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

Peter Shergold | CSI blog

It was in May 1968 that Robert Kennedy, with characteristically brilliant oratory, identified the abject failure of governments to measure the quality of life afforded their people.  The traditional statistic – per capita Gross Domestic Product (GDP) – “does not allow for the health of our children, the quality of their education, or the joy of their play;  it does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials …  It measures everything, in short, except that which makes life worthwhile.”  Listen to the speech on YouTube:  it will raise the hairs on the back of your neck.

Two generations on, governments are struggling to address Kennedy’s challenge.  As not-for-profits increasingly seek to measure social returns on investment, and companies to give quantitative dimension to societal as well as financial value, give a thought to the world’s statisticians.  Frustrated with the shortfalls of GDP as an indicator of wellbeing, they are struggling to find alternative means to measure progress in the quality of people’s lives.

It’s not a moment too soon.  Democracy is under challenge.  Levels of trust in politicians are worryingly low.  Less remarked upon is the lack of public confidence in official statistics.  In France and the UK, for instance, only one-third of citizens believe official figures.

Not surprisingly there is a renewed sense of urgency amongst government statisticians.  In May this year the OECD, as part of its 50^th anniversary celebrations, launched the Better Life Index.  It builds on a French initiative, the Commission on the Measurement of Economic Performance and Social Progress, led by renowned American economist Joseph Stiglitz, which reported in 2010.    The Commission concluded that for many purposes there were better economic statistics than a measure of production, GDP:  levels of real household income, for example, or the extent of income inequality.  It is not that GDP is a wrong measure but that it is often inappropriate as a measure what people care about.  In many instances data on social or environmental wellbeing is more relevant.

The Better Life Index seeks to respond to the Commission’s challenge.  It measures 11 dimensions, with 1-3 indicators in each:  housing, income, jobs, education, the environment, governance, health, life satisfaction, safety and work-life balance.  It’s proposed to add more criteria in the future.

The challenge, of course, is how to address the relative importance of such indices of well-being.  The OECD deftly sidesteps the problem by making the index interactive.  Each visitor can weight the variables on-line as they want and share their views with others via Twitter or Facebook.  This is statistics in the age of social media.

It’s made difficult to work out which of the OECD’s 34 member states scores best.  You have to measure the height of flowers and the size of their petals!  I know you don’t believe me but take a look.  Weighing all variables equally on the horticultural scale Australia, I think, is placed second, just behind Canada and just ahead of Sweden in the Better Life garden fertility stakes!  Some 75% of Australians are satisfied with their lives compared to just 59% for the OECD as a whole.

As a nation we rate particularly well on the Community dimension.  Around 95% of Australian respondents believe that they know someone they could rely on in a time of need.  Interestingly 65% report that they have helped a stranger in the last month, compared to an OECD average of only 47%.

The United Nations is also actively seeking to move beyond traditional measures of national wealth. The UN Development Program argues that “an excessive obsession with the creation of material wealth can obscure the ultimate objective of enriching human lives”.  Seeking to redress that defect it has recently issued its 2011 Human Development Report.

Frankly it doesn’t pack the enjoyment of the Better Life Index, requiring its users to possess some understanding of income logarithms and geometric means.  The data, which graph trends back to 1980, is probably more compelling.  It creates a composite index of human development by measuring 3 dimensions (health, education and living standards) against 4 indicators (life expectancy at birth, years of schooling, expected years of schooling and gross national income per capita).

Now I know that your ethical self will recognise the dangers of putting such data into league tables.  But I also know that your inquisitive self wants to know how Australia performs.  The answer is that of 269 countries (47 developed nations) we rank 2^nd after Norway, performing slightly better than the Netherlands, the US, New Zealand and Canada.  In short, the more comprehensive statistical metrics suggest that Australia provides a better quality of life than measures of GDP indicate.

Peter Shergold is the Macquarie Group Foundation Professor at the Centre for Social Impact (CSI) at UNSW. This blog post first appeared on the CSI blog.