Fundraising changes welcomed, questions remain over practicalities
20 February 2023 at 3:36 pm
The sector is praising charities minister Andrew Leigh’s announcement of nationally consistent fundraising laws, but enacting the much-needed change is in states and territories’ hands.
The federal government’s recent move to establish consistent fundraising rules across Australia is being praised by the not-for-profit sector, but questions still remain as to how the reforms will be enacted.
Streamlining regulations and installing fit-for-purpose fundraising principles is critical to the effectiveness of charities, potentially saving the sector up to $1 million a month in compliance administration costs, and it’s now in the hands of states and territories to roll out the changes.
While there’s an agreement to release an implementation plan by July this year, there’s no guarantee as to the rollout in each participating jurisdiction.
Speaking to Pro Bono News, assistant charities minister Andrew Leigh said he is encouraging all states and territories to “make it super simple”.
“I’ve spoken to many of my state and territory counterparts about the challenge and about the necessity for the sector [in] making it as simple as possible,” said Leigh.
“By July this year, each participating jurisdiction – so that’s everyone except the Northern Territory, which doesn’t have specific laws that govern charitable fundraising – will have to release an implementation plan, which will show how it’s going to give effect to the principles. In some cases, that will be legislation. In some cases, there will be regulatory changes.”
Under existing legislation, charities that want to raise money online are required to apply for a fundraising licence in each state and territory where the donation drive may be accessed.
This means charities need to comply with seven sets of fundraising laws, many of which were developed before the internet, creating an over-regulated, burdensome and costly system.
“The states are all acutely aware of the problem that’s caused this desire [for] the reforms, which is the excessive paperwork burden on charities who want to raise money online,” continued Leigh.
“We know that complying with the current laws is costing Australian charities more than a million dollars a month. That’s money that’s not going towards good causes, like supporting the arts, protecting the environment, looking after the vulnerable. We need to ensure that there’s less money going to doing duplicative paperwork, and more money going where it’s needed.”
While the reforms signal less administrative burden on charities, Leigh added that more is being done to make the fundraising regulation system as a whole less complicated.
“We’re also doing work to harmonise other aspects of fundraising regulation. So having a uniform definition of charity across the states and territories; a voluntary code to improve the transparency of charitable donations; and a cross-border recognition model so the charities who are registered with the ACNC are automatically deemed charities in all jurisdictions.
“It just brings a greater level of simplicity to the system.”
How the sector #FixedFundraising
The not for profit community legal centre was supported by a coalition of eight peak bodies, including ACOSS, CCA and Philanthropy Australia, which together released a joint statement on fundraising reform calling on the government to provide nationally-consistent and updated regulations.
Justice Connect CEO Chris Povey said the reform was a “historic moment for Australia’s vital charity sector”, but called it out for being “long overdue”.
“For over a decade, we have called for harmonisation of fundraising laws in more than 20 separate submissions to governments, inquiries, and commissions, using data and evidence from our work advising thousands of charities to shine a light on how fairer laws will positively impact the charity sector,” said Povey.
“Thanks to our combined efforts, this decision means 60,000 Australian charities will be freed up from debilitating red tape and able to focus on delivering vital services, like helping communities affected by floods, working to prevent homelessness, tackling family and domestic violence, or delivering life-changing community services.”
#FixFundraising garnered the support of thousands of Australian charities, as well as ACNC commissioner Sue Woodward, who worked extensively to put fundraising reform on the national agenda during her time at Justice Connect before she joined on to lead the charity regulator.
“We couldn’t have a better person heading the ACNC on this issue than Sue Woodward, who has really been spearheading the Fix Fundraising campaign during her time at Justice Connect. Sue is very aware of the importance of getting the harmonisation process right and I’m sure will provide whatever support is needed,” continued Leigh.
A win for governance
Key peak organisations have praised the fundraising regulations for positively impacting not-for-profit sector governance.
With over 70 per cent of its membership involved in the governance of charities, the Australian Institute of Company Directors (AICD) welcomed the reform as a means to allow “charities to focus on their charitable purposes without unnecessary compliance costs”.
“Good governance has never been more important in the not-for-profit sector as organisations face ever increasing challenges and demand for their services,” said not-for-profit sector lead Phil Butler.
“[The] new principles… will make it easier for our NFPs to do their jobs without the added burden of unnecessary red tape,” he continued, adding that central to achieving this objective is timely implementation of the reform by states and territories.
Governance Institute of Australia – which has around one quarter of its members in the charity field – similarly commended the decision to streamline compliance measures, and ultimately, “fix uncertainty in the not-for-profit sector”.
CEO Megan Motto said clear guidance on appropriate fundraising behaviour will “build confidence among charities and donors, providing greater flexibility and a better use of resources”.
“The complexity of trying to navigate multiple state and territory regulations has led to an overwhelming administrative burden in the not-for-profit sector, with many involved in the work of fundraising time-poor volunteers,” said Motto.
Both organisations advocated strongly for changes to Australia’s fundraising laws, as part of the #FixFundraising coalition and signatories of the statement on fundraising reform.