Cutting Red Tape is called for by the latest ACNC and Deloitte joint report.

The ongoing issues surrounding the complex regulatory requirements for charities in Australia were put into some perspective recently with the release of a report by Deloitte Access Economics.

Commissioned by the Australian Charities and Not-for-Profits Commission (ACNC), the report entitled:
Australian Charities and the Not-For-Profit Commission – Cutting Red Tape has its focus on ‘Options to align State, Territory and Commonwealth charity regulation’. It delves into the confusing and overly duplicated requirements for Charities to remain compliant on both an Industry, State and Commonwealth level.

Jumping through many Hoops

With many Charities and NFP organisations having multi-state representation, it was obvious, reading the report, that there was an urgent need for these regulations to be considerably reviewed.

Some major burdens were highlighted in the report not the least being that legislative arrangements had not kept pace with the development of contemporary fundraising such as web-based donations and crowdfunding. While residing in one state, organisations were having to be compliant in ALL states where the money was collected – even if only via the net. The resulting compliance costs effectively minimising their ability to operate at a sustainable level.

Variation between the States and Commonwealth in terms of compliance reporting was highlighted as a major concern with unnecessary burden being placed upon organisations.

Some Realistic Options

The basic idea of the commissioned report is that the requirements for charitable organisations in Australia needed to be updated to take into account the new environment. Changes in funding, especially considering the roll-out of the National Disability Insurance Scheme (NDIS), and to the manner in which fundraising and charity work was delivered, requires that the ACNC, State and Commonwealth Government should all somehow work towards an alignment of their policies and regulations.

Having developed a compelling argument for change, the report goes on to present a range of options which were put forward with a view to at least getting some movement to the current situation:

  • Base case – Continuation of the current arrangements
  • Option 1 – ACNC obligations fulfil State and Territory regulatory requirements
  • Option 2 – Alignment of State, Territory and ACNC regulatory obligations
  • Option 3 – ACNC as the central regulatory body

Initial recommendations highlighted the initial adoption of Option 1 being seen as the best “bang for the buck”. While this would see the least disruption to the present system, the potential for major savings would come with the adoption of Option 3 as the most efficient way to eliminate the Red Tape and minimise cost.

To put things in perspective, it is estimated that the present cost to the Australian Charity sector (approx. 54,000 organisations) is in the vicinity of $34.9m annually.

The options presented above would provide the following savings against the base case figure (above).

Option 1 – $14.31m

Option 2 – $19.60m

Option 3 – $29.38m

With the possibilities of achieving such impressive savings, it would stand to reason that some action has to be taken soon. The ongoing development of the charity and non-profit sector in Australia must be acknowledged by the regulators – these changes are well past their due date!