How Poor Governance May Be Limiting Your Giving – And 10 Tips For Improvement
Monday, 6th November 2017 at 3:54 pm
Meeting basic governance standards doesn’t need to be difficult or expensive. Anna Draffin from ShareGift Australia offers her top 10 tips to make sure your charity is best placed to receive donations from ancillary funds – the expected and the unexpected.
Philanthropy in Australia is becoming big business. It is no longer uncommon to see news of multi-million dollar gifts across various causes.
Increasingly, these major gifts come from structured giving vehicles. According to the National Philanthropic Trust’s 2016 Donor-Advised Fund Report, donor-advised funds are now the fastest growing giving structure in the US and Australia is showing signs of a similar trajectory.
According to John McLeod at JBWere Philanthropic Services, an estimated $14.3 billion is now held within over 3,000 private and public ancillary funds in Australia. While these ancillary funds may vary in form, from community foundations to family foundations, and adopt different outlooks and styles of giving, these types of funds – private and public ancillary – are governed by similar ATO guidelines.
So it is in your charity’s best interest to ensure you proactively manage and communicate your governance requirements, for whenever and whichever ancillary fund may appear on your doorstep.
In ShareGift Australia’s case, we are a public ancillary fund. Our purpose is to distribute funds to the community. We do not offer charities grant rounds, but rather work with our individual shareholder donors and ASX companies to identify preferred charities each year (ie. one version of a donor-advised fund in action).
We have made hundreds of unsolicited, capacity building gifts to charities over the years, which has revealed a host of small, common governance issues made by charities that have unintentionally slowed down our funding to them.
Meeting basic governance standards doesn’t need to be difficult (or expensive).
Here are some simple tips to make sure your charity is best placed for receiving donations from ancillary funds – the expected and the unexpected.
- If your charity is listed on the Australian Charities and Not-for-profits Commission (ACNC) Register, make sure all fields are complete in your charity’s record – and routinely check back to update.
- Actively monitor the email address listed on your ACNC register page – and make sure it’s not sending emails to junk. You’d be surprised.
- Do include your charity’s ABN as part of your ordinary corporate information eg company name, address, telephone number. Similarly, list your charity’s ABN on your website, particularly the donation and donation payment confirmation pages. It adds immediate transparency and confidence for donors.
- Ensure your donation platform includes the option for a business or organisation to donate – not just an individual. Do not make fields such as birth dates or login profiles mandatory.
- Process payments within seven days of receipt. Larger philanthropic funders may transfer funds for distribution to a dedicated bank account for a limited period only, so processing payment more than six weeks after a donation was made, may cause delays.
- Provide automated receipting for online donations where possible, or within 24 hours. Remember only providing a receipt at the end of your operating year does not necessarily meet the reporting requirements of a potential funder such as an ancillary fund.
- Follow the Australian Taxation Office’s (ATO) recommendations for receipting tax deductible gifts – for example, the date of gift, your organisation’s name, ABN, the donor’s name and the donation amount. Again, this will assist with ancillary funds’ reporting requirements.
- Induct your staff. Remember ancillary funds are deductible gift recipient (DGR) type 2 organisations themselves, and therefore, can only distribute to organisations with DGR Item 1 status. Make sure your senior management, fundraising and finance staff all have a basic knowledge of your charitable status (eg DGR, Tax Concession Charity), and are familiar with the ABN (and ACN where applicable) look-up facilities.They are a simple and effective way to retrieve current company records.
- If you use a third party donation platform, make sure it meets your charity’s compliance requirements, not just theirs.
- Mystery shop your own charity. Occasionally act as a donor and try to donate to your own charity via your website. The experience may reveal simple ways to keep improving how donors can give to your organisation.
As a sector, we have made huge progress in transparency and accountability over the past decade. Small, individual adjustments all add to this big picture of our industry’s rising professionalism while simultaneously making the fast-growing funding from ancillary funds easier.
About the author: Anna Draffin is executive director of ShareGift Australia – a public ancillary fund set up to make it cost effective for shareholders to support the community through the donation of shares to charity and grow philanthropy in Australia. ShareGift Australia recently announced the 131 recipient charities of its 2017 funding. Follow: @AnnaDraffin