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Money talks

20 August 2020 at 8:24 am
David Crosbie
With pre-budget submissions closing in five days, David Crosbie makes the case for why all charities should make a submission and shares the 10 key recommendations the Charities Crisis Cabinet will be making to government.

David Crosbie | 20 August 2020 at 8:24 am


Money talks
20 August 2020 at 8:24 am

With pre-budget submissions closing in five days, David Crosbie makes the case for why all charities should make a submission and shares the 10 key recommendations the Charities Crisis Cabinet will be making to government.

A federal budget is the single most important policy document any Australian government produces. Unlike the usual government policy statements, announcements, declarations of support, and agreements to address issues, the federal budget tells voters exactly who the government will or will not be supporting. Money may not be everything, but when it comes to government commitments, the federal budget translates into “show me the money”. 

Pre-budget submissions close in five days, and I know many charities are finalising their submissions in the hope that they may be able to influence where the government chooses to invest tax-payer funds over the coming years. I would encourage all charities to make a submission, even if it is just a letter supporting several measures they would like to see implemented. It may be that what is being asked for in a submission is unlikely to be delivered by the government, but that should not stop charities presenting the best case they can in support of their budget recommendations. Making submissions to the pre-budget process should not be limited to business and industry groups. If charities want a seat at the big national policy tables, they also need to take the opportunities afforded them by government to provide their views.

It is within this context that the Charities Crisis Cabinet is currently finalising a pre-budget submission. There are 10 key recommendations within the submission. Some charities have already chosen to include these recommendations in their own submissions. All these measures would offer significant benefit to charities and the communities they serve across Australia.

  1. Provide a ramp rather than a cliff as JobKeeper ends.

Charities employ over 1.3 million staff and contribute more than 8 per cent of GDP. The Australian government has provided invaluable support through JobKeeper to thousands of charities and their staff across Australia. JobKeeper is likely to have already saved over 100,000 charity jobs. Providing a transition phase for charities receiving JobKeeper payments so they can better adapt to post COVID-19 requirements will enable more charities to survive and serve their communities.

  1. Encourage more giving by providing increased tax deductibility for donations to charities.

Increased community engagement and philanthropic contributions to charities produce a net benefit to governments as well as to the communities charities serve. Providing one off incentives for philanthropy and social investment is not unusual in some countries and provides an important stimulus to giving at a time when fundraising revenue is likely to be diminishing.

  1. Make it feasible for charities to establish fundraising initiatives quickly and efficiently by removing dysfunctional red tape fundraising regulations and creating a national registration process through existing regulators the Australian Charities and Not-for-profit Commission (ACNC) and the Australian Competition and Consumer Commission (ACCC).

Governments across Australia have established a dysfunctional time-consuming dog’s breakfast of state and territory regulations to effectively stymie even the smallest charity seeking to run an online fundraising campaign. Now, as many charities are forced to pivot to online fundraising, it is critical that the government fix this major barrier to Australian charitable fundraising.

  1. Subject to strong performance, ensure greater certainty in government contracts by locking in existing payments and extending contracts wherever possible.

One of the greatest barriers to investment in improved productivity and effectiveness across the charities sector is lack of certainty. Many government departments – including at a federal level – have been willing during COVID-19 to provide greater certainty to charities that receive government funding by extending funding and support. The practice of extending existing contracts for longer periods – preferably at least three years – is to be commended and broadened. 

  1. Allow greater flexibility in government funding to charities and not for profits to respond to the emerging needs in their communities.

During COVID-19 and beyond, it is in everyone’s interests to offer much greater flexibility in applying the terms and performance requirements of Australian government contracts with charities. This flexibility should include acknowledgement that COVID-19 has increased the demand for many services provided by charities and government resources need to reflect that increased demand.

  1. Invest in a one-stop shop registration process to enable volunteers to be registered and insured more quickly without the red tape of multi-jurisdictional compliance.

ANU and Volunteering Australia research indicates two thirds of all volunteers have reduced their volunteering behaviour because of COVID-19. There are many barriers to returning volunteers and new volunteers including the need for new insurances and COVID-19 specific responses such as infection control training. This is compounded by the need for police checks and working with children clearances often across multiple jurisdictions. Now it is more important than ever that these barriers are minimised by streamlining the registration, background checks and insurance requirements. 

  1. Support initiatives to unlock new sources of capital for charities including underwriting medium-term loans schemes and impact investment options that will enable charities to smooth out inconsistent income streams and invest in their future.

Philanthropy Australia and Impact Investing Australia have both proposed innovative ways to boost the capital available to charities across Australia with minimal investment from the Australian government. These proposals include a medium-term low interest loan scheme with first loss risk underwritten by philanthropists, and the creation of an impact investment fund. Both are strongly supported.

  1. Provide transformational funding to charities in critical areas such as information technology, energy efficiency, collaboration, measurement of impact, research, staff development and other productivity focused areas.

There is a need for a government-backed transformation fund to enable charities to adapt to post COVID-19 requirements in the ways they operate and serve their communities. Part of this measure is to support more timely and informative research into exactly where the charities sector is in terms of responding to COVID-19 and the challenges of continuing to serve communities when needs are changing and new ways of meeting those needs have to be developed and applied.

  1. Provide targeted funding and support for those struggling to fully participate in our communities and our economy, including ensuring people receiving JobSeeker are not locked into poverty.

The Charities Crisis Cabinet supports maintaining a high rate of JobSeeker payments and a more needs-based approach in the provision of support to marginalised communities including the unemployed, refugees and international students. 

  1. Increase philanthropy by enabling employers to establish more effective “opt out” systems of workplace giving. 

Workplace giving programs in Australia are currently operating in less than 4 per cent of Australian workplaces. If this could increase to 10 per cent of Australian workplaces by adopting the well-established “opt out” processes applied in some other countries, it would generate at least $250 million in additional donations to charities.

Charities have an opportunity to make their voice heard in this upcoming federal budget process. 

Over the next 12 months and beyond, charities and not for profits want to be part of the solution, part of rebuilding our communities and boosting our economy. 

The measures proposed in this pre-budget submission go some way towards realising the significant potential of charities to be a key driver of social and economic recovery across Australia.

David Crosbie  |  @DavidCrosbie2

David Crosbie is the CEO of the Community Council for Australia (CCA).

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