Centralised disaster fund dismissed by charities sector

“Someone would still have to foot the bill of admin costs,” sector representatives say 

The charities sector has hit back at calls for bushfire donations to go to a “centralised” fund instead of people donating directly to big NFPs, with sector experts saying there would be little difference to how donations reach bushfire victims.

On Friday, former Victorian Premier Jeff Kennett AC told 2GB Radio that fire relief donations should be placed in a centralised trust where it could be audited and administrative costs could be reviewed.  

“The government needs to work out that when people give money it’s got to be put into a fund which can be accountable, where it can be audited so the money gets to the people who the money was given for,” Kennett said. 

He said he feared a lot of what is received is being eaten up in administration costs and that the money was being spread too thin around online fundraisers hosted on platforms such as GoFundMe and Facebook.  

“I just don’t want to see people’s money dissipated,” he said. 

But Andrew Coghlan, Australian Red Cross national manager of emergency services, told Pro Bono News it didn’t make sense to take this job away from large charities that were experts in running disaster relief efforts. 

He said it was important to recognise that there was a cost involved in collecting donations and then distributing it, and that cost wouldn’t go away if all donations were sent to a centralised fund.

“Even if you set up some sort of central pool to manage and distribute funds, somebody would still have to cover the cost of managing that process,” Coghlan said. 

“Someone has to pay for that, whether that be government or a corporate entity or whoever fits the bill to cover that cost.”

Disasters are complicated 

With the bushfire recovery efforts widespread and not showing any sign of slowing down anytime soon, a spokesperson for the Australian Charities and Not-for-profits Commission told Pro Bono News it required multiple agencies.      

“Responding to disaster is a complex task requiring both short- and long-term efforts,” the spokesperson said.  

“The scale of this disaster across states and affecting people, wildlife and communities requires a multi-pronged, multi-agency approach. 

“It is important that a wide range of charities with vast expertise and experience, from humanitarian aid to animal welfare, are able to provide services to people in need.”

Coghlan said because of the complex nature of disaster relief operations, where the money needed to go was not “always obvious in the first week”. 

“Charities are often in a position of balancing getting money quickly, which is really important to meet immediate needs, with managing it [money] responsibly for the long-term relief effort,” he said.  

“Understanding the depth of need for some individuals will only become apparent a little bit further into the recovery process.”  

Laws and regulations in place

Coghlan also noted that there were strong rules and regulations around how charities handled donations.     

“There is very strong and solid charitable law in place and the Australian Charities and Not-for-profits Commission and the Tax Office monitor and audit these things very closely,” he said. 

“It’s important to recognise that this stuff doesn’t happen randomly.” 

The ACNC spokesperson added it was a requirement for charities to use their funds for their charitable purposes, and if there was any evidence of wrongdoing, the regulatory body would investigate.  

“Charities must have, and operate according to, governing rules that outline how they operate and how they can use funds,” the spokesperson said. 

“As part of their obligations to the ACNC, charities must report information to the ACNC, including financial information.” 

It follows comments made by NSW transport minister, Andrew Constance, who said he was “furious” charitable organisations were not passing along the tens of millions of dollars in donations fast enough to bushfire victims. 

“The money is needed now, not sitting in a Red Cross bank account earning interest so they can map out their next three years and do their marketing,” Constance said.     

But Noel Clement, the Australian Red Cross director of Australian programs, said the charity is planning to spend the $115 million donated since July 2019. 

“All funds raised since July 2019 will go to our Disaster Relief and Recovery Fund. This fund ensures Red Cross teams are on the ground supporting people as the fires happen (and other disasters we sadly expect to happen over the coming months) and to support individuals and communities to recover from these bushfires,” Clement said.