Charities paying for access – Never okay? Or a necessary evil?
16 December 2020 at 4:59 pm
Charities are being warned to steer clear from paying to attend political functions amid concerns this could put an organisation’s reputation at risk
Gaining access to government decision makers can be difficult for charities, but is it ever okay for them to pay to get in a minister’s ear?
A recent report from Michael West Media alleged that several charities have donated money to the NSW Liberal Party over the past three years though buying tickets to political fundraisers or dinners.
This isn’t a new phenomenon. RSL Lifecare also faced scrutiny in 2017 after it was revealed it attended 16 Liberal Party functions from 2008 to 2016, with the charity admitting these were political donations.
These events see organisations pay hundreds – and often thousands – of dollars to get a seat at the table and enjoy unrivalled access to politicians, political advisers and senior government officials.
Corporates often use these “pay for access” opportunities to try and influence policy decisions and build a stronger relationship with governments.
As a 2018 Grattan Institute report noted, “time with ministers and their shadows is explicitly ‘for sale’ at fundraising dinners”.
But while this is seemingly accepted in the corporate sector, is it okay for charities to partake in this practise?
It is hard to know how common this is for charities, because the federal disclosure regime for political donations is high which means that income from fundraising events is often not disclosed.
Regardless, some sector leaders argue it is getting harder for charities to gain access to decision makers and that these “paying for access” activities may be increasing.
This poses a number of questions for the sector.
Is this legal for charities?
In most cases, yes. According to the Australian Charities and Not-for-profits Commission (ACNC), the key concern is around an organisation’s purpose.
Charities must ensure they have a charitable purpose that is for the public benefit and that they are undertaking activities that further that purpose.
ACNC guidance warns that charities attending political party fundraisers risk “being found to have a purpose of promoting a political party or candidate”.
But an ACNC spokesperson told Pro Bono News that while a charity may have a disqualifying purpose if its purpose is to promote a particular political party or a candidate, attending a single political event is unlikely to put its charitable status at risk.
“To determine the ‘purpose’ of a charity, the ACNC will look at the charity’s governing rules, its activities, any material published by the charity, and any other relevant matter,” they said.
“A once-off activity is unlikely to demonstrate a purpose of promoting or engaging in that activity.”
Is it unethical for charities to attend these events?
While they may be able to get away with it legally, sector leaders have still cautioned charities against attending these kinds of “pay for access” events.
Save the Children deputy CEO Mat Tinkler, who is also the charity’s director of policy and international programs, said charities need to be very careful about how they spend their money.
“Charities have to walk a very fine line here between staying consistent with their charitable purpose and making sure that any funds they’ve raised go to that purpose,” Tinkler told Pro Bono News.
“[When it comes to] paying for access, there’s a range of guidance material and regulation… that suggests it’s generally a bad idea.”
Australian Council of Social Service CEO Dr Cassandra Goldie told Pro Bono News there were broader implications for the sector if charities were seen to have a political bias.
“Aside from the legal risk, charities also risk reputational damage from donating money to candidates or political parties,” Goldie said.
“Charities should be fiercely independent of partisan politics, and donating money to [candidates or parties] places that independence at risk.”
Andrew Leigh, the shadow assistant minister for charities, agrees that this “doesn’t pass the sniff test”.
He told Pro Bono News that he was “not aware” of any instances of Labor accepting money from charities to attend ALP fundraisers, and said he did not believe the party should be accepting donations from charities.
The Assistant Minister for Charities Zed Seselja declined to comment on the issue when contacted by Pro Bono News.
Is it a necessary evil?
Some sector figures are more sympathetic to charities attending “pay for access” events.
David Crosbie, the CEO of the Community Council for Australia, said charities often sought to interact with politicians, their advisers and senior government officials when seeking policy change.
He told Pro Bono News that with some governments it was very difficult to set up meetings with ministers or gain access to decision makers, especially in today’s “more hyper-partisan political environment”.
“At an ethical level, charities may not like having to contribute to a political party to gain access to a government minister, but if other avenues have been tried and failed, it is understandable that a charity might choose to pay for access,” Crosbie said.
In his experience, it has become more difficult to influence government from outside the walls of parliament through traditional advocacy channels.
He noted the increasing use of insiders, lobbyists and consulting firms, and the subsequent need for some charities to attend party political events in order to gain access.
“This is not new, but the extent of these types of ‘paying for access’ activities may be increasing,” he said.
