The Australian charity sector must do a better job of telling the public what it does to ensure donors are realistic in their expectations, according to the sector’s regulator.
Australian Charities and Not-for-profits Commission (ACNC) head Dr Gary Johns told a Philanthropy Australia webinar in early August that there was a “gulf” between what charities tell the public and what he learns in conversations.
“What surprised me is the gulf between what I learn from charities when I sit down with them … and learn their business … but what I hear too often from charity spokespersons is a whole other conversation.”
“It seems to me that they’ve got themselves into a mindset that says, ‘If we complain long and hard, we’ll get more money from the government, and the government will buy our compliance.’
“Of course we’d like more support, more money, but it’s not the only conversation in town, so I think … the sector sells itself short. I’m not hearing enough of what it took to build this charity, how long it’s been going for.”
Dr Johns suggested this results in the public underestimating the amount of work it takes for charities to get help to people in times of crisis, citing the 2019–20 bushfire emergency as a prime example.
“People press a button, they send $10 from anywhere in the world, it all collects and coagulates here in Australia, and they expect that money to go out within minutes,” he said.
“And you and I both know it's an extraordinarily difficult task. It takes judgment as well as good organisation. So as much as I can, I’m learning the lesson that charity work is quite complex.
“Charities have to tell their story about how they manage their monies for purpose.”
ACNC probe into big charity bushfires to be public
Dr Johns said the ACNC also had a role to play in educating the public.
He revealed that as part of that role, the regulator would publicly release the results of an investigation into 2019–20 bushfire charity donations and spending by some of the biggest Australian charities.
While he would not name the major charities involved, the Red Cross and Salvation Army have been heavily criticised for not spending funds quickly enough, while the Celeste Barber Facebook fundraiser, which raised a whopping $51 million for the NSW Rural Fire Service, continues to shake the sector.
Dr Johns said he was pushing to ensure this latest investigation was made public.
“The thing that we're going to do later this year is I'm talking to three big charities – I can’t name them – that were involved in the bushfires. And we're going to undertake an investigation of each, into their expenditure of money. The trick is I’m getting their permission to make it public. All of our investigations are governed by secrecy provisions, but if we do it carefully, I’ll be able to make this public.
“The story I want to tell is what does it take if you're say a small charity that probably gets $3 million a year and you get $60 billion thrown in at you within two weeks? How do you manage that? I want to tell that story because it builds enormous expectations that those monies have to be handled well. So I want to tell that side of the story to the donor before the next bushfire season – we’ll publish this in October, hopefully.
“I want to inform the donor, hey, you press a button and the money goes in on the basis of some emotional response to the TV, the next bit is really quite difficult, managing it properly, spending it according to your trust deed – think NSW Rural Fire Service here. You have to abide by the rules. So I'm going to use these three case studies to explain to the public, with real live examples, just what it takes to do a good job as a charity.”
Our Community’s role in better quality information about charities
Our Community continues to assist the ACNC in its mission to better inform the public about charities, using a high-tech system of classifying charity types.
Dr Johns said the ACNC was working towards greater “visibility” of charity information by building website functionality that would enable potential donors to search for charities with particular characteristics. “Tell us what you do. Let me find it,” he said.
The functionality will be based on the CLASSIE taxonomy developed by Our Community. CLASSIE stands for Classification of Social Sector Initiatives and Enterprises, and it is already widely used by grantmakers in Australia and New Zealand via the grantmaking platform SmartyGrants.
“The beauty of this is that a small charity running one program in one place has the same chance of being found as the mega charity running hundreds of programs all over Australia,” Dr Johns said.
“Not that we're doing it to even the playing field, it's just that you can be found for what you do, and Google can’t do this. We think that will really make the sector more visible.”