26 Sep 2012

Will A Charity Commission Cut Red Tape?

By Eleanor Gibbs
A proposal to improve regulation of the not-for-profit sector is due before the Senate next month. Charities and not-for-profits are keen, but they can't manage a heavier bureaucratic load, writes El Gibbs
A proposal to regulate and oversee a section of the Australian economy that employs 8 per cent of workers and comprises over 600,000 different organisations went through the House of Representatives last week. It's due to come before the Senate in the next sitting of Parliament.

The proposed legislation will set up a commission to manage all aspects of governance and require annual financial reporting by organisations across the country.

The Australian Charities and Not-for-profit (NFP) Commission is a long-standing goal of the NFP sector and has been recommended in a series of reports into the sector since 2001. Currently, charities and NFP groups report to a myriad of government agencies. They often have to report a number of times and in different ways, creating a great deal of red tape.

"We are at the altar of the reforms we want and need and we ask for the support of our national parliament and of the states and territories to deliver for us better and smarter regulation. We don't want to be jilted yet again," David Thompson AM, Director of the National Roundtable of NFP Organisations, told New Matilda.

The Commission will also oversee future changes to the definition of what is a charity and which organisations are able to claim the lucrative Deductible Gift Recipient (DGR) status, that allows donations to be tax-deductible — this has an impact on the kind of fundraising an organisation can do. The Commission could also frame the unique place the NFP sector holds in relation to the government and business sectors.

The CEO of ACOSS, Dr Cassandra Goldie has said:

"Our sector is overly but ineffectively regulated. For the reams of paper and hours of analysis that charities put in to reporting the same information to multiple funders and regulators, we know little about the activities, size or scope of this essential sector."

The proposed Commission will, according to Senator Ursula Stephens, have three main objectives.

"Its first object is to maintain, protect and enhance public trust and confidence in the NFP sector. Its second object is to support and sustain a robust, vibrant, independent and innovative NFP sector. The third object underlines the important role that the ACNC will have to promote the reduction of unnecessary regulatory obligations on the NFP sector."

In a statement from the State, Territory and National peak groups for the sector, Goldie states that "the creation of the Australian Charities and Not-for-profit Commission is the culmination of a long process and has broad support from the community and social services sector.

UnitingCare Director, Lin Hatfield-Dodds, told New Matilda that the opportunities offered by the Commission could be of great benefit to the community and to the sector:

"It's important that funders can quickly and easily get an objective and transparent look at the community groups they support. The Commission could also act as a 'Report once, use often' tool, so that community groups report to one agency across all government. When we are spending public money, we have to be transparent. However, there is a risk that we spend more time and administration on reporting, rather than delivering innovative services."

However, there are concerns that, without support from the states and territories, the impact of the Commission will be to increase, rather than decrease, the administrative burden on NFP groups. Currently, organisations can either incorporate, and be regulated by ASIC, or form an association, which is regulated by state-based Departments of Fair Trading. The addition of a Commission, with no corresponding reduction in state-based regulation, is of concern to many groups. COAG is due to consider these issues early in 2013.

In the interim, the Commission could drive reform of red tape within the federal government by streamlining reporting requirements across departments and agencies. For example, each time a group applies for a grant, they have to start from scratch, rather than being able to register with the Commission once for all other agencies.

The relevant bills have been available for public scrutiny for some months, and have been through an extensive consultation process, including a formal review by the Senate Community Affairs Committee. The current legislation is the result of many changes, however there are still concerns held by the Greens, who intend to move amendments in the Senate in the next sitting of Parliament.

"As I outlined in my dissenting report on this legislation, the Greens remain concerned that there's not enough detail about gag-clauses for advocacy groups, and we think there needs to be more consultation on the governance arrangements and independence for the sector to advocate on behalf of those they look after," Greens Senator Rachel Siewert told New Matilda:

"Not-for-profit groups are an essential part of civil society and it's important that this legislation gives transparency in dealing with government. We also want to see the Commissioner given more power to drive the red-tape reduction agenda."

The Greens confirmed to New Matilda that they will consider blocking the legislation if their amendments are not adopted by the Government. However, they stated their commitment to working with the Government to improve the bills to address the remaining issues of concern to the NFP sector.

The LNP currently opposes the creation of the Commission. Despite the broad sector support, the LNP provided over 30 speakers against the Bill when it came before the House last week. Kevin Andrews, the Shadow Minister for Families, Housing and Human Services, stated  that "this is legislation which has been foisted upon the charitable sector in Australia which they do not want, which there has been no case made by the hapless minister at the table."

