Opinion & Commentary
Big Brother deters charity
Last year, the federal government set up the Australian Charities and Not-for-Profit Commission to regulate the nation's 600,000 charities and not-for-profit organisations.
The government said the reforms would restore public confidence in the charitable sector, which has 900,000 employees and 4.6 million volunteers.
Once trust had been renewed, it was expected Australians would again donate to their favourite charities.
But the reforms are little more than a pretext to extend government control over the sector and will likely to lead to the notion that charities are just another arm of government.
The new regulatory framework tips its hat to the 2010 Productivity Commission report Contribution of the Not-for-Profit Sector.
Partnership between government and the charitable sector is seen as the best way to address pressing social need. Since charities are responsible for money donated privately or awarded from public funds, some degree of regulation is to be welcomed.
Even in its first few months of work, the commission has been investigating instances of fraud and misleading behaviour on the part of some charities.
But in couching its intentions in terms of shared values and responsibilities, the government has paid only lip service to the Productivity Commission's report. In fact, the new regime imposes reporting protocols that are likely to add to the administrative burdens already borne by charities and make it harder for them to work effectively.
At one time, charities largely depended on private, voluntary action. Today they depend on high levels of public funding.
According to the Productivity Commission, government transfers amount to one-third of the sector's income.
"Charity in Australia is so closely tied to government it would fall over if government handed over the reins," Gary Johns warned recently. And because charities increasingly work in conjunction with the state, they run the risk of becoming lobbyists on behalf of the government. The greatly expanded range of services delivered by the charitable sector on behalf of the state not only strains an understanding of partnership but also puts pressure on the meaning of the word charity.
From January next year, a new statutory definition of charity will take effect that is likely to allow charities a more activist voice in political debates. Public consultations on the exposure draft of the proposed legislation are already under way. But in attempting to clarify 400 years of the common-law tradition, the 2012 act threatens to debase the concept of charity.
Dwindling income from voluntary contributions may have provoked fears that the public has lost confidence in Australian charities. But the real problem may be that charities have lost confidence in themselves.
Speaking in the House of Lords during the passage of Britain's Charities Act 2006, Ralf Dahrendorf said, "A thriving civil society consists of a creative chaos of voluntary and essentially private activities by individuals and their associations." He argued this creative chaos was best encouraged by a lighter regulatory approach for smaller charities and by imposing the discipline of consumer choice on larger charities that received government funding.
It's an argument the federal government would have done well to heed as it devised its reform program for the charitable sector. Instead, as the government extends its reach yet further, the creative chaos of private and voluntary action that lies at the heart of charitable endeavour in a healthy civil society is being stifled.
This doesn't just run the risk of deterring individual donors and philanthropists. It threatens to weaken the spirited involvement of Australians from freely choosing to associate and act, independently of the power of the state, for the benefit of all.
Peter Kurti is a Research Fellow at The Centre for Independent Studies and author of In the Pay of the Piper: Governments, Not-For-Profits, and the Burden of Regulation.
