Charities regulator finds bushfire charities acted responsibly during disaster

Over $640 million was directed to charities to help affected communities during this year’s summer bushfire season 

Charities on the frontline of the summer bushfire season acted “legally and responsibly”, according to an Australian charities commission investigation looking into concerns around the speed donations were reaching affected communities. 

The review, publicly released on Saturday, focused on the Australian Red Cross Society, the Trustee for NSW Rural Fire Services and Brigades Donations Fund (NSW RFS Trust) and NSW Wildlife Information Rescue and Education Service Incorporated (WIRES).

All three charities received substantial donations, attracting attention and generating high public expectations around how quickly donations reached affected communities.

Normally reviews by the Australian Charities and Not-for-profits Commission are not made public, but the commission said the results were released with the organisation’s permission “to aid public understanding of charity operations and maintain public trust and confidence in the sector”.

The review found the charities acted legally and responsibly, allocating funds to bushfire response programs and their delivery, and protecting donations from fraud.   

“The charities balanced immediate relief with the need to supply funds for the long-term recovery phase,” the review said. 

It’s not to say the charities didn’t face difficulties during this period. Changing demand and donation levels, difficulty identifying legitimate fire victims, combating fraud, and third-party fundraising efforts that meant charities could not control messaging to the public leading to confusion amongst donors, were all highlighted as major challenges in the review. 

This was exemplified Celeste Barber’s Facebook fundraiser for the NWS RFS Trust, which attracted over $51 million in a matter of days leading to calls from donors for the money to be split across multiple charities and states.   

A Supreme Court ruling later found that the funds could not be divided because the deed governing that trust only allowed money to be spent on purchasing and maintaining equipment, training and administrative costs.

Criticism unfounded

Dr Gary Johns, the ACNC commissioner, said that the criticism charities copped around withholding funds and not distributing them properly was unfounded, and that the public should be assured that charities could only use charitable funds for charitable purposes. 

“Donated funds are ‘charitable funds’, as is any interest they earn, and legally charities can only use their charitable funds to deliver their charitable programs,” Johns said.

“In emergency situations it is not always possible for charities to begin delivering programs immediately because they need information and time to plan how to maximise their impact.”

Blake Tierney, the executive manager of regulatory affairs and policy at the Fundraising Institute Australia, told Pro Bono News that they were pleased to see the positive outcomes of the reviews. 

“It is hard when people want to see immediate results after a disaster, but charities must conduct due diligence to get the money to the right people and places,” Tierney said. 

“Most charities adhere to strict policies on this. These charities, having many years of experience to draw upon, are incredibly well-versed in administering funds for disaster relief.”

“Running a charity costs money”

While the percentage of donations directed towards administration and running costs instead of fire-affected communities was an issue of concern during the disaster relief, Johns said that it was important to note that running a charity costs money. 

“Running a charity costs money – it requires infrastructure and staff to deliver programs,” he said. 

“There is no benchmark for charities’ administration costs because it is not a reliable measure of effectiveness. Focusing on what a charity achieves gives a better understanding of its work than financial information alone.”

See the reviews in full here.