Effective Charity Involves a Balancing Act

At a time when our society feels out of balance, Australia needs charities which are not only effective but also confident in who they are, writes Krystian Seibert.

In many ways our society currently feels out of balance. Our political debate is polarised, with people losing confidence in our political leaders. On social media, many don’t feel that rules of common decency apply as they tweet rudely at each other. It feels as if the spirit of cooperation in our society is withering, as we struggle to face up to the challenges we need to confront.

Australian charities, in all their diverse forms, have an important role to play at all times, but it’s a particularly vital role in a time like this. Charities are organisations built around the principle of people and communities coming together to cooperate and build a better society. They are organisations built for the times we are living in now.

But that said, it’s all the more important that charities themselves don’t lose their balance. Their impact is, in many ways, dependent on how skilfully they keep this balance, and it’s not always an easy task. If you’re struggling to understand what I mean, here are a few examples.

Advocacy is part of the DNA of Australian charities, and is an essential element of how charities address the root causes of social and environmental problems. In Australia, advocacy in furtherance of a charitable purpose is itself charitable, but advocacy which involves supporting political parties or candidates is not. The law encourages charities to be strong advocates but stops them from becoming partisan political actors. Without these limitations, people would understandably start to question whether some charities serve the public interest or the interests of particular political parties or candidates. Trust would wane, and charities would find it harder to make an impact.

The ability of charities to freely advocate in Australia is currently being challenged by a number of concerning Australian government proposals. These are flawed proposals which will stifle the ability of charities to serve the public interest. In the United States, a different debate is underway, as the Trump Administration seeks to make good on an election commitment to repeal the so-called “Johnson Amendment”. The effect of this would be to broaden the kind of advocacy charities can undertake, permitting them to support political parties and candidates.

Charities, foundations and others are strongly opposing this move because of the harm it would do to the standing of the sector. When it comes to advocacy – balance is important.

The “impact imperative” is a key focus for Australian charities. Change isn’t linear and many of the social and environmental problems charities confront are wicked in their complexity. But there is pressure to know that we’re shifting the dial. Impact measurement is rightly an increasingly important priority for charities, as well as their funders. But our approaches to measurement must reflect the complexity of the challenges we seek to address, and we must be careful that we don’t become focused on flawed and simplistic approaches.

An insightful article in the Sydney Morning Herald last week warned of the harmful impacts that the “cult of the KPI” can have. It mentions the Tyranny of Metrics, a compelling new book that explores the problems with many modern approaches to quantifying performance. The focus on metrics is strong in Australia as it is elsewhere, and governments increasingly talk about “pay for performance” as a new way of contracting with charities. We must be careful to ensure that metrics help charities make an impact, and not the opposite. When it comes to impact measurement – balance is important.

Charities occupy a place distinct from government and business. But this distinctness is something which must be cultivated. As part of the “new public management” revolution, many charities are active in service delivery and in doing so, play an important role helping to address disadvantage and support social inclusion. However, an excessive reliance on government funding can lead to mission drift and make it harder to be responsive to community needs. That is why many charities are looking to diversify their funding sources.

At the same time, there’s a tendency amongst some to think that businesses “do it better” than charities, and that in order to be more effective, charities need to be more like businesses. It’s certainly true that organisations in different sectors can learn from each other, and the two-way exchange of people, ideas and approaches between business and charity is worthwhile. But charities are not businesses, because if they were they would lose their primary focus on public benefit as opposed to private gain. Charities should learn and share, but they can’t lose sight of who they are. When it comes to the relationship that charities have with business and government – balance is important.

These examples illustrate how effective charity involves a balancing act. Charities need to be advocates, but we don’t want them to be partisan because it could jeopardise the trust the community places in them. Charities need to measure their impact, but we don’t want them to be so focused on measurement that they are led astray. Charities should engage with government and business, but we want this engagement to enhance their work rather than challenge their core identity and purpose.

This balancing act can lead to some interesting discussions around charity board tables and can inform the broader policy and regulatory framework within which charities operate. At stake is the essence of who charities are and what they do. And that essence is important because of the times we live in.

At a time when our society feels out of balance, Australia needs charities which are not only effective but also confident in who they are. As independent organisations focused on the public benefit, they have a vital role to play as bridge builders, voices of conscience and agents of change.

About the author: Krystian Seibert is an Industry Fellow at the Centre for Social Impact at Swinburne University of Technology and has a strategic advisory role with Philanthropy Australia.