I have just suffered through a dose of Australian early morning television and six consecutive advertisements by charities. The “industry”, and I use that word intentionally, seems to have adopted the approach that “any dollar is a good dollar”, even if more than a quarter of their revenue goes on media marketing or commission agents.
At the beginning of 2024 there were over 60,000 individual charities in Australia and that is just far too many. Medium and large charities must provide an annual financial report – unless they are Basic Religious Charities – and they can be researched at the “Australian Charities and Not-for-Profit Commission (ACNC) website.
I like charities which are “run on the smell of an oily rag” by people who do it as a vocation – not for an economic return – but I recognise that some charities have to be large to serve their market and require “professional” management. Having said that my problems with charities are briefly as follows:
Religious Charities
To be recognised as a (tax deductible) charity in Australia, an entity must pursue a “charitable purposes for the public benefit”. The Charities Act provides for twelve charitable purposes, but includes “advancing religion” as a “charitable purpose” in its own right’. So, no need for a religious charity to necessarily advance health, education, culture, animal welfare – you know, normal charitable stuff.
And it gets worse. If a charity is considered a “basic religious charity” it doesn’t have to provide financial information in its Annual Information Statement, submit annual reports or comply with the ACNC Governance Standards and the ACNC does not have the power to suspend or remove a member of a basic religious charity’s governing body.
This is an unacceptable “carve out” which can only be explained by politics and the power that small religious cliques still yield in Australia. Australia is a secular country and I don’t want a single, tax deductible dollar supporting religions – particularly those which “obey only God’s law”, what ever God that may be.
Management Remuneration Reporting
Most medium and large charities are required to provide details regarding remuneration for “key management personnel”. However, regulations leave the definition of ” key management personnel” (KMP) to the charity, with the consequence that charities tend only report that, “KMP received remuneration of $XM per annum in 2023 – 2024”, and the KMP numbers may or may not include relatively lightly remunerated board members.
This is next to useless, and makes it almost impossible to determine remuneration provided to, for example, the CEO, COO and CFO. This is intended to be the case, but the situation is that most charities receive the bulk of their revenue from public donations and the government – and in that situation it is unacceptable that we receive less information about management remuneration than is provided by public superannuation funds and public companies. The reason this information is not provided is that the sums involved can be very inconsistent, at least in the public eye, with the ethos attached to running a charity.
I will give you some examples available from the ACNC website:
Possability Group – 14 key management personnel – $3,165,403 in 2023/24 – that’s $226,100 per KMP per annum
St Vincent de Paul Society NSW – 11 key management personnel – $3,415,554 in 2023/24 – that’s $310,505 per KMP per annum
World Vision Australia – 9 key management personnel – $2,648,000 – in 2022/23 – that’s $294,222 per KMP per annum
Unicef Australia – 9 key management person- $1,865,113 – in 2022/23 – that’s $207,234 per KMP per annum
Anglicare Victoria – 15 key management personnel – $3,985,208 in 2023/24 – that’s $265,681 per KMP per annum
Lack of Enforcement
Finally, the regulator seems to allow, particularly smaller, charities to continue operating even if they two or more years behind in their reporting. These are the charities that often have collectors outside malls and have their audits subject to statements indicating that there is no way to be absolutely sure that all cash collections get credited to the charity.
Why not simply suspend all charities whose returns are more than six months late, and make it a national requirement that all collectors show badges indicating that they are either volunteers or commission agents.
