Linda Lavarch | CSI Blog

Charities are in Crisis is the opening statement of a new book Driven by Purpose – Charities that make the difference. The authors Stephen Judd, Anne Robinson and Felicity Errington stress that it is not a crisis of money, professionalism or leadership but a crisis of identity. Judd et al look at the ways in which each charity should revisit its purpose to overcome any identity crisis.

But there is an even bigger issue to grapple with. There is only a limited understanding or recognition of where charities sit within the landscape of Australian society. As a society we cherish the work that they do and we want our charities to succeed but we need to figure out how they should be supported and regulated. Having 178 pieces of Federal, State and Territory legislation and 19 separate agencies determining charitable purpose does not begin to demonstrate the regulatory nightmare that some charities endure. It has become beyond ridiculous.  Thankfully a better deal for Charities is about to begin and this reform is broadly supported by the Not-for-profit sector in Australia.

Today, the Government introduced the Australian Charities and Not-for-profits Commission (ACNC) Bill, the Consequential and Transitional Bill, and the Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill to Parliament.

The importance of the ACNC as an independent, statutory regulator for the Not-for-profit sector cannot be understated.  Without the ACNC we leave this important sector which is estimated to represent over 4% of GDP and 8% of the Australian workforce to an incoherent, costly, uncoordinated, complex regulatory regime in which the ATO has assumed the position of default regulator. It is therefore not surprising that Not-for-profits have been calling for an independent regulator like the ACNC for so long. These calls have been supported by no less than six major inquiries since 1995.  All of these inquiries including the significant inquiry undertaken in 2010 by the Productivity Commission, Contribution of the Not-for-profit Sector, have unequivocally called for a ‘one-stop shop’ national regulator for the sector.

It’s not just the Not-for-profit sector that will benefit from the ACNC. While many of us roll our eyes as soon as we hear the words ‘regulatory reform’, we all have an interest in a stronger, more sustainable Not-for-profit sector. There would be very few of us not touched by the work of some 600,000 Not-for-profits that exist in Australia. Whether it is helping to organise meals on wheels, supporting grass roots sport or caring for our natural resources, Not-for-profits are often the glue that holds our communities together. Australians donate around $7 billion in money and $14.6 billion in time each year. The last thing we want is the good works of our charities and the army of volunteers who help them being held back by the current haphazard regulatory environment.

The ACNC Bill follows many months of consultation with Not-for-profits. This consultation resulted in a number of significant changes since the first draft was released in December 2011. This has also led to the Government delaying for 12 months to 1 July 2013, the introduction of the financial reporting and governance standards. A decision welcomed by the sector.

The 2010 National Compact between the Government and Not-for-profits committed both parties to working together on a shared vision to improve Australia’s social, cultural, civic, economic and environmental outcomes.  This shared vision was based on an appreciation of the unique contribution that a strong and vibrant Not- for-profit sector makes to Australian society.

The Not-for-profit sector looks forward to continuing our engagement with Government on standards that strike the right balance between accountability and ensuring that we do not stifle the vibrancy and responsiveness of the sector.  Australia needs a creative and productive Not-for-profit sector that can serve the Australian community into the future.  I am confident the ACNC’s role of ‘light touch’ regulatory oversight combined with education and support will become profoundly important to underpinning civil society in Australia and then we will be in no doubt about the difference charities make.

This post previously appeared in the CSI Blog: From Haphazard to Harmony – Australian Charities and Not-for-profits Commission