CCA News - Summer 2018
I hope your 2018 is off to a good start – it promises to a big year for all in our sector.
There are several pressing issues on CCA’s agenda, that I encourage you and your Board to take an active interest in. Each could fundamentally shift the operating environment for the sector, diminish our role in public policy debate and stifle charity voices on issues important to mission and the communities we serve.
ACNC Five-year Review, new leadership and future direction
The five-year Review of the ACNC Acts appears to be framed with a strong focus on enforcement. The appointment of anti-charity campaigner Gary Johns as Commissioner in December, his focus on efficiency and using market forces to create a ‘donor market’ (published in an opinion piece in The Australian after his appointment) and the Terms of Reference themselves are not grounded in the three core objectives of the ACNC that the sector helped develop and then endorsed.
Assistant Minister Michael Sukkar has already flagged possible legislative change in areas including the definition of charity. There are clearly some parts of the current government that would like to confine charities to a more subservient role in nation-building.
The ACNC’s submission to the Review proposes two new objects that alone should be a wake-up call to every charity in Australia:
(a) To promote the effective use of the resources of not-for-profit entities; and
(b) To enhance the accountability of not-for-profit entities to donors, beneficiaries and the public.
Who are the ACNC to determine if CCA or any other charity is using their resources effectively? On what basis will effective use be judged – the views of the Commissioner? What does increased accountability mean? Who sets what standards?
In all my time working with the initial ACNC Task Force and for over three years on the ACNC Advisory Board, not one person at the ACNC ever suggested there needed to be new accountability measures or a capacity to judge the effectiveness of charities. A few days into the role and the new Commissioner is trying to scuttle the years of painstaking work to establish agreed objectives and build a credible and respected ACNC that the sector works with.
This is regulatory over-reach at its worse, driven by an ill-informed ideological campaign to limit rather than enhance the role of charities in our communities.
Despite an intense period of uncertainty, the ACNC has achieved much in its first five years. We have one of the highest compliance rates in the world, we are building an evidence-base about the sector and the ACNC is working cooperatively with Commonwealth and State and Territory governments on issues that impact public trust and the tangle of red tape affecting the sector. Yes – there are learnings – we need to address the secrecy provisions that prevent the ACNC from disclosing the reasons a charity is deregistered, for instance, but it is disingenuous to position the new objects as necessary to broaden the ACNC’s educative remit as the Commissioner has claimed. The ACNC has played a valuable educative role, working with the sector, almost from Day One. The existing objects – to enhance public trust; support a robust, vibrant, independent and innovative not-for-profit sector; and reduce red tape - were well-thought out and supported by extensive consultation. Agenda-driven tinkering is dismissive of the sector and counter-productive to building on the foundation that has been established.
CCA is preparing a submission to the Review and I encourage all in the sector to do likewise.
Electoral Funding and Disclosure Reform – not just about foreign donations
The Government’s proposed legislation to amend the electoral act (ostensibly to address foreign influence) was introduced to Parliament in December and has been referred to an inquiry by the Joint Standing Committee on Electoral Matters (JSCEM). CCA gave evidence this week.
This legislation has been lambasted by charities, civil society, philanthropy, lawyers - even the IPA – as an attack on advocacy and a strangling of community voices in red-tape. CCA Chair, Tim Costello talks to Sky News Australia:
.@TimCostello: 'We don't want foreign interference in politics, but this mostly applies to public groups like charities. Vested private, for profit interests, get a leave pass and we - who try to give a blanket to a homeless person - don't. It's ludicrous' https://t.co/OgfVP6oylZ pic.twitter.com/KmlHGAsP0N— Sky News Australia (@SkyNewsAust) January 30, 2018
CCA’s major concerns are two-fold. Firstly that the legislation will effectively invalidate the clear separation between ‘advocacy’ and ‘political activity’ that the sector (and the High Court) ensured is in our Charities Act. The Charities Act is clear that a charity cannot undertake partisan political activity (cannot make political donations, support a political candidate or hand out how to vote cards) – but – can undertake advocacy on issues in order to pursue its charitable purpose. Charities advocating on any issue that might be or become an election issue (health, housing, welfare, education etc etc) will be caught in the net.