"This is simply not true," said Thompson, who leads the sector's peak body. "The evidence is in the thousands of words in submissions from the sector, calling for this reform. The Government has taken on board a significant number of issues raised in submissions."

Other LNP members quoted a range of charitable and NFP groups' concerns about the Bill. However, some of these quotes were from submissions about a much earlier version of the legislation and many of these concerns have now been remedied. Several sources have confirmed that there has been considerable disquiet among those groups named by LNP members in the debate.

One, the Australian Institute of Company Directors, is quoted as having concerns regarding the impact of the legislation on board members, most of whom are volunteers. In a recent statement, the AICD said: "if suitable amendments giving effect to these changes were to be made to the current Bill, and subsequent to our review of the revised Bill wording, we would support its passage through Parliament." They support the amendments that the Greens will be putting to the legislation.

The Bill has been introduced into the Senate and is due to be debated in the next sitting, starting 9 October. If the legislation is not passed, Thompson says "it will be back to the drawing board in the quest to get the regulator we want. We have waited a long time and an enormous effort has been put in to get it this far."

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Posted Wednesday, September 26, 2012 - 13:56

My thesis provides definitive guidance on how to design stream-lined, efficient and effective government oversight of not-for-profits, and indeed how to fund them.

Ben Heslop

Posted Thursday, September 27, 2012 - 16:04

Better government oversight can easily lead to more government control. Costello has already gagged the sector - it could easily be tightened. So I share the Green's concerns.

If it removes red tape this will be hugely beneficial to the sector. The requirements on a fairly small charity can be more onerous than those on major corporations. The time wasted on compliance is enormous.

Dr Dog
Posted Friday, September 28, 2012 - 11:17

It would be nice if the new legislation forced charities to be accurate in their claims about what percentage of their income goes to adminstration. It seems common practice for charities to put promotional activities, essentially fundraising, in the operations side of the ledger. The real story is that a much smaller percentage than claimed is going to programs.

BenHeslop's thesis also makes a fine coffee, has met Kofi Annan and provides definitive guidance on how to get a table at Tetsuya's.

Posted Friday, September 28, 2012 - 11:40

Dr Dog,

Finally!! Your promised "report" on my thesis! Mind if use that on my upcoming 'endorsements' web page?

And you seem remarkably well-informed on charities' activities. References? Or do I just trust your infinite wisdom?

Dr Dog
Posted Friday, September 28, 2012 - 12:03

Not at all BH, happy to help. I did have a look and found it very dense. I perhaps will have some comments after a couple of days to absorb the thrust of it. You have done a lot of hard work, that's for sure.

I won't name the oragnisation (I have to have drinks with these people) but I did work at a major charity for 18 months and left largely due to the top heavy nature of the organisation.

You can only trust that what I say is true to my best understanding, I contend that those with endless links can't say any more than that, except that they have found stuff to support their understanding. As a philosopphy student you must be aware that there is supporting material for almost any assertion.

Neither my wisdom nor patience is infinite Ben.

Posted Friday, September 28, 2012 - 12:40


Well I look forward to some genuine engagement with my ideas.

I don't use many links in the thesis at all, when its breadth is considered: my theory is almost-completely standalone and self-supporting. You will understand what I mean when/if you read Chapter 4.

I am not a philosophy student (although the masters is an MPhil because it is original research rather than course work) but rather an engineer by training.

Your patience is your own business. I do not assume superiority over you, nor do I allow myself to be bullied by your like. If you have something worthwhile to say I will listen, and I expect the same in return. Not to be prematurely judged or undercut due to whatever threat you imagine I pose to you and your worldview.

Dr Dog
Posted Friday, September 28, 2012 - 14:58

Sorry, lets say student of philosophy instead, which was my implication.

Rather than your thesis I was referring to supported arguements here on NM. I am just saying that the ability to provide a supporting link or reference does nothing to validate an arguement, given the plurality of available material.

An engineer makes sense to me. It explains to me why you are so keen on your model, and why you seem so sure that the model, if it works properly, will reveal the answer that I also seek, to the question "How should I live?"

However I contend that any model complex enough to solve issues such as Aboriginal disadvantage is too complex to be understood, indeed it could be said that the only working model of the world is the world itself.

On that basis my world view is threatened by anyone who claims to have all the answers as a result of their obviously flawed model (I say obviously flawed becasue models are by nature flawed, not as a dig at your own).

