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Government Strangles Charity
Reforms intended to boost public confidence in Australia’s $43 billion charitable sector risk turning the sector into just another arm of government, according to a new report from The Centre for Independent Studies.
“At one time, charities largely depended on private, voluntary action. Today, they depend so much on high levels of taxpayer funding to do their work that they run the risk of becoming lobbyists on behalf of government,” says CIS researcher Peter Kurti in In the Pay of the Piper: Governments, Not-for-Profits, and the Burden of Regulation.
Last year, the Gillard government set up the Australian Charities and Not-for-Profit Commission to regulate the nation’s charities and supposedly build public trust in the sector. Dwindling income from voluntary contributions may have provoked fears that the public has lost confidence in charities.
“The real problem is that charities appear to have lost confidence in the true concept of charity and have become used to depending on government,” says Kurti. “The new regulatory regime will not only add to the administrative burdens already borne by charities. It also threatens to fundamentally change the meaning of charity.”
There are even plans to extend the meaning of charity with a new statutory definition to include political activism. The result will be that charities are going to find it harder, not easier, to do their work effectively.
“Some level of regulation of the charitable sector is necessary to prevent fraud but the new regime goes too far, extends the reach of reach of government further and further, and threatens the real meaning of charity.”
“As government extends its reach,” argues Kurti, “it will deter all those Australians who want to donate to their favourite charities and support good works across the nation.”
International evidence indicates that every dollar the government gives to charity drives away up to 40 cents in private donations.
“The voluntary spontaneity that lies at the heart of charitable endeavour in a healthy civil society is in danger of being stifled,” warns Kurti. “Government needs to get out of the way of charitable giving.”
Peter Kurti is a Research Fellow with the Religion & The Free Society program at The Centre for Independent Studies
He is available for comment.
The CIS paper –In the Pay of the Piper: Governments, Not-for-Profits, and the Burden of Regulation is available at the CIS website.
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