Simplifying Generosity: Harmonising Charitable Fundraising Laws - Speech

SIMPLIFYING GENEROSITY: HARMONISING CHARITABLE FUNDRAISING LAWS

Address at the Australian Charities and Not-for-profits Commission Regulator’s Day
Thursday, 15 August 2024

Thank you to Commissioner Sue Woodward AM and to the staff of the Australian Charities and Not-for-profits Commission for the invitation to speak to you today.

And thank you to all of you who are joining the event, for the contributions you’ve made to develop and improve the regulatory environment of Australia’s charities and not-for-profits.

Seven years ago, I joined representatives of the charity sector to launch the #fixfundraising campaign to harmonise Australia’s fundraising laws.

Championed by the Coalition to Fix Fundraising and backed by more than 100 of Australia’s best known and most trusted charities, the campaign has had a much longer lifespan than any of us would have hoped back in 2017.

Charities have long told their governments that organisations are wasting time complying with inconsistent and outdated fundraising rules across the states and territories. On one estimate, compliance requirements cost Australian charities more than $1 million per month.

This is because Australia’s state and territory fundraising laws were developed at a time when most fundraising was conducted in person. Today, with most fundraising done online, the cost and complexity of complying with multiple state and territory fundraising requirements is a major issue for the charity sector.

Here’s how the Productivity Commission describes the problem:

Donors today have more options about who to give to and new transaction technologies are influencing how they give.

Technological changes are facilitating new ways of giving, including the use of QR codes and peer-to-peer giving platforms. Social media is used to drive fundraising campaigns. Charities now compete for the donor dollar with people who use peer-to-peer giving platforms to fundraise for their own purposes. (Future Foundations for Giving – p. 42)

Labor has consistently sided with the sector to support the call for reform and to push for change. If we want a smarter and stronger sector, we need to create a supportive and enabling regulatory environment.

We’ve consistently made this a priority in our charity reform policies because we understand that operating budgets are tight and that wasted money means fewer services, less innovation, less training and less planning.

We backed the sector campaign in 2017. The next year, Labor Senator Catryna Bilyk chaired a Select Committee investigation on the issue. On Valentine’s Day 2019, Senator Bilyk’s report was handed down, urging the former Coalition Government to act speedily to harmonise charitable fundraising laws. In the 2019 election, Labor made charitable fundraising harmonisation an election commitment.

Then, over the course of nationwide natural disasters through 2019 and 2020, Australia had a stark demonstration of why we needed a modern and harmonised fundraising framework.

The organic outpouring of generosity from Australian donors collided with a fundraising regulatory environment that was inconsistent from state to state, often not fit for purpose, and poorly understood by the public. Overall, it did not appear to support public expectation or donor intentions.

This was confirmed in the Royal Commission into National Natural Disaster Arrangements, which acknowledged that the system was over-complex, not well understood by community and costly for organisations to navigate. This system meant that donors lacking confidence in who to donate to, and where and how their donations could be spent.

The Royal Commission made a recommendation to reform fundraising laws, so that:

Australian state and territory governments should create a single national scheme for the regulation of charitable fundraising.

This finally got the government of the day thinking. And one year later, in December 2021, then Treasurer Josh Frydenberg announced that the Council on Federal Financial Relations had decided charitable fundraising rule reform would be a top 10 priority for 2022.

Labor welcomed this move to join our longstanding commitment to fundraising reform and to make the implementation a bipartisan project, with state and territory governments from both major parties working towards the same goal: a harmonised set of national fundraising principles.

This would involve states and territories doing two things:

  1. amending existing regulations to align with national principles; and
  2. turning off parts of their previous regime that would be duplicative under the new principles.

As part of the Labor government’s goal to double giving and strengthen Australia’s charity sector, our Government has been working with states and territories to align fundraising conduct and licensing across the country.

In February 2023, we agreed a set of nationally consistent fundraising principles with state and territory Treasurers, with implementation to follow.

The sector recognised the significance of putting this foundational piece in place. As one of the sector’s chief advocates for harmonisation, Justice Connect, expressed it:

Harmonising fundraising laws nationally 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.

This was a point to celebrate – a shared commitment to provide Australia’s charities with the sector-wide reform that had been top of charities’ wish list for nearly a decade. 

As a result, charities could look forward to fundraising under a national set of principles that recognised the modern online context they all work in, and which reduced the uncertainty about their obligations and the paperwork involved in meeting them.

Governments across Australia have committed to deliver these reforms which will provide a consistent regulatory framework for fundraising across Australia.

States and territory governments have agreed to streamline authorisation for charities to fundraise across Australia, and to harmonise conduct requirements for fundraisers.

New South Wales, Queensland, South Australia, Victoria and the Australian Capital Territory have legislated reforms that mean an ACNC-registered charity is authorised to fundraise in those participating jurisdictions.

These ‘deemed authorisation’ reforms mean that charities don’t need to hold a specific fundraising license under each jurisdiction’s fundraising laws.

Instead, charities can satisfy jurisdictional regulatory reporting obligations by simply meeting their annual ACNC reporting obligations.

It means less reporting burden, and more time to focus on their charity’s core mission.

States and territories have made significant progress on implementing the National Fundraising Principles, particularly on conduct requirements.

Victoria and South Australia have made the necessary changes. And just recently, the ACT amended its legislation to put the principles at the heart of its charitable fundraising regulation. Importantly, the ACT has also turned off the redundant or duplicative parts of their existing regime.