Secondly, the legislation will impose onerous reporting and audit burdens detailing charity activity and donor funding sources; registration requirements; personal liability for nominated charity financial controllers; and, a new class of ‘allowable’ and ‘non allowable’ donors. The ACNC has made the point that the additional red tape burden will likely impact charities capacity to undertake advocacy. A swift analysis of the burden is provided by Prolegis in this Pro Bono News article and the ACNC’s submission to the JSCEM is available here, #31.
The legislation will not ban charities from public debate – just make it onerous, costly and risky to participate. It will further strengthen and entrench the bias towards the most powerful in public policy. St Vincent de Paul (Charities warn Australia’s foreign donation laws will strangle advocacy, The Guardian, 11 Jan) and Anglicare (Silencing the Poor, Pro Bono News, 23 Jan) have joined other leading charities in speaking out recently in very practical terms about how their work will be impacted. Similar electoral reform in the UK and Canada had a chilling effect on the voice of charities, leaving a hole in public debate on major social issues.
The robust exchanges during this week’s public hearings of the Joint Standing Committee on Electoral Matters made it clear that many charities may be unwittingly in breach of the current Commonwealth Electoral Act. As the Act is amended, we might expect a focus on compliance activity.
Foreign Influence Transparency Scheme Bill
Flying a little lower under the radar is the Foreign Influence Transparency Scheme Bill. If passed, this legislation will be a significant impost for charities receiving grants, donations or entering into agreements with anyone from outside Australia. We agree with the Law Council of Australia: all charities registered with the ACNC should be exempt (not just those involved in humanitarian aid as is currently proposed). Business is exempt. In evidence to the Parliamentary Joint Committee on Intelligence and Security inquiry, I said:
‘If commercial activities are carved out, why aren’t charitable activities? My reading is that, in practice, if an international company like Diageo seeks to influence our alcohol policies, that’s okay. There is no inappropriate influence there. But if the Bill & Melinda Gates Foundation gives money for alcohol research, via the Foundation for Alcohol Research and Education, they would have to register. Extending this view, pharmaceutical companies, mining companies et cetera, don’t have to register or comply, but health groups, environmental groups and others not engaged in humanitarian aid who are in any way involved in public policy would have to register.’
Both pieces of legislation – while rightly seeking to improve transparency – will inhibit the work of charities and fail to address the biggest sources of foreign money and influence in our political system. Big business, multinationals and vested interests will continue to enjoy the entrenched and privileged position delivered by their power and ability to buy access. A good analysis by Mike Seccombe in The Saturday Paper. CCA’s submission to the Joint Standing Committee on Electoral Matters is available here, and my opening statement to the Parliamentary Joint Committee on Intelligence and Security is shared in Pro Bono News.
As I said to the Parliamentary committees, Australians expect their charities to advocate for their cause and their communities. We are a better society when they do. Any impediment to the voice of charities diminishes our democracy. It is clear that if we value our role as advocates, now is the time to find our collective voice and defend our role in policy debate.
Owning our future
CCA has a busy year ahead on the policy front, and in supporting sector development. Thanks to a partnership with Life Without Barriers we will be running a series of CEO Forums on Impact Investing. Our work with Plus One (an initiative involving corporates such as Koda Capital, Minter Ellison, Macquarie, Westpac, Atlassian, CBA and others) to open free access to valuable personal and professional development opportunities for our sector’s emerging leaders is also exciting.
Creating the Australia we want
We are working on the development of a campaign to encourage charities and the greater community to be more involved in education as a way of increasing the educational attainment of all Australians and especially the marginalized – this is one of the primary outcomes of our Australia we want work. We will also be publishing a second edition of the Australia we want report – working with the Centre for Social Impact and others to track Australia’s progress against the core values our sector see as important.
Thanks and an invite
CCA’s work is made possible by the commitment and support of our members - leading charities that put their hand up and invest some precious resources in acting collectively to positively influence the future of our sector. We hope more charities will join CCA and support our advocacy and sector development work – the more members we have the more we can do.
CEO Community Council for Australia
More CCA news
Supporting flourishing communities is the way to improve productivity and wellbeing
CCA submission to the Federal Budget
CCA’s submission to the Federal Budget outlines nine measures to significantly strengthen Australia’s not-for-profit sector and drive real economic savings for government. The measures identify revenue, savings and investment opportunities to deliver stronger, fairer, more creative, sustainable and connected communities. They include extending DGR status to all registered charities (staged approach); injecting capital into the sector and encouraging philanthropy via a targeted estate duty, implementation of the French 90/10 rule to allow super funds to invest in social enterprises and ‘opt out’ workplace giving; a Social Finance Taskforce; development of a blueprint for the future of the sector; support for the ACNC; a review of tax concessions to gaming, catering, entertainment and hospitality income for mutual organisations, particularly licensed clubs; and a boost to sector investment and productivity by increasing certainty in government funding, concessions, incentives and regulations.
