Leaders call for urgent reform of charity fundraising laws to catch up with today’s tech-savvy donors

24 Oct 2019

Caroline Baker, Justice Connect

Leaders from the charity, business and philanthropic sectors met with regulators and advisers at a forum in Melbourne this week. Their mission – to drive action to reform Australia’s antiquated fundraising laws.

We need to cut the red tape

Justice Connect convened this forum on Tuesday, 22 October to shine a light on the cost to Australia’s vital not-for-profit sector from legislative red tape and to drive urgent change.

‘Today we donate to a cause at the push of a button through Facebook and PayPal, but charities still have to spend hours complying with out-dated fundraising laws state by state. We’re wasting valuable donations and it’s time for change’, explained Sue Woodward, Head of Not-for-profit Law at Justice Connect, and lead contact for the #fixfundraising campaign.

In her call to action, Sue declared, ‘There is a clear and immediate solution. We will be urging people – charities and their supporters – to write to their local MPs asking them to prioritise fixing fundraising for Australia’s charities’.

‘Why do we make it so hard for organisations who are doing good work?’, Chris Povey, CEO at Justice Connect

In his opening remarks Chris Povey, CEO at Justice Connect, stressed the need for change, ‘We want regulation to get out of the road. Our focus should be on how we can support people to give more. Against a lot of resistance, change is possible and our laws need to keep up with the change’.

Charities aren’t fundraising alone

Founder and Managing Director of fundraising platform mycause.com.au and three-time Telstra Business Finalist Tania Burstin explained that it’s not only charities that fundraise. People and third party contractors often fundraise on their behalf. Tania argued that the focus of current laws on who receives funds should shift to the party raising funds. Closing her keynote address, Tania confirmed the current state-based regulation is ‘burdensome’.

‘We could operate in a stronger, smarter, simpler way’, Tania Burstin, Managing Director of mycause.com.au

Alice MacDougall, Special Counsel at Herbert Smith Freehills, drew attention to the ‘elephant in the room’. Alice asked ‘how many organisations don’t comply with fundraising laws because they don’t know about them or because it’s too hard?’

Referring to her extensive experience in charity law, Alice also made the point that it’s not just charities that fundraise.

‘Anyone who wants to fundraise is impacted by the fundraising laws. Specifically – corporates want to fundraise, but their risk appetite is impacted by the complex nature of fundraising laws’, Alice Macdougall, Special Counsel at Herbert Smith Freehills

Data backs our call to #fixfundraising

Associate Professor Wendy Scaife, prominent data guru from the Australia Centre for Philanthropy and Nonprofit Studies, backed up Sue and Tania’s statements with statistical evidence from years of Australian Taxation Office (ATO) data.

Referring to the data, Wendy demonstrated that, over time, people who give, continue to give more, but fewer people are making donations.

To address the downward trend in numbers of people giving, Wendy suggests creating an enabling environment to support giving: ‘Fundraising is teaching people the joy of giving. We give because we are inspired. Fundraising is about informing people about the issues in society’. Repealing regulations that pose a barrier to fundraising will promote a supportive environment.

‘Australian annual charitable giving equates to retail spending over Easter’, Associate Professor Wendy Scaife

Red tape comes at a high cost 

Greg Seeto, a Life Saving Victoria executive, presented his ‘on the ground’ experience of the burden of state-based fundraising laws. By measuring this cost by reference to numbers of rescue boats and lifeguard hours, Greg provides a compelling argument for legal reform now.

‘Complying with seven different State fundraising regulations costs the equivalent of 25-30 rescue boats or 10,000 lifeguard hours per year’ Greg Seeto, Life Saving Victoria.

How will the ACCC manage?

An audience member questioned how the Australian Competition and Consumer Commission (ACCC) could be effective as a national regulator if State regimes are repealed. In response, Nick Heys from the ACCC noted that State regulators in this area have a lot of issues to regulate, so the focus on national issues isn’t always at the ‘top of their totem pole’. This means the ACCC has to take responsibility for the national focus.

Simon Cohen from the Department of Justice and Community Safety referred to the Belle Gibson case as an example of where the national Australian Consumer Law (ACL) was successfully applied.

For reform to happen, Simon explained that a national champion as well as cooperation between the states is required. We also need to address concern about protection being lost by repealing State legislation.

Sue Woodward suggested the position wouldn’t be any worse than it is now, where there are only about 16 staff across Australia enforcing the State laws. The position could be better – those staff plus the ACCC could focus on applying the same law (the ACL) which would be more efficient than having the same number to enforce the ACL plus disparate State regulations. While there is a resourcing issue, fundraising could be regulated more efficiently.

‘Fundraising doesn’t respect [state] boundaries’, Simon Cohen, Deputy Secretary, Regulation at the Department of Justice and Community Safety.

There is a clear solution

Sue Woodward wrapped up the discussion with a passionate and clear solution to this thorny policy issue.

‘Charitable fundraising is not a hot or sexy topic; it’s not on the political radar. But, we are not deterred. More lives can be saved with drug and alcohol services, more people can be given crisis accommodation and more trees can be planted. We could get this issue sorted now. If we carry on down the same path, it may take a terrible scandal in the sector to force our politicians to act on the legislation’.

Sue went on to reiterate that under the #fixfundraising proposal ‘State regulators would continue to have a role to play in a national regime – supporting the ACCC using the Australian Consumer Law toolkit. The Australian Charites and Not-for-profits Commission would be the specialist regulator to promote transparency and share data securely with other regulators. Local governments are there to deal with fundraising on street corners’.

‘More lives could be saved with the money currently going on red tape … if the right people were in the room with the right determination and the right authority we could get this issue sorted’, Sue Woodward, Head of Not-for-profit Law at Justice Connect

What now?

85 passionate leaders left the forum with a clear picture of the problem, the solution and their individual role to play. We urge our #fixfundraising supporters to write to their Member of Parliament to raise awareness of this red-tape cost, and drive change.

Herbert Smith Freehills generously hosted the forum at their Melbourne office.