Survey Reveals ACNC Concerns
13 December 2012 at 10:33 am
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A study into the Not for Profit sector’s expectations of the new charity regulator, the Australian Charities and Not-for-profits Commission (ACNC) reveals a heightened concern around resourcing compliance requirements – with religious and educational institutions most concerned.
Law firm Makinson & d'Apice commissioned independent research by Julian Midwinter & Associates to research Not for Profit views on the ACNC and other issues affecting them. About 40% of organisations represented in the survey operate in NSW; nearly 30% operate at a national level; 10% operate internationally.
Nearly one third of of those surveyed felt they were not well informed about impending changes relating to the ACNC.
Particularly within religious organisations, the survey data suggests there are heightened concerns about the ACNC in areas of costs and resourcing of additional administrative and compliance requirements.
The research indicates 75% of religious and educational institutions believe their own organisation is unlikely to benefit from a national sector framework. Respondents in this area commented that the ACNC will not achieve the Commonwealth Government's stated intention of streamlining administration of the NFP sector; rather, it will create a whole new level of compliance for a sector without the resources to respond.
Makinson & d'Apice Partner, Bill d'Apice, says it is interesting to see how different constituencies responded in the survey as there are some widely divergent views.
"Our analysis shows which bodies are the most optimistic, however each group has identified a series of specific positives and negatives in terms of impacts on their own organisations and for the wider community," d'Apice said.
“Notably positive sentiment toward establishment of the ACNC has abated somewhat since the the law firm?s 2011 study.”
The survey found that organisations based in Northern Territory and Queensland were most strongly in favour of establishment of the ACNC (although number of respondents from NT was very low overall), organisations operating internationally were also highly positive towards the ACNC while organisations operating in Western Australia were most negative overall.
"Our 2011 findings showed that about 5% of organisations expected negative effects from the advent of the ACNC, where now, around 15% see it negatively," d'Apice said.
Two thirds of respondents believe there will be considerable benefit to the NFP sector as a whole in getting to a national framework for fundraising compliance."
Almost half of the respondents were sceptical that the ACNC could achieve one of its stated intentions: to reduce compliance costs and reporting burdens.
While at the other end of the spectrum, the numbers of respondents with a positive view of the ACNC has also decreased.
"We weren't surprised that there is strong demand for further information and education for executives and managers of NFPs about the ACNC," d'Apice said.
Most respondents felt that the ACNC would have no impact on their supporters and donors but believe the positive impact of the ACNC will increase over time.
Approximately half the sector believed that public perceptions regarding independence, governance, and standards in the NFP sector would improve following the introduction of the ACNC.
Approximately one in five NFPs see changes to governance as making it more difficult to attract and retain high quality directors. About the same proportion believe it will make things less difficult on director recruitment, but over half of respondents see it making no difference.
The findings indicate that Government information is now much more important to NFP organisations than a year ago. The sector needs, wants, and looks to Government for more and clearer information. The Commissioner of the ACNC has given every indication so far that the ACNC will make the provision of information to the sector and the general community a priority."
“The sector needs, wants, and looks to Government for more and clearer information. The Commissioner of the ACNC has given every indication so far that the ACNC will make the provision of information to the sector and the general community a priority," d'Apice said.
The survey also looks at the area of business sophistication in terms of Not for Profit operations.
“We observed a clear and rapid trend to increasing business sophistication in the NFP sector,” d'Apice said.
"Some 58% of respondents rated current business sophistication of their organisation as “sophisticated” or “highly sophisticated”.
Only 20% of respondents rated the business sophistication of their organisation five years ago as “sophisticated” or “highly sophisticated.
A snapshot of the findings is available here.
More information can be found at the Makinson & d’Apice website http://www.makdap.com.au/
and their blog site : Charities & Not-For-Profits Law in Australia http://www.charitiesnfplaw.com.au/
The way the ACNC has been set up suggests there is an assumption that charitable organisations generally rely on donors to fund their operations. This is no doubt true for the biggest charities, but there are a very large number – perhaps even a majority? – of charities whose primary source of external funding is government grants. The achievement of one of the ACNC’s key purposes – improved public confidence in the charitable sector – will therefore make no difference to these organisations.
Government-funded charitable organisations are in most cases already required to be registered or accredited under a strict quality assurance framework, so the ACNC simply represents an additional body to report to. For the very many organisations that rely primarily on state government funding, there can be no positive benefit from the ACNC’s other key purpose – reduced burden of regulatory compliance – until reporting to state government departments is integrated with the ACNC. This could be years or even decades away.
It’s little wonder, therefore, that state-regulated, state-funded (or self-funding) organisations are concerned that the ACNC is just a new layer of red tape with no positive offset.