Proposed Crackdown on SA Charities

Charities would be compelled to provide a breakdown of their financial records, to be made publically available, under major reforms proposed by South Australia’s Rann Government.

Gambling Minister, Tom Koutsantonis, says a Code of Practice has been drafted by the Office of the Liquor and Gambling Commissioner (OLGC) and the Department of Treasury and Finance which will be released for public discussion by the end of March.

Under the plan, Charities would be required to provide a breakdown of all funds, assets and expenditure to the Office of the Liquor and Gambling Commissioner.

This information would be published each year on the charities website.

According to the proposed changes, South Australians could look up an organisation before they donate, and see for themselves how much of their money would go towards wages and administration, and how much would be used for charitable purposes.

The Code of Practice proposes restrictions on collection times – which would include telemarketing and door-to-door appeals.

Except by prior appointment, a licensed charity must not ask for donations on Easter Sunday, Good Friday or Christmas Day.

Licensed charities may only collect between 9am and 8pm on weekdays, 9am and 5pm on Saturdays, and midday and 5pm on Sundays. Door-to-door and street collections for licensed charities must not be made after sunset or 6pm, whichever comes first.

All collectors must be trained – and keep a current document on their premises – detailing the approximate percentage of donations returned to the charitable purpose. They must offer donors a numbered receipt for donations over $2 which shows the name of the charity.

Any contract for donations to be collected on an ongoing basis must be subject to a 10-day cooling off period.

In September 2008, amendments were made to the Collections for Charitable Purposes Act 1939 to
include:
• increased disclosure by charities
• the establishment of a charities website to increase transparency for all licensed charities; and
• the introduction of inspectorial powers

As a result of these investigations and random audits, two charity licences have been revoked and two refused.

Approximately 12 charities are currently undergoing an audit and the OLGC intends to investigate a number of others as a result of complaints, police intelligence and audit processes.

A spokesperson for the Gambling Minister says the names of the organisations currently being audited would not be released unless action was to be taken against the organisation.

The CEO of the Fundraising Institute of Australia, (FIA) Chris Macmillan says any attempts to improve transparency is good however it would be better if governments consulted Not for Profit bodies earlier in the process.

McMillan says the FIA will be responding to the Draft Code of Conduct when it is released publicly. She says the FIA does not support percentage based remuneration as suggested in the proposed changes (where collectors must detail the approximate percentage of donations returned to charitable purpose).

She says currently South Australian Not for Profits who are members of the FIA are doing the right thing by using the FIA Code of Practice.

McMillan says she has been urging for some time the need for a National Chart of Accounts that the whole third sector can use. (Already the Council of Australian Governments (COAG) in December agreed to adopt a Standard Chart of Accounts for Not for Profit organisations receiving government grants. See our Pro Bono Australia News story here)

The Code of Conduct will be open for public comment for 6 weeks and a decision on the reforms are expected by mid-year.

For more information go to www.charities.sa.gov.au