State Agreement Will Stamp Out Charity Scammers, The Daily Telegraph, 3 March 2017
Camp Gallipoli claimed it was a charity established to raise funds for veterans and their families. On that basis, it received $2.5 million dollars in taxpayers’ money from the federal government, plus permission to use the word ‘Anzac’ on its promotional merchandise.
It was a business. Run by an ex-bankrupt. It didn’t pay its bills and hasn’t donated any money to veterans or their families. The Australian Charities and Not-for-Profits Commission deregistered it as a charity at the end 2016, making it the 32nd organisation to have its charitable status revoked for governance failures since mid-2014. Last month, two more, including Danny Nalliah’s ‘Catch the Fire’ ministries, copped the same punishment.
It’s entirely possible we’ve not yet heard the worst of charitable fundraising problems and scams in Australia. Although “chuggers” or charity muggers are an effective way of parting pedestrians with their cash, they are not Australians' favourite method of charitable interaction.
Each year, the charity commission reports that Australians make 45,000 complaints about scammers and fake charities. Each year, we hand over nearly $100 million to fake charities - about $4 for every man, woman and child in the country.
Some of the scams make you sick to the stomach. Just days after Vanuatu was smashed by Cyclone Pam, fake chuggers pretending to represent well-known charities tapped into our generosity to steal from kind-hearted Australians.
Tawdry episodes like these are, without question, the exception. The vast majority of Australian charities are doing tremendous work, they raise money ethically, they volunteer their time and they help those who need help.
Many of them and the work they do have become an intrinsic part of the Australian identity. Think of the Royal Flying Doctor Service, the Surf Life Saving Foundation, the Fred Hollows Foundation, Lifeline, World Vision and more. But it is these charities that are most damaged by dodgy fundraisers on the streets or scamming by phone and email, because donors become sceptical of the entire sector.
If you want to know how bad it could get, look at the United Kingdom, where a series of scandals has taken trust in the sector to an all-time low. The worst of them was 92 year-old Olive Cooke, whose suicide was said to be related to the nearly 3000 donation requests she may have received in her final year. This tragedy prompted thousands of Brits to go public with stories about pushy cold-callers and overwhelming direct mail campaigns.
How do we get ahead of the issue, and make sure that the Australian charity sector never suffers a similar hit to its reputation? One answer is to take a national framework that regulates how charities fundraise across Australia. The current rules were developed in the days when the web was someone a spider made, and online was what you did with wet washing. But today, fundraising is national – if not global. Some might receive a letter or a phone call and go online to donate. Others might do their research online and make a donation over the phone.
Currently, charities have to be registered in every state to raise money there. And every state has different fundraising rules.
Imagine if you had to be registered separately in every state in Australia where you wished to drive? And you had to update your registration every time any state you wanted to drive in changed their licensing requirements? Ridiculous.
Whilst some of the biggest charities might have the administrative capacity to keep themselves registered and up-to-date in every state, most don’t. Technically, it is illegal for them to accept money from an online donor who lives in a state where they are not registered. As the head of one major Australian charity confided in me recently, “Andrew, right now everyone in the sector is inadvertently breaking the law, because we’re raising money in states where we’re not registered.”
There is a window of opportunity where federal and state governments can fix this, and it is opening right now – it just needs a government prepared to get it done. In just a few weeks, the review of the Australian Consumer Law will be concluded by Consumer Affairs Australia and New Zealand.
With this review will come the prospect for Australian governments to cooperate and lay down a national approach to fundraising that will help charities and hurt scammers. If they seize the chance, governments can put more scammers out of business, while letting our good charities spend less time doing paperwork, and more time helping those in need.