Government Strangles Charity - Report
26 April 2013 at 10:53 am
Reforms intended to boost public confidence in Australia’s $43 billion charitable sector risk turning the sector into just another arm of government, according to a new report from The Centre for Independent Studies.
“At one time, charities largely depended on private, voluntary action. Today, they depend so much on high levels of taxpayer funding to do their work that they run the risk of becoming lobbyists on behalf of government,” says CIS researcher Peter Kurti in In the Pay of the Piper: Governments, Not-for-Profits, and the Burden of Regulation.
“Last year, the Gillard government set up the Australian Charities and Not-for-Profit Commission to regulate the nation’s charities and supposedly build public trust in the sector. Dwindling income from voluntary contributions may have provoked fears that the public has lost confidence in charities.
“The real problem is that charities appear to have lost confidence in the true concept of charity and have become used to depending on government,” says Kurti. “The new regulatory regime will not only add to the administrative burdens already borne by charities. It also threatens to fundamentally change the meaning of charity.
“There are even plans to extend the meaning of charity with a new statutory definition to include political activism. The result will be that charities are going to find it harder, not easier, to do their work effectively.
“Some level of regulation of the charitable sector is necessary to prevent fraud but the new regime goes too far, extends the reach of reach of government further and further, and threatens the real meaning of charity.”
“As government extends its reach,” argues Kurti, “it will deter all those Australians who want to donate to their favourite charities and support good works across the nation.”
He says international evidence indicates that every dollar the government gives to charity drives away up to 40 cents in private donations.
“The voluntary spontaneity that lies at the heart of charitable endeavour in a healthy civil society is in danger of being stifled,” warns Kurti. “Government needs to get out of the way of charitable giving.”
Peter Kurti is a Research Fellow with the Religion & The Free Society program at The Centre for Independent Studies.
It’s here that the Centre for Independent Studies’ bias truly shines through. The ACNC has the potential to be something great and is already making good progress. It will in fact reduce the regulatory burden and compliance costs for charities, but only if the States are willing to cooperate; they either need to hand over the power to regulate charities and NFPs to the Federal Government or make an effort to harmonise their own laws, ensuring that organisations only have to report once.
Not sure the criticism of the government’s involvement is unbiased here – consider the claim “There are even plans to extend the meaning of charity with a new statutory definition to include political activism”. As far as I can tell, the statutory definition is simply reflecting what has already been decided under common law in the Aid/Watch case – if the definition of charity has been extended it is due to the courts’ interpretation of common law, nothing to do with the government’s proposed legislation.