Australia cannot afford to ignore growing levels of debt, increased inequality and the need to support flourishing communities as a basis for improved productivity and well-being. CCA’s full submission can be viewed here.
ACL guidance released
A guide to the Australian Consumer Law for fundraising and other activities of charities, not-for-profits and fundraisers was released on 16 December. It is clear that the ACL can apply to fundraising activity and that it provides the necessary ‘teeth’ to address illegal and misleading practice. The work ahead is to encourage States and Territories to defer to the ACL and repeal the ineffective, onerous and dog’s breakfast of fundraising regulations that are currently in place around Australia. Consumer Affairs Ministers will (again) consider if amendments are required to the ACL in 2018/19.
CCA remains active on this issue. .
Minister Kelly O’Dwyer’s outline of DGR reform sees sensible change that strengthens the role of the ACNC. We welcome the news that ‘in Australia’ provisions and the proposed mandated requirements on remediation activity by environmental organisations have been dropped. Concerns remain around the intent and implementation of requirements to report on ‘political expenditure’. We await the detail and look forward to contributing to the consultations promised by the Minister.
CCA’s submission to the initial Treasury consultation on DGR Reform Opportunities is available here.
CEO Forums - Impact Investing, Making it happen
CCA is planning a series of CEO and Chair forums on Impact Investing in partnership with Life Without Barriers. The forums will bring together NFP leaders and impact investing experts and intermediaries for a high-level discussion on barriers, opportunities and how to move from a good idea to an investment ready proposal. CEO and Chair forums will be held in the coming months in Sydney, Brisbane, Adelaide, Canberra and Melbourne. Dates TBC. Register your interest with Deb at Deborahs@communitycouncil.com.au
The Australia we want begins with Education
In 2015, CCA brought together charity leaders to define the Australia We Want – a vision for the society we should aspire to. Agreeing the priority values was relatively straight-forward. We all wanted to live in a just, fair, safe, equal opportunity, inclusive, united, authentic, creative, confident, courageous, optimistic, generous, kind, compassionate Australia.
Agreeing how we would know these values were being implemented – the indicators – was more challenging. There was one area that all agreed had to be a priority indicator – access to quality education. Education changes lives, reduces inter-generational inequality and creates opportunity.
CCA, with the support of Origin Foundation and PwC Australia began our work on AusWeWant Solutions by bringing together leaders to agree on how we can address disadvantage and disengagement in education and lift Year 12 attainment rates (the AusWeWant indicator for equal opportunity).
The clear message from the forum was education is everyone’s business. Schools and other educational institutions should never be islands, located in the heart of communities, but isolated and disconnected. Our educators and our school system need to work in partnership with families, carers and communities to address in-school and out-of-school factors that influence access to education, engagement, attainment and transition to meaningful post-school pathways.
CCA is now developing a major campaign to encourage charities and the greater community to be more involved in education so that we begin to realise quality inclusive education for all.
We carried forward key policy recommendations from the solutions forum in CCA’s submission to the Review to Achieve Educational Excellence in Australian Schools. Available here.
CCA in the media
CCA CEO David Crosbie talks to ABC News, 6 Dec. Australian charities are already regulated enough, need to be exempt from proposed electoral reform.
Calls for charities to be exempt from foreign influence transparency scheme, Pro Bono News, 31 Jan. David Crosbie told the Parliamentary Joint Committee on Intelligence and Security that it was unfair that businesses were exempted from the foreign influence transparency register but not charities. Charities already face significant regulations and limitations on their capacity to engage in political activities. The Law Council of Australia also called for charities registered with the ACNC to be exempt.
Exclusive: Minerals Council one-third foreign owned, The Saturday Paper, 27 Jan. David Crosbie says we know from international experience that when governments interrogate the lobbying activities of charities, require an audit of the income and details of their advocacy, it serves to frighten many charities into inaction. In this country, charities are already heavily legislated when it comes to political parties and elections. They cannot support a particular candidate, cannot donate any money to any party, cannot support any political party and cannot hand out how-to-vote cards or propose that people vote a specific way. All they can do is advocate on their issue. Those restrictions do not apply to the Minerals Council or any private entity. They can do all those things that charities can’t and get a tax deduction for doing them.
