not satisfactory”.

“To be honest, the secrecy provisions that the ACNC has in the legislation really gives us difficulty in carrying out our purposes properly,” Locke said.

“What we would like to do is to be able to, at the conclusion of a case, set out what the findings were and what the basic facts were around that.”

Another issue for the ACNC is the scope of punishment when a charity has its status revoked and the ACNC’s compliance powers. For Fitzgerald the five year review of the ACNC Act is welcomed.

“There are a number of small measures that can assist the ACNC such as issues around privacy, sharing information between agencies, looking at companies limited by guarantee. These are matters that can be dealt with easily,” Fitzgerald says.

“The bigger issues will take a bit more effort but can be amended by legislation.”

While reflecting on his “hopeful” stage Fitzgerald says one of the obstacles for reform stems from when former prime minister Tony Abbott removed the National Not for Profit Reform Council set up by the Gillard government.

“We lost the means by which the issues could be advanced and that’s a weakness, as there is no one co-ordinated place now for the reform process,” he says.

“This is an issue that needs to be addressed and coordinated.”

Yet Fitzgerald agrees that he continues to remain “hopeful”.