Fears For International Philanthropy Rise as Foreign Donations Bill Looms

Comments from the special minister of state confirming the government’s intention to ban charities from receiving foreign donations have ramped up fears from the charity sector that the proposed foreign donations bill could shut the door on overseas philanthropy.

The government is seeking to prevent foreign parties from influencing Australian elections through donations to political parties, as well as third parties.

Speaking on Radio National on Thursday, Senator Scott Ryan told journalist Patricia Karvelas that the government would be banning all political expenditure, not just political parties but other foreign campaigning which included charities.

“This will be in Parliament by the end of the year. I made that commitment earlier, it is a target we will meet,” Ryan said.

“The reason it is a complex bill is that we’ve committed to ensuring that there is no foreign money in Australian politics, not just political parties but other foreign campaigning.

“We can’t have a situation where one TV ad is paid for by foreign money, just because it is not paid for by a political party. And so balancing with the legitimate right of those who get involved in politics in other ways is very technical, but it will be in Parliament in the last sitting fortnight if not released earlier.”

Ryan has still not confirmed details of the bill, which is currently being drafted, but said the ban would prevent all foreign donations funding political expenditure in Australia as covered by the electoral act.

It marks the first time the senator has confirmed the government will be banning charities from receiving foreign donations.

Ryan told Pro Bono News the Turnbull government believed it was important that only Australians and Australian entities directly participated in our elections.

“I have publicly stated on a number of occasions that I will introduce legislation to ban foreign donations before the end of the year,” Ryan said.

“There is broad consensus across the Parliament – and across the community – that foreign donations should be banned.

“I have made clear that a ban on foreign political donations will apply equally to all political and campaign expenditure. The ban will not create loopholes for foreign money.”

He said the proposed ban on foreign donations would not stop registered charities from being allowed to engage in political campaigning or “issues” advocacy.

“Under the Charities Act, registered charities are permitted to engage in political campaigning and issues advocacy. This was reiterated by Australian Charities and Not for Profit Commission assistant commissioner Murray Baird at Senate Estimates in October. The proposed ban on foreign donations will not change this,” he said.

However some in the not-for-profit sector have raised concerns that the changes would cut charities off from an important source of funding for advocacy activities.

CEO of the Australian Council for International Development, Marc Purcell, told Pro Bono News the minister had increased fears that the government intended to press ahead with “a measure that will erode charities’ ability to speak out on behalf of communities and limits international philanthropy that helps Australian charities pursue their mission”.

“To create catch-all regulation on the basis that politicians and charities are one and the same is mistaken. There is a categorical difference between politicians who pull the levers of power and charities who advocate on issues on a non-partisan basis,” Purcell said.

“The advocacy work charities are permitted to undertake is already set out in Charitable and Electoral law, and the statutory regulator – the Australian Charities and Not for Profits Commission – has powers to investigate and impose penalties for wrongdoing.

“Registered charities cannot endorse parties or political candidates and must stick to their charitable purpose when it comes to advocacy.”

ACFID was part of a consortium of charities that issued a position paper in August calling for charities registered with the ACNC to be exempt from any such legislation.

Purcell said it was clear from dissenting reports to the Joint Standing Committee on Electoral Matters and comments in the media that there was broad opposition to the measure in Parliament.

“Working alongside a coalition of charities, we will continue to argue for the rejection of this measure which will deny vital charitable resources for Australia and will raise awareness of its impact amongst the community,” he said.

His comments come after Greens leader Richard Di Natale told the ACFID conference last week that the Greens would use their numbers in the Senate to try to exempt charities from any ban on foreign donations.

Meanwhile, shadow minister for charities and not-for-profits Andrew Leigh told Pro Bono News the Liberals must “cease their war on charities”.

“For the Australian public, only doctors and police are more trusted than our charities. If the Liberals cared about charities as much as the Australian people do, they would get on with fixing fundraising, removing duplicate reporting requirements, and strengthening the charities commission,” Leigh said.

“Alas, Malcolm Turnbull’s team seems to get out of bed every day thinking how they can make life harder for our charities. The Liberals’ attacks on the charities commission have prompted two open letters from the sector. Many in the Liberal Party want to stop environmental charities from advocating on policy. And now the Liberals want to hamper charities that receive overseas donations.

“The Liberals must cease their war on charities and start backing the organisations that are trying to make the world a better place.”

Krystian Seibert, advocacy and insight manager at Philanthropy Australia said it was important for charities to be able to receive overseas support.

“Philanthropy is growing in Australia but we still make up a relatively small slice of global philanthropy, so it’s important that Australian charities can also tap into support from overseas philanthropic foundations to fund their work,” Seibert told Pro Bono News.

“This may include seeking funding for non-partisan issues-based advocacy activities, because the root causes of our most complex social and environmental challenges can often only be addressed by influencing and changing government policy.”

He said Philanthropy Australia called on the government to re-think the proposal.

“We’ve worked with the government on a number of positive initiatives to grow philanthropy in Australia, and we value their stated commitment to grow philanthropy,” he said.

“Unfortunately this particular proposal from the government goes against this commitment, as it will shut the door on overseas philanthropic foundations which want to support issues based advocacy activities by Australian charities.

“Philanthropy Australia is therefore asking the government to re-think its proposal, because when it comes to banning donations from overseas, it just doesn’t make sense to treat Australian charities in the same way as political parties.”

Community Council of Australia CEO David Crosbie told Pro Bono News it was important the contribution of charities to the formation of public policy was not collapsed into the same category as those participating in public policy seeking personal gain.

“From a charity perspective, it appears the most powerful players in forming national policy tend to be those with a vested economic interest,” Crosbie said.

“These groups are not subject to any controls or reporting in the same way as charities are to the ACNC around political activity. These groups generally also have the resources to make their political views and interests clear, and to present them in a compelling way, regardless of any laws about political donations.

“Current moves to restrict the advocacy activities of charities that receive foreign donations or international philanthropy, to review the tax deductibility of environmental charities that engage in advocacy, to change the purpose of the ACNC so it becomes more active in restricting the advocacy of charities, are all collectively creating significant concern amongst charities that their voice is being silenced.”

Crosbie said the suggestions government would ban international philanthropy seemed “absurd”.

“CCA cannot see any benefit in the Australian parliament telling Bill Gates that his $25 million plus of international donations to medical research in Australia is not welcome. Similarly, CCA cannot see any benefit in restricting the universities that benefit from this international philanthropy participating in any way in advocacy during an election period,” he said.

“CCA struggles to see what the problem is that the government is trying to solve through this sledge hammer approach that will impose onerous new red tape and compliance on the charities sector.

“Even more fundamentally, CCA fears any move by governments seeking to silence any potential critics. The contest of ideas should be robust. Debate during election periods should not be curtailed during election periods. The more community groups engage in advocacy, the stronger our democracy is.”