Overseas

In the United Kingdom, all charitable bodies must be registered with the Charities Commission, which involves meeting certain requirements depending on the size and type of organisation. For example, charities with annual incomes greater than £10,000 ($19,600) have to present their accounts yearly, which are then made publicly available to facilitate donors’ access to relevant information. In Canada too, every charity must be registered with the Canada Revenue Agency, which is part of the Ministry of Finance.

An undervalued Australian sector

Australian charities are not currently monitored by any sort of centralised body. However, Professor Mark Lyons, Director of Research at the Australian Centre for Social Impact, says that this issue of a regulatory entity encompasses much more than just charitable organisations, since they “are only a small part of [Australia’s] not-for-profit sector”.

Former head of Philanthropy Australia Elizabeth Cham says that the NFP sector “is so important in terms of Australian society,” and its great value is too often not recognised, even by those within the sector.

“It’s a broad sector and people are connecting with it all the time; they’re using the services that it provides all the time, but they’re totally unconscious that that’s what they’re doing. Even the notion of an NFP sector, most people out there don’t have it; they think it’s a charity sector.

“The sector itself doesn’t understand itself or know about itself. People who work in the sector are always surprised when you speak to them and tell them the size of it.

“People who work in the same area hardly ever meet,” Cham says. “The people in the sector don’t value what they have, which is extraordinary knowledge.”

She says that not enough is known about the third sector, which comprises approximately 700,000 organisations. “The sector needs to be better known to the Australian community and I think the time has come.

“Business, tourism, education, all these other very important areas within the Australian community: people are doing updates on them all the time. And this sector: it’s just as though it doesn’t exist.”

Do We Need an NFP regulatory body?

Cham believes that the establishment of an expert, regulatory body would bring more cohesion to the sector, and would foster greater recognition and understanding among the wider community.

“There are many things [such a regulator] could do, and it would be an acknowledgment that [the NFP sector] is an important sector if there was a body set up that was devoted to it and its welfare.”

More specifically, Professor Lyons says that Australia needs “a single national law incorporating larger nonprofit organisations, mandating their fundraising and regulated by a National Nonprofits Commission.”

Dr Wendy Scaife from the Centre of Philanthropy & Nonprofit Studies at Queensland University of Technology says that Australia would undoubtedly benefit from an NFP regulatory body that was “well crafted and well resourced”.

In particular, Dr Scaife says such a body needs to:

* Be independent. * Embrace the whole sector, not just charities. * Be a ‘smart’ light touch regulator who knows about the sector and how it operates – it’s got to facilitate and educate, not stifle. * Ensure the foundational building blocks are in place such as accounting standards, new fundraising applications beyond just FIA members, a national compact and definitional clarity. * Have as part of its mission ‘to build public trust and involvement in the not-for-profit sector’. * Learn from the recent reforms (as in New Zealand, the UK, Singapore and South Africa) and their implementation issues.

An all-encompassing body with these qualities is, according to Dr Scaife, “essential infrastructure for the kind of future demands and possibilities the NFP sector will face.

“We don’t just need one; our nation’s communities deserve one.”