I have had my fill of jerks who have told me they knew what was right as a result of their understanding of the world, parents, religious leaders, politicians, all the isms and ists. You must on some level remind me of those people and I trust my instincts about these things, being as much dog as doctor. This may be premature but I will back myself that when challenged you will not be able to provide me with a shred of an idea as to how your thesis can actually, in the real world, be applied to the realm of human activity you claim for it.

After all you only said this..."My thesis provides definitive guidance on how to design stream-lined, efficient and effective government oversight of not-for-profits, and indeed how to fund them." You have to admit this is a massive call - care to expand or provide examples?

You take a decidedly superior attitude for someone who claims otherwise. I recall on some thread reading your thoughts on the responsibility of "intellectuals", clearly putting yourself in that catagory. I have few rules but one of them is that if someone describes themselves as intellectual they probably are not, just like the girl at a party who declared herself to be "crazy" was really just seeking to associate herself with the memes that go along with craziness.

I really don't know how I could bully you here on a website, certainly the rudest thing said between us so far on NM has been a suggestion by you that someone shit on my head. A suggestion as witless as it is funny.

Dr Dog
Posted Friday, September 28, 2012 - 15:57


A special report by Dr Dog, MDCan.

In a Collaborative Entrepreneurial Innovation Mr Heslop presents an interesting model for promoting more effective collaberation between capital and research, or other systems where an exchange of knowledge for resources is required to acheive improved outcomes.

In particular Heslop suggests a financial system that encourages collaberation. This can occur at an individual level, such as incentivising a welfare recipient to participate in the development of a collaberation with those who have expertise that can assist these recipients to acheive desired change.

At a macro level Heslop paints government as too naturally conservative to be able to adequately drive or respond to new ideas. Heslop's contention seems to be that government ought remove itself from the realm of innovation and focus on providing an environment where economic and interpersonal markets drive collaberation and innovation as a survival mechanism.

Heslop charts a course toward stagnation for government, citing post revolutionary Russia as having become moribund once the initial innovative moment, the revolution, had passed and power began to accrue to new power structures. He does not supply any evidence that non-government agencies such as corporate structures are free of this trajectory.

However these ideas are worthy of experimentation, and Heslop provides some good examples, the most telling being that of Street University, where participatory practices involve young people in their own learning, leading to positive outcomes for many disadvantaged youth.

Heslop perhaps does not go far enough into the relative levels of success acheived by the Street University as compared to more traditional approaches. Indeed it has long been accepted in educational theory that multiple models of education and association are likely to be required to meet the needs of adolescents with multiple needs.

Naturally many of these ideas are not new, but Heslop has given some significant thought to a mechanism where participatory activities may be more likely to occur.

While the Heslop thesis has significant merit he does not suggest what conditions could arise where the tax and welfare sytems might be induced to undergo the revolutionary changes required for the Heslop method to be applied.

Shifts of the nature required by Heslop go beyond a change of government toward a change in the way we are governed. In fact the implications of Heslopism to electoral participation are tantalising, although not covered in the thesis.

Additionally, testing the thesis with, for example, welfare recipients has implications that may be repugnant to university ethics committees and decision makers alike.

Heslop has produced a fascinating insight into mechanisms for stagnancy and innovation in government and reasearch programs. Further claims about the usefulness of the thesis, for example in examining the role of homosexuals in society, should be viewed with caution and perhaps as an ebullient celebration of the thesis' completion.

Mr Heslop himself, like many academics, is a bit of a tool.

Dr Dog.

Posted Tuesday, October 2, 2012 - 09:28

Thanks DD!

I wonder if you would mind if I placed this on my website (with your full name etc.)

"After all you only said this…”My thesis provides definitive guidance on how to design stream-lined, efficient and effective government oversight of not-for-profits, and indeed how to fund them.” You have to admit this is a massive call - care to expand or provide examples?"

Well by those in need paying vouchers to charities (formed as collaborations as defined in my thesis) rather than governments dictating from on high who will get a grant, or even who will receive tax-free status (which should be abolished).

Dr Dog
Posted Tuesday, October 2, 2012 - 12:32

Gday BH,

Yeah I guess so, although I think we could leave out the tool bit at the end - having actually been interested by your thesis my NM 'identity' wouldn't let me leave it on a positive note.

I guess I have to call time off on our growing stouch dammit, as you are clearly not a nut, or at least are a nut with some ability. I will have a go if I think you are straying from your knowledge base.

I have to admit the thesis was dense and my understanding of your references poor at times, but if you think my comments and queries reflect the true direction of the work then by all means put them up.

I like the voucher idea.


Colin Stokes.
(name will suffice, I have no blog or titles at this time)