Good 360
MEDIA, JOBS & RESOURCES FOR THE COMMON GOOD
NEWS  |  Leadership

BLOG: The Spillover Effect: The Pitfalls of Policy Transfer


Thursday, 19th June 2014 at 9:14 am
Staff Reporter
In this latest Blog, Not for Profit Fulbright Scholar, Dr Tessa Boyd Caine writes that the cultures of regulation may vary, but the problems of outdated, inconsistent and duplicative regulatory environments create barriers to the effectiveness of charity organisations the world over.

Thursday, 19th June 2014
at 9:14 am
Staff Reporter


0 Comments


FREE SOCIAL
SECTOR NEWS

 Print
BLOG: The Spillover Effect: The Pitfalls of Policy Transfer
Thursday, 19th June 2014 at 9:14 am

In this latest Blog, Not for Profit Fulbright Scholar, Dr Tessa Boyd Caine writes that the cultures of regulation may vary, but the problems of outdated, inconsistent and duplicative regulatory environments create barriers to the effectiveness of charity organisations the world over.

Before coming to the US I was warned to be wary of assuming any other country has all the answers. These words echoed in my ears this week as I met with US officials in charity regulation and discovered not just the depth of challenges facing charity regulation in the US, but the vast similarity of those challenges to ours in Australia.

I remembered another lesson too, this one from Sociology 101, about the great pitfall of ‘policy transfer’: the assumption that you can successfully import an idea from somewhere else, without an understanding of the context and cultures that shaped that idea in the first place.

Cultures of regulation may vary, but the problems of outdated, inconsistent and duplicative regulatory environments create barriers to the effectiveness of charity organisations the world over.

I have entered the second phase of my Fulbright project, and a new base at the Urban Institute in Washington DC. The Urban Institute is home of the National Center for Charitable Statistics, the repository of data on the nonprofit sector in the United States.

In the 1990s a partnership between NCCS and the Foundation Center led to the US tax office (the Internal Revenue Service) adopting a standard classification of charities and non-profit organisations in the 1990s and I was keen to learn about the processes and relationships that enabled this to occur.

US Treasury Building
I was able to tour the historic US Treasury building including ‘the most-coveted office in DC’ (it looks into the White House); and the Cash Room, from the days when the Treasury actually held money.

Following that trail has taken me to the heart of charity regulation in the US. This interests me greatly from my years working closely on the reform for national charity regulation in Australia. Recent policy conversations which invariably involved someone arguing ‘if the US can rely on the IRS, why do we need a national regulator in Australia?’; and the comments by Minister for Social Services Kevin Andrews MP that we could look to American models such as Charity Navigator to do the job of the Australian Charities and NFP Commission, have also made me ask ‘why not?’

In fact there are a number of reasons why not, which will be familiar for anyone who has followed the path of recent charity regulation reform in Australia. Firstly, the US faces the same problems that Australia has wrestled with for years, in the questionable utility of the federal tax agency acting as a charity regulator.

At the most pointy end, scandals ranging from embezzlement of non-profit funds to seeking charitable concessions for non-charitable activities in the US continue to raise compliance issues requiring regulation and remedy beyond the sole avenue of tax exemption.

Secondly, current tax and regulatory reporting goes some way towards US sector accountability but does nothing for transparency. Yes, there are a range of data and research organisations in America that support charity transparency beyond government institutions.

But unlike in Australia, they have access to a phenomenal wealth of publicly available data, because charities provide far more detailed reporting to the IRS. Emulating such an approach would entail significantly increasing the reporting burden on Australian charities.

Third is the issue of public trust and confidence, expressed best by a US Not for Profit sector expert: As the number of charitable organizations continues to grow and the issues surrounding the sector become more complex, the supervision, administration, and enforcement of charitable trusts and nonprofit organizations by state charity officials will continue to be challenging for even the most experienced regulator.[1]

This reminds me of how maintaining trust and confidence became one of the three key objects of the Australian Charities and Not-for-profits Commission.

Fourth is the problem of duplicated, inconsistent and ill thought out reporting regimes.

Fifth are the concerns about fraudulent fundraising activity. Last but not least, there are concerns in the US about the administration of charitable trusts which, while subjected to far more public interest than we have seen in Australia, continue to be beset by a lack of effective and legitimate administration.

Cutting across these discussions has been the persistent concern that the IRS has lost much of its sector expertise which, say officials and sector representatives alike, is essential for good, well-informed decision-making.  Even more telling are the voices calling for a whole new approach to charity regulation.

One such voice, a former Director of the IRS Exempt Organisations Division, has argued that the IRS is ‘structurally ill-suited for the task of providing vigorous oversight of the nation’s growing number of nonprofit organizations’ and proposes ‘a new, national institution’.[2] Sound familiar?

Turns out no one country has all the answers!


[1] ‘Emerging Nonprofit and Foundation Enforcement Issues’.

[2] ‘Charity Oversight: An alternative approach’. See also updated analysis in Owens 2013.          

About the Author: Dr Tessa Boyd-Caine is on leave as the Deputy CEO of the Australian Council of Social Service, the peak body for charities and social services and the voice for people experiencing poverty and inequality in Australia. She was awarded the inaugural Fulbright Professional Scholarship in non-profit leadership in 2013 and is currently undertaking her Fulbright at the Foundation Center in New York City and the National Center for Charitable Statistics within the Urban Institute in Washington DC.  Follow her on twitter: @tboydcaine

The Fulbright Professional Scholarship in non-profit leadership is sponsored by the Origin Foundation and supported by the Australian Scholarships Foundation. Applications for the Fulbright Scholarship closes August 1.



FEATURED SUPPLIERS


Yes we’re lawyers, but we do a lot more....

Moores

Brennan IT helps not-for-profit (NFP) organisations drive gr...

Brennan IT

Helping the helpers fund their mission…...

FrontStream Pty Ltd (FrontStream AsiaPacific)

HLB Mann Judd is a specialist Accounting and Advisory firm t...

HLB Mann Judd

More Suppliers


YOU MAY ALSO LIKE

Australians Want to Hear the Voices of Charities – Politicians Take Note

David Crosbie

Thursday, 23rd November 2017 at 8:48 am

Have You Been Commodified?

David Crosbie

Thursday, 12th October 2017 at 8:36 am

Susan Pascoe Reflects on the ACNC Five Years On

Wendy Williams

Wednesday, 27th September 2017 at 3:11 pm

Charity Sector Pushes to Change Outdated Fundraising Regulations

Luke Michael

Wednesday, 30th August 2017 at 9:31 am

POPULAR

Red Cross Moves to Wage-Based Fundraising Model

Lina Caneva

Thursday, 16th November 2017 at 8:30 am

Concerns Raised Over New ACNC Board Appointments

Luke Michael

Monday, 20th November 2017 at 2:28 pm

New Same-Sex Marriage Bill Looks to Protect Faith-Based Charities

Luke Michael

Monday, 13th November 2017 at 5:25 pm

Adelaide at the Vanguard of Ending Street Homelessness Globally

Wendy Williams

Tuesday, 21st November 2017 at 8:43 am

Write a Reply or Comment

Your email address will not be published. Required fields are marked *


Good 360
pba inverse logo
Subscribe Twitter Facebook

The social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!