The way that NFP fundraising is regulated is complex, inconsistent and wastes millions. AICD NFP Policy Adviser Lucas Ryan GAICD explains the urgent need for reform and how you can support the campaign.
Add your voice to the campaign at: justiceconnect.org.au/fixfundraising
Fundraising is a vital source of income for Australia’s not-for-profit (NFP) sector. Charities (which make up 10 per cent of the broader NFP sector) collect as much as $6.8 billion in donations and bequests every year. Fundraising is often the most high-profile, visible activity undertaken by an NFP and provides an important channel for members of the community to contribute directly to the sector and its work.
However, the way fundraising is regulated is complex, inconsistent and wastes as much as $15 million a year in compliance costs for charities alone. There are seven different fundraising regimes across Australia, meaning that NFPs operating in more than one jurisdiction (or that collect donations online) must meet the legal and administrative requirements of multiple regimes.
Australian businesses would never be expected to operate under such a fragmented and out-of-date regime. The AICD believes that NFPs have struggled under a second-class regulatory regime for far too long.
To address the urgent need for fundraising reform, we have partnered with leading sector agencies to release a joint statement calling on Australian governments to provide NFPs with a modern and appropriate regulatory regime for fundraising.
The high costs of remediation
A security incident can take significant time and money to deal with effectively while also posing a substantial reputational risk to a company. One of the biggest contributors to this cost is the time taken by staff to remediate an incident, but loss of business is also a significant contributor. According to a survey of organisations in seven countries in Europe, Asia and North America by the Ponemon Institute, the average time taken for remediation varies by incident type from 2.6 days for viruses, worms and trojans to 58.5 days for malicious insiders. Each incident can require multiple staff members to resolve or manage and this rapidly escalates to a large cost. This does not count the cost of reputational damage which is difficult to quantify or the potential cost of criminal or civil action, resulting from the theft of personal information.
Australian businesses would never be expected to operate under such a fragmented and out-of-date regime.
The statement sets out a simple proposal for the regulation of fundraising: clarify the Australian Consumer Law to ensure its application to fundraising is clear and broad; and repeal existing state and territory regimes.
This would, in effect, create a nationally-consistent regulatory regime and dramatically reduce red tape for NFPs around Australia.
The Australian Consumer Law is jointly enforced by all Australian governments. As a means of achieving reform, it effectively avoids the political challenges of uniform legislation regimes or the referral of state powers. As a regulatory regime, it is well understood by the community, would provide better protections for donors, and has access to a range of more appropriate and proportionate enforcement powers. It is a fundamentally better way to regulate fundraising.
The statement is jointly signed by the CEOs of eight leading sector bodies including: The Australian Institute of Company Directors, Justice Connect, Governance Institute of Australia, the Australian Council of Social Service, Chartered Accountants Australia and New Zealand, Community Council for Australia, CPA Australia and Philanthropy Australia.
Since the launch of the statement last week, a number of charities and individuals have added their voice in support of the campaign.
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