Australian charities drowning in regulations and ‘red tape’

Australian charities drowning in regulations and ‘red tape’

01 June 2021 By Lauren Croft
Australian charities drowning in regulations

A major new report has shown that Australian charities are being increasingly impacted by outdated laws and red tape. 

The report, co-published by Justice Connect’s #FixFundraising campaign and the Charities Crisis Cabinet, surveyed over 600 charities and not-for-profit groups around Australia. 

The ongoing #FixFundraising campaign is backed by over half a dozen partners, including the Governance Institute of Australia, whose chief executive Megan Motto said Australia’s fundraising laws need to be reformed. 

“This report calls attention to just how impacted the charities sector is by a vast amount of red tape and outdated laws,” she said. 

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“Australia’s fundraising laws are in urgent need of an overhaul so that this sector can simply get on with the job at hand – helping some of society’s most vulnerable people – rather than get tangled up in unnecessary red tape.”

Every year, Australian charities spend millions attempting to comply with complex fundraising regulations rather than focusing on raising money for their cause. Each state and territory has different fundraising regulations, which often clash with each other. 

The Fundraising Survey 2021 report states that 40 per cent of Australian charities say current fundraising rules are causing them “an unnecessary financial burden”. One in five believe the current rules and regulations for charities have become a major barrier to fundraising.  

Justice Connect’s head of not-for-profit law and lead for the #FixFundraising coalition, Sue Woodward, said the report uncovers the extreme burden on Australia’s smaller charities.  

“Many small charities rely on volunteers and often have inadequate resources to comply with the out-of-date fundraising laws,” she said.

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Australian charities employ over 1.38 million staff and 3.6 million volunteers, amassing over $11.8 billion in donations each year. The average registration and compliance costs are over $11,000 and different registrations are needed in each state. If fundraising online, charities need to comply with regulations from every state and territory. But according to the report, 39 per cent of Australian charities and NFPs are not aware of this fact. 

Ms Woodward said that this hinders charities from doing meaningful work.

“It’s not revolutionary to have a donate button on your organisation’s website and unsurprisingly many more charities were forced to go online with their fundraising efforts during COVID-19. But charities need to comply in every single jurisdiction if fundraising online – so the simple act of the donate button means trying to comply with seven different laws (each state and the ACT),” she said.  

“This report highlights just how problematic and costly these laws are for the sector.”

Ninety-seven per cent of surveyed respondents support the #FixFundraising solution of having nationwide laws and regulations for Australian charities. The findings of the report will be used to help the campaign continue to fight for a single national scheme for the regulation of charitable fundraising, so that charities and not-for-profits can focus on delivering vital services to Australian communities.

Australian charities drowning in regulations and ‘red tape’
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