The Politics of Charities Receiving Donations
Thursday, 22nd February 2018 at 8:24 am
The Electoral Funding and Disclosure Reform Bill is threatening part of the funding pathway available to charities, writes Dr Steve Francis, managing director of FrontStream Asia Pacific.
It’s a contentious issue – the relationship between government, not for profit’s and the donating public. And for a few key reasons. Primarily, because much of the work carried out by not for profits is as a substitute on behalf of government, as a proxy vehicle for reducing poverty, homelessness or providing services to young people, among many other good things.
Over the last seven or so years, government funding made available for charitable services has been cut leaving some organisations defunded, decommissioned or significantly reduced. In this landscape, not for profits look to public donations, philanthropic grants and commercial business partnerships to fund their essential programs and services. Now part of this funding pathway is under threat.
Late last year, the federal Parliament introduced a bill named the Electoral Funding and Disclosure Reform Bill. The key focus of the bill was on vetting foreign donations to political parties and potentially banning those which were questionable, or banning all overseas donations to parties altogether. The argument for increased transparency in the political process is a good one. We all want to be sure government policies aren’t influenced by generous commercial donations.
There is a catch with this bill though, with some unintended consequences. The Electoral Funding and Disclosure Reform Bill has a broad and vague definition of political activity, consequently it includes foreign donations to charities and research organisations to be included in the scrutiny, which is something else entirely.
At FrontStream we are in the business of fundraising and so are acutely aware of the challenges our clients face in generating income streams from public donations. We also understand that fundraising forms only part of not-for-profit income. Any legal change to the ease of receiving donations will apply further pressure for domestic public and philanthropic organisations to fund charities and research. Will this be at the expense of the arts and other donation recipients? Or will charities start to tumble like dominoes? Foreign donations aren’t everything but the pool of funding for credible and essential service-based charities has been shrinking over the past seven or so years.
Labor MP Andrew Leigh the shadow minister for charities and not-for-profits believes the government has been waging a war on charities. He says: “The Abbott and Turnbull governments have… tried to destroy the charities commission, put gag clauses in social services agreements, attempted to shut down the ability of charities to advocate and they are now trying to extend the ban on overseas donations to political parties to also cover charities.”
Dr Gary Johns, the head of the Australian Charities and Not for Profit Commission (ACNC) has also spoken out about the proposed Electoral Funding and Disclosure Reform Bill. Dr. Johns says that the bill could increase “red tape” posting a statement on behalf of the ACNC on their website, on 25 January:
“It is our view that the bill, as formulated, will place a further regulatory burden on charities, and may inhibit their ability to advocate as a method of achieving its charitable purpose.”
It is hoped that with so much concern and opposition to the bill from key stakeholders, as well as parliamentarians, that the government will take note and make amendments, to better define and clarify “political campaigners” to exclude not for profits.
Gagging not for profits’ right to advocate and inhibiting their ability to receive donations is the worst-case scenario. Leaders in our sector are right to be concerned about the bill and speak out about it publicly.
Let’s hope the results are for the benefit of the many, at FrontStream we hope so and we will be watching closely as this is progressed by government.
About the author: Dr Steve Francis is managing director of FrontStream Asia Pacific, and is passionate about growing businesses that create social good. He has a PhD in Anthropology and has worked extensively in the not-for-profit and profit-for-good sectors for over 20 years.