“The bottom line is that each charity needs to think carefully about its purpose and mission, how best to influence government decisions, what other avenues have been tried to gain access and exert influence, and whether paying for access is the best available approach available to that charity at that time.”
Crosbie added that charities choosing to attend a political fundraiser must ensure they have a clear decision trail about why they have made that decision.
“Importantly, these considerations need to be documented, and provided they are, paying for access to decision-makers may be the most appropriate action available for a charity in pursuing its mission and delivering positive change in the communities they serve,” he said.
Another person who understands the difficulties charities face meeting with government is Neil Pharaoh, a government engagement expert who has worked across social purpose, government, public policy and advocacy organisations.
Pharaoh told Pro Bono News that charities were struggling to find their voice in an increasingly competitive government landscape.
“And so lots of them are now turning to less than conventional means in order to ensure that their voice is heard and that they can adequately be represented by government,” Pharaoh said.
“I can’t begrudge them, I think it’s becoming a necessary evil, I just wish that they were using other ways of doing it.”
What can charities do instead?
Pharaoh argues that charities don’t need to pay for access if they have a proper government engagement strategy in place.
He said a good governance engagement strategy should investigate how an organisation’s messages are articulated, and could help charities work out what they want from government.
This is also an approach favoured by Tinkler and Save the Children, which maintains government relations staff whose job it is to support the charity in accessing governments and politicians.
Tinkler is no stranger to the inner workings of Canberra himself, having previously worked as chief of staff for Bill Shorten during the Rudd/Gillard years.
He said he did not perceive any issues for charities accessing ministers during his time working in a political office.
“Indeed in my experience, politicians often put a premium on the advice coming from the not-for-profit sector, because they know it’s not a vested interest chasing a commercial gain at the end of the day, it’s an interest pursuing a charitable mission,” Tinkler said.
He said investing in a strong government relations team was the best way to make sure that your organisation’s voice was heard in the corridors of power rather than attending party fundraisers.
“I don’t think you need to pay to get access to ministers if you have the right staff with the right understanding of how the political and government systems work,” he said.
“That way you can position yourself and develop relationships so you get a fair hearing from government ministers and bureaucracies.”
Does something need to be done about this issue?
Opinions are mixed about whether reform is needed in this area, given it is generally agreed that this practice is not widespread across the sector.
Tinkler believes more clarity in the guidelines from the ACNC and peak bodies could be helpful, while Goldie said the issue highlights the importance of creating policymaking processes that are transparent, and that enable community groups to access policymakers without the need to attend fundraisers.
“During the current health and economic crisis, it is even more important that organisations representing the most disadvantaged and marginalised people in our society have access to policymakers,” she said.
“Even before COVID-19, public debate in Australia was heavily influenced by well-resourced interests. These powerful voices often dominate, and communities and groups affected by poverty, disadvantage and marginalisation can sometimes struggle to be heard.”
This view is shared by the Australian Conservation Foundation (ACF) democracy campaigner Jolene Elberth, who bemoaned that charities were competing with corporations spending huge sums on lobbying and political donations to get access and sway decisions in their own private interests.
She told Pro Bono News that the real problem was that some elected representatives saw fit to sell access through these events when they should really be prioritising meeting with the charities representing vulnerable members of the community.
ACF is calling for ministerial diaries to be published in every jurisdiction so Australians can see whether politicians are meeting more with business interests or with community voices.
The Grattan Institute also recommended this in its 2018 report, arguing this would encourage ministers to seek out a wider range of views.
Some in the sector believe there needs to be reform in the multibillion-dollar Australian lobbying industry, which is a space Pharaoh said many charities were now engaged in.
Pharaoh said it would be unfair to ban charities from paying for access when many businesses do it as well and claim tax deductions.
He would like to see this kind of lobbying more heavily regulated but in a way that affects businesses and charities equally.
“It would be really unfair to hobble not for profits but not hobble businesses with the same regulatory burden,” he said.
“I prefer a charity to be doing it than a business, but in a broader sense, I don’t think it should be tax deductible in any stretch of the imagination as it is for business.”
The Grattan Institute said lowering the federal disclosure regime for political donations – which was $14,000 for the 2019–20 financial year – down to $5,000 would make income from fundraising events much more visible.
This would shed light on just how prevalent this issue is in the not-for-profit sector, and allow Australians to make up their own mind on whether they want to support a charity that sees this approach as the best way of pursuing its mission.