Review of Consumer Law Sees Charity Sector ‘Fobbed Off’

A coalition of not-for-profit organisations under the #fixfundraising banner says the charity sector has been “fobbed off” and relegated to third position in any future reform priorities with the release of the long-awaited review of Australian consumer law (ACL).

The ACL review was undertaken by Consumer Affairs Australia and New Zealand (CAANZ) in June 2015. The interim report was released in October 2016 and identified options to improve the law’s efficiency and effectiveness including charity regulations. The final report was released last week.

However, the NFP #fixfundraising campaign, led by Justice Connect and the Community Council of Australia (CCA) said the long-awaited report failed to address its concerns, instead suggesting there be future research around fundraising in the next two years.

The report concluded that: “Once sufficient time has elapsed, CAANZ will assess the effectiveness of that guidance and any relevant regulator actions. The project will also look at how this could inform whether any future reforms are needed to enable the sector to work more effectively to the benefit of the Australian community. CAANZ proposes to commence this assessment in 2019/20.”

In the forward to the report AANZ chair and director of Consumer Affairs Victoria Simon Cohen said: “CAANZ acknowledges that aspects of the ACL need further consideration. An ambitious forward research program is proposed for areas such as unsolicited selling, digital products, services, unfair trading and fundraising.”

The #fixfundraising campaign has argued that with seven different state and territory laws, any charities that aspired to collect Australia-wide, or even small groups using the internet to raise funds, must abide by a minefield of rules and regulations that add millions of dollars in unnecessary cost to the not-for-profit sector.

During the ACL inquiry, CCA CEO David Crosbie said the review was an important doorway to harmonisation.

However on the release of the final report Crosbie told Pro Bono News that “the only positive in the ACL review was that it acknowledged charities exist and guidance was needed”.

“This is a very disappointing non-event outcome which postpones addressing the issues besetting fundraising regulations in Australia yet again,” Crosbie said.

“There are very simple fixes to ACL that would ensure donors and charities are covered and there is no need for state regulations.  

“Worded properly these changes have no implications for political donations.

“The review has acknowledged the sector but failed to address its concerns.”

Director not-for-profit law at Justice Connect Sue Woodward told Pro Bono News the charity sector had been “fobbed off” in the final report.

“This report is an unnecessary barrier to urgent reform,” Woodward said.

“We have been fobbed off because we have been told we have to wait another two years for more research to be done. There has already been endless research done.

“The problem has already been well documented and the solution is simple.”

Woodward said the #fixfundraising coalition was ready to work with governments on the detail of the reform wording and any concerns.

“This is a report to ministers… now it is up to ministers to consider it in the light of the strength of the submissions and the long-standing nature of this concern and recognise that this is not a small sector this is an absolutely crucial sector for Australia and it needs to have its concerns elevated and not pushed to priority number three,” she said.

“We would be urging ministers that they now have an opportunity to go further than this report does and the ball is in their court.

“There has been leadership from Victoria in this regard and we would urge other ministers to see that this is an opportunity to see that very small amendments and a small amount of work now and this problem could be fixed and the state’s red tape could be repealed.

“The risk of waiting longer is that there continues to be confusion and non compliance.”

Woodward acknowledged that fundraisers had come some way because in the initial discussion paper there was no mention of fundraising.

“Now at least we have been elevated to the report’s opening preface and some recommendations,” she said.

“The [sector’s] response has been so clear, united and strong that they have been forced to acknowledge us. What they haven’t acknowledged is that they could actually take action now.

“It certainly doesn’t need a major research project in two years time.”

The Australian Institute of Company Directors, which supported the #fixfundraising campaign said the report was a “lost” opportunity.

AICD general manager advocacy Louise Petschler said: “A real opportunity to reduce red tape for charities stands to be lost unless ministers take action to provide legislative certainty about the application of the ACL to all fundraising activities.”

The Fundraising Institute Australia (FIA) said the report highlighted the problem as “due to a lack of specific guidance and limited case law in the fundraising context particularly in relation to ‘pure’ donations without any supply of goods or services.”

FIA CEO Rob Edwards said in a statement: “The report went on to nail the concerns FIA has identified in its submissions to the ACL review, particularly as they may have tax implications.

“The sector can face difficulties in translating the provisions from the ‘consumer and supplier’ context to the ‘donor and fundraiser’ context.

“FIA has emphatically argued that donors and consumers are not the same. Donors make a gift and expect nothing in return; with consumers there is value exchange between buyer and seller and therein lies the problem in trying to treat them the same legally. We are pleased that argument has hit home with the review.”

Consumer affairs ministers have until August 2017 to decide their response to the ACL review.