Independent charity regulator is long overdue

Media Releases, Opinion article written on the 28 Aug 2008

The Australian landscape is densely populated with charities, a positive feature in light of the two million Australians who live in poverty, the one billion people globally who live on less than a dollar a day, and the millions more who need assistance that only the not-for-profit sector can provide.
Organisations within the charitable sector have a proud history of achievement and inject the inherently Australian notion of a Fair Go at home and overseas.
Oxfam Australia began in Melbourne’s suburbs in 1953 as a group called Food for Peace Campaign, sending weekly donations to a small health project in India.
We are now one of the biggest international aid and development agencies in Australia, and like other not-for-profit organisations, we have grown rapidly – but unfortunately the federal regulation of the charitable sector has not developed with us.
Australia is years behind other nations in our standards of regulation of charities and not-for-profit organisations. Thankfully, a Senate Inquiry into disclosure regimes for charities and not for profit organisations is currently underway. Oxfam welcomes this initiative as an opportunity for the Australian Government to adopt key aspects international best practice in this area.
One of the key recommendations in our submission to the Senate enquiry will be the establishment of an independent Australian Charities Commission.
Australia should look to develop a model based in part on The Charity Commission for England and Wales, which has been in operation for more than five years.
This UK body ensures that charities meet legal requirements and names charities that have seriously defaulted on legal obligations, such as not submitting their annual report and accounts.
But as well as acting as a watchdog, the UK Charities Commission works in partnership with charities to encourage innovation in the sector.
It helps them increase their efficiency and, in the process, builds public confidence and trust in their operations. It is crucial that a similar commission in Australia also assist in growing public understanding of the not-for-profit sector.
An independent charity regulator also needs to ensure that monitoring and reporting requirements are adapted relative to the resources of the charitable organisation. The last thing we need is a counter-productive level of regulation and reporting that cripples the ability of under-resourced charities, particularly smaller organisations, to carry out their stated mission and compromise their services to the community.
To achieve this, an Australian Charity Commission would need to be adequately resourced. Failure to do so risks it becoming a toothless tiger generating cumbersome bureaucracy for Australian charities. This year’s budget of the UK Charity Commission is in excess of $AUD60 million, which is an indication of the resources required.
The reliance of not-for-profit organisations on public donations rightly places scrutiny and debate on the origin of those funds and how exactly they are spent. Oxfam sees our work as a partnership with Australian donors and government where we, together, assist communities across East Asia, South Asia, Southern Africa, the Pacific and Indigenous Australia overcome poverty and injustice. We remain committed to utmost transparency in that relationship.
Oxfam has independent auditing systems in place and report publicly on our spending every year in compliance with a strict industry code developed by the Australian Council for International Development (ACFID). This code is internationally recognised as a best practice example of voluntary regulation and sets minimum standards of accountability and is monitored by an independent committee.
But there is work to be done to ensure that similar standards exist across our sector, and that these are consistent and robust. Currently there is no harmonisation of laws and standards to promote transparency, nor a uniform framework through which charities can disclose their use of public and government funds.
The consequences of this are twofold. First, this results in considerable red tape for national charitable organisations which must comply with separate fundraising legislation in each State and Territory. One set of national laws would same time and reduce compliance costs which are ultimately borne by donors.
Secondly, the absence of uniform disclosure requirements makes it more difficult for individuals to compare charities – apples for apples – and make informed decisions about best practice and bad practice in different organisations.
Organisations within the charity sector will continue to be major providers of essential services to people within Australia and overseas long into the future. Any reform that increases their efficiency and gives them due public recognition should be of precedence. Oxfam, for one, welcomes such reform.
Andrew Hewett is the Executive Director of Oxfam Australia.

This opinion piece was published on ABC Online on 28/08/08. For more information or to interview Andrew Hewett, please contact Sunita Bose on 0407 555 960 or