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Sweet charity

Date published: Monday 12 November 2018

Category(ies): Comment


Last week I gave evidence to the federal Senate Select Committee Inquiry into 21st Century Fundraising, so I've been doing a lot of thinking about the role of charities and our relationships with governments.

This inquiry relates specifically to the state-based regulation of fundraising (read our submission), but questions asked by senators during the hearing touched on a range of related issues (read the Hansard transcript).

This isn't terribly surprising given that governments both regulate charities and provide funding for most of the services charities provide.

The charity sector has grown steadily since Australian governments of both conservative and progressive leanings have ceased providing community services directly and outsourced them to private companies or not-for-profits. It's hard to know whether the impetus was to reduce government spending, an ideological support for small government, an honest belief that charities provide better services at lower cost, or a combination of these factors at different points in time.

Whatever the reason for this trend, the charity sector has been growing steadily over the last 10 years. According to the Community Council of Australia, charities have grown by around 7% each year which is faster growth than any other industry sector in Australia. Our 52,000 registered charities turned over more than $142 billion in 2016 with 43% of that income coming from governments.[1]

Some of the questions asked during the inquiry hearing reflect the tensions that have arisen since governments started commissioning charities to provide community services rather than delivering them directly.

There was interest in the proportion of revenue we receive from governments, and questions around what obligations that might place on charities when advocating for policy changes. For example, there was discussion about clauses in funding contracts that prevent charities from criticising government policy. We were also asked questions about conflict of interest when charities might advocate for increased funding for sectors where they deliver services.

There are currently new changes to the Commonwealth Electoral Act 1918 that require charities that advocate in relation to government policy to report particular types of expenditure to the Australian Electoral Commission. This topic also came up during the hearing. It has been part of an ongoing debate about the appropriate type and level of engagement by charities in advocating for change as part of the public debate and political process. The irony was not lost that this new reporting regime has been added to charities just as this Senate Select Committee is inquiring into reducing red tape in relation to fundraising.

Even when delivering services on behalf of a government, charities are very different from the public service. The CEO of the Community Council of Australia, David Crosbie, described these differences in a recent article for Pro Bono Australia.

"Unlike public servants who are increasingly being dragged into the partisan mire, charities have their own constituencies, their own purpose which goes beyond government and politics. Charities can share an agenda, policies, and goals with a government or a minister, but charities are not and should never be political partners with government. Charities do not serve a government or a minister."

This can sometimes be uncomfortable for governments as well as charities!

Despite governments' occasional discomfort about charities advocating in the public debate, charity law is very clear about our obligations. Our only role is to pursue our charitable purposes as set out in our governing documents. The way we do this can certainly include advocacy along with a range of other activities. However registered charities are not permitted to engage directly in the political process by supporting a political party or candidate if they want to keep their registration.

Although there's been significant growth in the charitable sector, anecdotally demand for services is increasing. With a continuing trend for governments to deliver fewer services directly, and the need for accountability for the use of government funds, the sector is more professional and efficient than ever before.

However, based on questioning at the inquiry hearing, we probably have an ongoing challenge to demonstrate to governments the tangible social and community impact of our work. Perhaps we still have some way to travel to completely convince governments of the true value of the contribution of charities to our communities, our nation and the public policy debate.

[1] Powell, A., Cortis, N., Ramia, I. and Marjolin, A. (2017) Australian Charities Report 2016. Centre for Social Impact and Social Policy Research Centre, UNSW Australia.