Commissioner defends regulator’s power grab over charities’ spending, The Guardian, 25 Jan. David Crosbie says the regulator was already free to make recommendations about efficiency and didn’t need new objects unless they intend to use them from an enforcement perspective. It’s a confusing and opaque object. The ACNC is not in a position to make generalisations about how much charities should budget for advocacy, salaries or IT.
ACNC regulation proposal met with concern from charity sector, RN Breakfast, 25 Jan. David Crosbie says charities must be accountable to our communities – we trade in trust – that is why we fought to maintain the regulator. But it is not the job of the regulator to become involved in our day to day business and decide what is ‘the most effective use’ of resources. The ACNC does not have the expertise to judge if the RSPCA is ‘most effectively’ improving animal welfare, or if the Smith Family is ‘most effectively’ improving education or SANE Australia is ‘most effectively’ improving mental health. Bizarre overreach.
‘Bizarre overreach’: charities fear regulator wants to control their spending, The Guardian, 24 Jan. David Crosbie says there was no explanation of how the ACNC would measure an ‘effective use of resources’. He said that it is not the role of a government regulator which may not agree with a particular charity’s approach – it’s absurd that the ACNC should tell them how to use their resources. The use of resources is best left up to charities, the communities they serve and their own governance structures.
Charities fear donations bill a muzzle, The Australian, 11 Jan. David Crosbie says, the Government’s proposed legislation will ‘force every charity in the country to think about the implications of saying anything that might be construed an election issue, whether it be housing, health or education.’
Government Confirms New Resources for ACNC to Police DGR, Pro Bono News, 18 Dec. David Crosbie says in principle, CCA has no objections to streamlining of DGR and moving most DGR organisations under the umbrella of the ACNC. The increased funding for the ACNC from 2019 is welcome. Provided the additional audits around DGR are focused on transparent risk profiling there is not a major concern. Should the additional ACNC audits be politically directed at advocacy groups or a segment of the charities sector (as happened in Canada), CCA would be very concerned. The principle is fine, but how it is applied will be closely watched to ensure it is not another exercise in the politicisation of the ACNC.
David Crosbie’s latest opinion pieces in Pro Bono News:
It’s All About the Evidence, 1 Feb. CCA CEO David Crosbie shares an extract from his opening statement before the Parliamentary Joint Committee on Intelligence and Security, and why the CCA are concerned the proposed legislation could impose new administrative and compliance requirements on charities.
Passive or Active – The Challenge for 2018, 18 Jan. We should never underestimate the importance of collective voices writes CCA CEO David Crosbie, as he sets a challenge for charities to be more active in 2018.
A Year to Be Proud Of, 21 Dec. The most positive aspect of 2017 has been the way so many in the sector have come together to push back against those seeking to diminish it.
A Crackdown On Advocacy – Coming to a Charity Near You, 7 Dec. If charities want to retain the ability to engage in advocacy, they will have to push back against those who believe participation in the public contest of ideas should be restricted to the rich and powerful.
Australians Want to Hear the Voices of Charities – Politicians Take Note, 23 Nov. Recent studies show that an overwhelming majority of Australians support the idea that the voice of charities is an important part of our democracy and all politicians would do well to take note.
Nightmares and Good Policy, 9 Nov. The diminution of evidence-based public policy and the rise of vested-interest fuelled popularism means the public voice of charities has never been more critical.
Next year will be very challenging for Australian charities, Krystian Seibert in Sydney Morning Herald, 23 Dec
Comparing Apples, Oranges and Lemons Dressed Up as Mangoes, Pro Bono News, 12 Dec. Myles McGregor-Lowndes suggest KPIs for the new ACNC Commissioner.
Advocacy Under Threat as NFPs Engage in Self-Silencing, Pro Bono News, 12 Dec
Australian charities ‘self-censoring’ political advocacy out of fear of retribution, The Guardian, 12 Dec
Charity regulators should not assume that donors always know best, The Conversation, 11 Dec
Our work is made possible by our members. We encourage you to join us. If you would like to support a strong, independent voice that can speak up on issues that affect the future of our sector, please contact Deb on 02 6281 1739, Deborahs@communitycouncil.com.au
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