Fundraising regulators – our Kafkaesque nightmare

The term "Kafkaesque" refers to situations that leave us feeling diminished, lost and hopeless when dealing with an unseen malevolent bureaucracy.

It is difficult to think of a more petty, pointless, paternalistic exercise in dysfunctional bureaucracy than having states and territories each separately regulate charitable fundraising.

And yet they do. Not because they need to, or because they perform a useful task, but simply because they can, or at least they think they can.

The reality is they can’t, as evidenced by the fact that most charities are not registered with relevant states and territories even though many charities engage in online fundraising activities.

Or the fact that there is apparently little to no enforcement of any of the state and territory requirements.

One senior state official informed me that their approach to regulating charities was grounded in their state sovereignty! Australia federated a little over a century ago, but in fundraising regulation, each fiefdom must have its power respected, even if the only power it really has is nuisance value.

And what a nuisance the fiefdoms have been and remain.

Australians are losing millions of dollars a year in productivity and services that charities should be providing to their communities.

It is difficult to briefly explain all the requirements imposed by state regulators, but here is just one example.

If I am the secretary of a volunteer-run bird-watching and -monitoring environmental group in eastern Tasmania, and my organisation has a "donate here" button on its website to help cover our costs, I am required to register as a fundraiser in most states and territories.

Here are the current requirements in Western Australia:

“An application for a charitable collections licence should be lodged with the Commissioner for Consumer Protection (the Commissioner). All applications received will be reviewed by the Charitable Collections Advisory Committee, an independent body, which makes recommendations to the Commissioner...The application for a charitable collections licence requires the following documents: ·

• a completed Application for WA charitable collections licence form
• copies of the governing documents for the organisation. For example, trust deed, certificate of incorporation or registration and the rules or constitution. Note: Applicants who are incorporated under the Associations Incorporation Act 2015 (WA) are not required to provide the certificate and rules
• the latest financial report including an income and expenditure statement and balance sheet (not required for newly registered organisations).

“If the application is approved, the organisation will be issued with a licence certificate and can commence its charitable collection activities. Successful applicants must also familiarise themselves with the licence conditions and ensure that all of these obligations are met.”

These requirements apply even if I am registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and based in another jurisdiction. There are separate requirements in Queensland, New South Wales, Victoria, South Australia, Tasmania and the ACT.

They are all a waste of time and effort – and most charities do not comply. Who would know?

Just in case people are unsure of what charities can and can’t do in their fundraising, under consumer law, no organisation (including charities) can engage in misleading or deceptive conduct.

If they do, they can be prosecuted – as many individuals and organisations have been – for breaking consumer law, and not because they failed to comply with state or territory fundraising regulations, which are rarely enforced.

In practice, we have faux fundraising regulations across the country run by people who seem to have no regard for charities and their purpose, diligent officials who care about correctly filling in multiple forms and collecting meaningless data to be filed on computers and in dusty filing cabinets, never to be referred to for any useful gain.

Nuisance value state and territory officials have been resisting any moves to reduce their pointless forays into self-serving “oversight” of fundraising activities despite decades of inquiries and reports telling them to stop making things so difficult for the minority of charities seeking to comply with their inconsistent fundraising regulation regimes.

State and territory ministers continue to play along with their senior officials.

Perhaps they live in hope of a political point scoring opportunity to demonstrate how effective they are as tough regulators holding wayward charities to account in their jurisdiction. It’s almost as though they believe there is no ACNC overseeing all charities, and no consumer law.

They want a shiny sheriff’s badge to pin on their chest.

So, it continues. After decades of promising to reduce the red tape and duplication involved in fundraising regulations, after numerous agreements to move forward on agreed principles and practices, jurisdictions have made what could best be described as miniscule progress.

Not one jurisdiction has turned off its fundraising rules and regulations and adopted the agreed fundraising principles, with the exception of the Northern Territory which rightly has no fundraising regulatory regime and relies on consumer law.

The rest are talking about it, developing plans, fiddling around the edges, ruling up fresh pages, and fundamentally not changing much at all.

The whole harmonising exercise is becoming another rancid exercise in futility, with jurisdictional officials busily pursuing inaction. We have been here before, numerous times.

Inaction from jurisdictions shows how little they care about their imposts on charities. They are not prepared to change, or offer any benefit to our organisations and the communities we serve, so why should we keep complying with a time-consuming dysfunctional regulatory regime?

Maybe it is time for all the conscientious charities who have wasted their limited resources complying with a pointless fundraising regime to simply stop playing with the state regulators who continue to treat them with contempt?

Enough!

David Crosbie has been CEO of the Community Council for Australia for the past decade and has spent more than a quarter of a century leading significant not-for-profit organisations, including the Mental Health Council of Australia, the Alcohol and Other Drugs Council of Australia, and Odyssey House Victoria.