Report on Disclosure Regimes for Not for Profits Released
15 December 2008 at 1:25 pm
An Australian Minister for the Third Sector and a single independent regulator for Not for Profit organisations are just some of the far reaching recommendations of the report by the Senate inquiry into disclosure regimes for charities and Not for Profit organisations.
The Inquiry was initiated by former sitting members of the Australian Democrats following research published by the Australian Consumer Group Choice on charities and the cost of fundraising, early in 2008.
A survey conducted by Choice Magazine found that 81% of respondents did not know what proportion of their charitable donation reached their favoured charity’s beneficiaries, yet 94% considered it important to have access to that information. The survey found wide variability and inconsistency in the way that charities communicate key information to donors. In some cases, such information was not publicly available at all, as some charities did not publish their annual reports or financial accounts.
The Senate Economic Committee has delivered its report to parliament after receiving some 183 submissions from organisations and individuals.
In its list of recommendations the Senate Report says that a special unit should be set up within the department of Prime Minister and Cabinet specifically designed to deal with issues around the Not for profits and the Unit should report to a Minister of the Third Sector.
The report also recommends the establishment of an Australian National Regulator for Not for Profit Organisations saying it should have similar functions to regulators overseas and in particular in the UK, including a register for NFP organisations with a compulsory sign-up requirement.
The aim of the Regulator would be to develop a searchable data base of Not for Profits for public access, ensure compliance with relevant legislation, develop best practice standards as well as educate Not for Profits on best practice.
In the area of reporting and transparency, the report recommends the implementation of a standard chart of accounts for all NFPs and a new disclosure regime that contains elements of narrative and numeric reporting as well as financial reporting.
The Senate committee recommends that the national regulator investigate the cost- versus-benefit of a GuideStar-type system (a website portal that publishes information on the aims and activities of Not-For-Profit Organisations) in Australia to encompass all NFP Organisations.
As well it recommends that a Taskforce be established to help implement the recommendations of this report.
It says the Taskforce should actively seek to ensure that the measures of reform that it implements do not impose an unreasonable reporting burden on small and micro Not for Profit organisations.
The full report can be downloaded at: http://www.aph.gov.au/SENATE/committee/economics_ctte/charities_08/report/index.htm