For all of you who are keen to see this rolled out across Australia, this progress should be encouraging. Remaining jurisdictions will continue their progress towards implementation over the remainder of this year.

Complete cross-border harmonisation of fundraising authority and full coverage adoption of the national fundraising principles are excitingly close.

And pushing to get this across the line, we have the recently finalised Future Foundations for Giving report from the Productivity Commission.

Among many other things, the final report reflected a common view in the sector that fundraising harmonisation remains an urgent priority “to ease the regulatory burden on charities arising from multiple regulatory regimes” (Page 259).

The Productivity Commission report has been a vital reminder of the role of fundraising reform in boosting giving and strengthening trust in the charity sector.

Philanthropy Australia noted that:

Differences in fundraising licensing requirements, application and approval processes between jurisdictions increases complexity and can create uncertainty and confusion for charities. (quoted in Future Foundations for Giving, Page 256)

Justice Connect observed:

Not-for-profit organisations face numerous regulatory barriers and compliance costs that do not apply to business. Fundraising regulation is one of greatest sources of regulatory burden for charitable organisations. (quoted in Future Foundations for Giving, Page 256)

And the Community Council for Australia reminded us that:

Separate jurisdictional fundraising regulatory regimes in Australia are not justifiable, especially given the diminishing relevance of geographical boundaries. Fundraising regulations need to be workable, efficient and fit-for-purpose. Current regulations fail this basic test. (quoted in Future Foundations for Giving, Page 256)

Justice Connect also offered this cautionary advice:

There is the potential for these reforms to save charities hundreds of hours of unnecessary administrative time but to realise this benefit, the reforms must be implemented quickly and in a consistent way across jurisdictions to ensure the key aims - simplification and harmonisation - are achieved.

And that’s where Government comes in.

We’ve started to consider a response to the Productivity Commission review. On top of that, we will soon have the sector-led Not-for-Profits Blueprint to consider.

There’s a thread that runs through both pieces of work which leads all the way back to our Government’s foundational commitment to Australian charities. When we came into Government, we were clear that we would partner with the sector and its supporters.

Doubling giving and boosting the capacity of the sector are big jobs, and we’ve identified a handful of key protagonists to assist us. Alongside our government, we need business, donors and charities themselves to all play a role.

And the principle of comparative advantage tells us that we should prioritise the roles that others can’t play.

Governments can spend money, but so can philanthropists, business and donors.

It’s only Government, though, that can set policy and change laws.

This is what the sector most needs us to do.

The sector has done their part. Over years, charities have provided advocacy and evidence, and consistently made fundraising reform a key reform priority.

Governments now need to deliver on our key role. We need to implement the solutions we’ve agreed to.

We need to make the right laws and create the right regulatory environment for charities to thrive.

You can see this in action in the steps the Albanese Government has already taken to support charities and encourage giving.

  • We streamlined the deductible gift recipient system - removing time consuming steps for approvals on the external registers, and putting deductible gift recipient approvals for cultural, environmental, overseas aid and harm prevention charities back in the hands of the independent Tax Office.

  • We brought an end to gag clauses in government contracts.

  • We’re giving the charities commissioner more discretion to share information about decision-making.

  • And we’ve created a new deductible gift recipient category for community charities, to support place-based, community-driven giving.

Building on these achievements, now we are advancing harmonisation reforms through cross-border harmonisation and through the state and territory agreement to implement the National Fundraising Principles.

I’ve advocated alongside state and territory colleagues to urge progress and to applaud it. Today, with respect, I am doing that again. I have written to those jurisdictions that are yet to legislate harmonised charitable fundraising laws to encourage them to do so as a matter of urgency. In doing so, I have noted how much their charities will benefit from nationally-consistent charitable fundraising laws.

I will look at the implementation plans that have been set out across the remaining jurisdictions with enthusiasm.

I hope that every state and territory that has made this change or makes it over coming months, will celebrate the milestone with the charities in their jurisdiction.

You will be giving charities and their workers more time to spend working for their cause.

And the supporters and beneficiaries of Australia’s charitable fundraisers will thank you.

I urge charities in those jurisdictions to celebrate progress and to support state and territory governments when they take the necessary steps.

To my state and territory colleagues — this is a step you can be proud of. It costs nothing and it puts money back directly into the pockets of resource-strapped charities that are focused on keeping communities strong.

These reforms provide most benefit to the very charities that Australians want to support and the services they find most meaningful.

We all know that harmonising fundraising regulations is good for charities. And what’s good for charities is good for the people they support and represent.

If Australia is to reach the goal of doubling giving by 2030, we need to create a regulatory environment that supports donors to give freely – without doubts, second guessing or remorse.

A simplified and consistent set of National Fundraising Principles is the key. It provides a clear basis for fundraisers to fulfil their obligations to government and to the generous Australians who support them.

I encourage remaining states and territories to grab the opportunity I have set out today - to prioritise this meaningful and lasting boost to the sector.

In the future, when charities are fundraising to support nationwide emergency responses or to help ease vulnerable families through difficult financial times, and when they can do this without unnecessary duplication diluting the generosity of their donors, you can take pride in having been a true partner to our most altruistic sector.


Showing 2 reactions

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  • Cath O'Connor
    commented 2024-09-09 10:06:40 +1000
    There are many businesses with ‘charity’ status that is inexplicable Why is this?
  • Andrew Leigh
    published this page in What's New 2024-08-15 21:34:16 +1000

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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.