Charity scammers prey on our goodwill

There's been a lot of concern around recently about charity scams and 'front' not-for-profit groups which channel money to illegitimate purposes. It's a timely reminder that we need a central agency to monitor and regulate the charity sector.

Charity scammers prey on our goodwill, The Daily Telegraph, Tuesday 16 September

THE charities had weighty names such as Friends of the Disabled Children’s Task Force, Friends of the Underprivileged Children’s Task Force and the Chronic Obstructive Pulmonary Disease of Australia Incorporated. Inspired by a deep sense of generosity, Australians donated more than a million dollars to them.

But it turned out that there wasn’t much evidence of that money going to the disadvantaged or needy. These charities have since been shut down.

All scammers are dodgy, but I’ve always regarded charity scammers as a particular form of low-life. While other scammers exploit greed, lust and ignorance, charity scammers prey on our goodwill. They take the great Aussie tradition of wanting to help the vulnerable, and use it to line their own pockets.

Cracking down on scams is one of the main reasons that Labor set up the Australian Charities and Not-for-Profits Commission in 2012. Before we established the commission, Australians had no central register to find out whether a charity was dodgy or legit. Now, if someone comes to your door asking for money, you can jump on and check them out in an instant. The charities commission is also proactive when it comes to dealing with scammers. Earlier this year it deregistered two West Australian groups after a five-month investigation showed their benevolent work was a sham.

The commission has also revoked the charity status of more than 240 not-for-profits which failed to report on their activities. This means your tax dollars aren’t being spent on tax breaks for charities which can’t show they’re doing a decent job.

The charities commission also brings welcome benefits for charities themselves. In an open letter to the Prime Minister, not-for-profits such as Lifeline, the RSPCA and Save the Children pointed out that it has cut their compliance costs and reduced regulatory burden. At the same time, the increased transparency provided by the commission raises public trust in the sector as a whole.

Despite the commission succeeding on all these fronts, the Abbott Government wants to scrap it. As World Vision CEO Tim Costello put it, “The sector overwhelmingly believes the government has got it wrong”.

The charities commission is helping charities, and almost all want to keep it. On top of that, there’s a risk that axing the charities commission will increase the number of charity scams. No one wants to see that outcome. The Abbott Government should stop scamming Australians, and keep the charities commission.

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  • Brendan Hancox
    commented 2014-09-20 00:01:59 +1000
    Hi Andrew, I read about how there was no organisation in Australia to regulate charities (unlike in the USA) in your book ‘Disconnected’ and it got me interested to see your blog and this article. It’s good to read that there is now a commission to address the problem of charity scamming. I visited the acnc website not long ago to check up on a charity – National Heart Foundation of Australia – and in particular to see their ‘efficiency’ stats, ie how much of money donated actually went to the worthy causes it claimed to be supporting. I did this because I accepted a request to collect in their September door-knock appeal and I was interested and felt obliged to do some research before asking others for money. I ended up trawling through their annual financial document but after this was still unsure of how ‘efficient’ the charity was. It is good that the commission cracks down on disreputable scammers but may I suggest that there be some kind of ‘rating’ system for the major charities which assesses on how much donation income goes towards the stated projects/aims of the charity, and made clear and accessible to ordinary people, e.g. a rating out of five? I should think that this should better inform potential donaters on the ‘best’ charitiese to donate to in terms of bang-for-buck (of course not in terms of ‘value’ of the charity’s work as this is much more complex) and at the same time encourage charities to streamline their their organisation by perhaps reducing the amount of donations going towards admin and executive salaries? Also, I should also think that charaties generally do a good job of this already since they surely have strong ethical motivation to provide their services, but I would like to know exactly how much this is the case. Thanks for reading and regards, Brendan.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.