Powerful coalition calls for major reform of not-for-profit fundraising rules

Currently NFPs are forced to waste significant amounts of time and money to meet outdated and fragmented fundraising laws that differ considerably across Australia.

The Australian Institute of Company Director’s Managing Director & CEO, John Brogden said that more than 600,000 NFPs operate in Australia, 10 per cent of which are charities.

“Charities and other NFPs are wasting millions of dollars on outdated and unnecessary regulation — funds that should be going to Australians in need,” he said.

“Across Australia's seven different fundraising regimes however, there is variation in the requirements for fundraising at each stage, from when and if a licence is needed, to how long a licence is valid, right through to what must be reported and when.

“This duplication and confusion means charities and NFPs are having to spend time and money on red tape rather than pursuing their missions.”

Fiona McLeay, Chief Executive Officer, Justice Connect added, “For smaller groups, it can be particularly difficult to navigate these complex laws. For larger ones, resources are redirected from service delivery to compliance, with spending on fundraising 'admin' a significant deterrent to public giving.”

“There is a simple way to provide a better regulatory framework for fundraising — clarify and improve how it is covered by the Australian Consumer Law and repeal existing inconsistent and out-of-date state and territory legislation.”

Steven Burrell, Chief Executive Officer, Governance Institute of Australia noted that “Charities and other NFPs deliver important community services, including assisting those in disadvantage through health and other services, providing crisis shelter for women fleeing domestic violence, educating a range of Australians from our professions to refugees, developing a vibrant arts sector that enhances our culture, working for environmental protection and a myriad of other areas that together form an essential part of Australia's social and economic infrastructure.”

“Although demand for these services is growing, government funding is decreasing,” he added, “The motivation of NFPs to support as many people as possible often means they spend considerable time and effort raising funds from the public. However, the current regulatory regime creates risks for donors, losses to productivity, barriers to innovation, and negatively impacts the sector’s sustainability and growth.”

The coalition points out that an improved fundraising regulatory regime will deliver benefits to all Australians. The proposed reforms would protect charities and other NFPs from unnecessary costs as they try to raise funds, support them to be more productive, including when they deliver government funded services and enable them to continue making a significant contribution to our economy and our society.

“The reforms are cost-neutral, would better protect donors, could be enforced by existing regulators and would be easier for the sector to understand and comply with,” concur John Brogden, Steven Burrell and Fiona McLeay.

The full statement can be accessed at:

aicd.companydirectors.com.au/fundraisingreform
http://www.justiceconnect.org.au/fundraisingreform

The fundraising reform coalition

The eight bodies making up the coalition are Australian Institute of Company Directors, Justice Connect, Governance Institute of Australia, Charted Accountants Australian and New Zealand, Australian Council of Social Services, Philanthropy Australia, Community Council for Australia and CPA Australia.