It Is All About the Purpose, Not the Activity

When it comes to investigating the Catholic Education Melbourne, nothing seen in the last few days suggests the ACNC is doing anything other than what a good regulator should do, writes Community Council for Australia CEO David Crosbie.

As reported in Pro Bono News this week, both Tony Abbott and Bill Shorten have criticised the Australian Charities and Not-for-profit Commission (ACNC) for investigating a complaint against Catholic Education Melbourne (CEM).

In the face of this criticism, the prime minister felt compelled to defend the government saying: “The Catholic Church communicates its views all the time and it is a free country, it’s perfectly entitled to. As far as the charities commission, that’s an independent agency and it’s designed to be and operates independently of government. I can’t add any more to it than that. If you have inquiries of the ACNC … you should inquire of it.”

While there is nothing surprising or unusual about the ACNC action (it is not even new), the reaction of various politicians provides a very interesting insight into the issue of charitable advocacy, politics and regulation.

Let us start with the obvious: if you appoint the commissioner, employ all the staff as public servants in the Australian Taxation Office, pay the Advisory Board as employees of the Australian Taxation Office and fund the agency through the federal budget, you do have influence. I have no doubt that if the government wanted a charity to be investigated it could expedite that action through the ACNC.

But that is not what has happened here. There is a history around ACNC involvement with Catholic education authorities in Victoria. Thanks in part to the eagerness of Catholic education authorities to talk publicly and incompletely about their interactions with the ACNC, we have a credible public record on some these activities.

The following extracts are from the Official Committee Hansard for Senate Estimates, Economics Legislation Committee, 19/10/16 pages 115 – 130. This is almost two years ago.

The extracts are not presented in strict order so they can serve as a summary of a longer discussion:

Senator Abetz: “On 5 July this year, Ms Prue Monument, the ACNC’s director of compliance, sent a ‘please explain’ letter to Mr Stephen Elder, executive director of the Catholic Education Commission of Victoria, requesting clarification on a letter to parents disseminated by CECV prior to last year’s federal election… I would like to read to you a short portion from the letter sent to Ms Monument by Mr Elder on 8 July: ‘We are also dismayed by your failure to detail in your letter the particulars of any evidence you might have of a breach.’ Despite Ms Monument’s letter of absolution, I think Mr Elder has a point, don’t you… Now this was a proactive letter, as I understand it, as sent by the ACNC to the CECV. Was that as a result of a complaint?”

Senator Di Natale: “On the same issue, can I just summarise the situation as I understand it? We had the Catholic Education Commission write to people – thousands of Victorian Catholic school students – advising them not to vote for the Greens in the most recent federal election. They also wrote, I think, to students in the 2014 state election. They are the facts as I understand them.

“…The Australian Charities and Not-for-profits Commission have indicated that, when it comes to an activity that is ‘for the purpose of promoting or opposing a political party or a candidate for political office’, that disqualifies them from being registered as a charity… If you are advising not to vote for a political party or a candidate, that seems pretty obvious to me that that is a disqualifying purpose.”

Mr Locke: “…We applied the same practice and the same procedure in respect of all the complaints that we received. We received 19 complaints this year with regard to political advocacy… I cannot disclose which organisations they were, but what I can tell you was that we had 19 complaints raised with us: three of those were about organisations that are not registered charities, so we had no jurisdiction in respect of those, and 16 related to 11 charities. In respect of those 11 charities, we evaluated those concerns and we opened five investigations.

“…With one organisation, so far, we have issued a notice to show cause as to why that organisation should not be revoked, because we think that it indicates that there is a political purpose. There is another one that is under very active investigation at the moment, and there are two others where we have actually issued strong regulatory advice to the organisation in terms of what is permissible and what is not permissible moving forward – and there is one that we finalised with no further action required

“…Because of the reporting on the Catholic Education Commission, because of setting the record straight, I am able to talk about that individual case. This was one of the situations where we actually did not have all the material in front of us. With many charities you get a complaint, and the material that has been complained about is presented to you, or it has already been in a public campaign, or it is on the charity’s own website. In this case we did not have sight of the letters that were being complained about, and that was the reason that we wrote to the Catholic Education Commission requesting a copy of those letters. When we examined the letters and looked at that in the context of the guidance, our view was that this did not indicate a political purpose, and we wrote to the Catholic Education Commission and advised them that we would not be taking further action in respect of that.”

Mr Baird: “Senator, in this regard we need to distinguish between activity and a purpose. An activity may not necessarily constitute a purpose. It may be an activity in support of a charitable end but not constitute a new purpose for the organisation. That is part of the direction of the courts and the discernment that we have to bring to this sort of case.”

Senator Di Natale: “Well, okay. How is advocating not to vote for a political party inconsistent with ‘the purpose’ of opposing a political party?”

Mr Locke: “Senator, you have to look at the specific wording that is used by charities in these circumstances. You may have a situation, for example, where an organisation is saying, ‘Vote for this particular political party’ or ‘Do not vote for this political party’ or ‘Put them last’. You may have a situation where actually what the charity is doing – and charities across the spectrum do this – is setting out what their policy position is on what the policy position is of different political parties who are raising that.”

Ms Pascoe: “Of the 19 complaints that we investigated, there are a number that were, to use the metaphor that we adopt – we adopt the metaphor that charities need to ‘swim between the flags’ when it comes to looking at the kind of advice that they can give and the kind of advocacy they can engage in. We have a number of charities that were swimming extremely close to the flags but did not quite go outside the flags. What we would say to them is that, while the ACNC may not be able to take action, they may well be judged in the court of public opinion, and that can have a detrimental impact on their reputation in the long run. So we would strongly urge charities to operate within the spirit as well as the letter of the legislation.”

I was present during these Senate Estimates in October 2016 as an observer. I enjoyed seeing one of the most conservative senators in the government and the leader of what might be described as the most progressive political party in the Senate both complaining about the ACNC – one saying the ACNC should not be following up a complaint and one arguing the complaint had not been pursued vigorously enough. For me, this diversity of criticism was one indicator that the ACNC was acting fairly.

And so it is again this week. I would be surprised if the complainant to the ACNC on the advocacy by Catholic Education Melbourne was not someone from the Australian Greens. The diversity of criticism we have seen since the investigation was made public by Catholic education authorities, the strange bedfellows created, are all indicators the ACNC is not playing favorites.

While I lament the lack of understanding about the role of the ACNC betrayed in various comments made by our politicians and others, nothing I have read or seen in the last few days suggests the ACNC is doing anything other than what a good regulator should do. The ACNC appears to have treated all complaints seriously, adopted due process and ensured fair application of the legislation.  

Whether we agree with the position certain charities take in relation to education, the environment, housing, health, welfare, religion or any issue, charities should always defend the right to advocate for a charitable purpose, including ranking the specific policies of political parties in relation to the core purpose of the charity. Engaging in advocacy does not make advocacy your charitable purpose.

For as long as the ACNC fairly enforces the regulations, for as long as Australia’s laws and regulations continue to protect charitable advocacy, the biggest danger to public advocacy is not the charities regulator, but the tendency of far too many charities to self-sensor. And that is another story…

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.