Having a ball at your expense

In The Charity Ball, Gary Johns quite rightly focuses on the need for donors to be better informed of the real purposes and goals of the many organisations and entities that are today calling themselves charities.

In the time of Dickens charity may well have begun at home, but today the number and variety of charities have proliferated on an industrial scale.

This charitable escalation, if I can call it that, has been amplified by the application of digital technology so that 'problem promoters' - as Gary refers to them – page 197 – I did my homework – can now 'problem surf' – page 11- on Google for whatever cause they choose.

So in this brave new world – we have a new generation of Hashtag crusaders – charities are sexy – but, 'clicktivism' does not a social conscience make.

But ease of access to Twitter handles and online information has not necessarily translated to donors being properly informed of the bona fides of the organisations they choose to support.

As Gary quite bluntly, but regrettably and very accurately puts it, too many charities in Australia do little or no charity work. Too many receive most of their income from government and too many lobby government for even more.

The 'charitable purpose' being pursued here is all too often the pursuit of the charity's own existence.

What is even more ironic in this debate is that when the terrible spotlight of accountability and governance is applied to some charities they cry foul and embark on a crusade of moral indignation railing against any who would dare question their legitimacy.

As Australians, we are known as being an incredibly generous people and Gary can speak more meaningfully about what his research reveals on the statistics of moneys raised etc.

Equally, I would hazard a guess that probably everyone in this room has at some stage in their lives given to at least one charity, whether that be through buying Girl Guide biscuits, handing in old clothes to St Vincent de Paul or some kind of disaster relief.

I am actually a great believer in the generosity of people, but I also subscribe to the views expressed by J D Rockefeller when he said: "Charity is injurious unless it helps the recipient to become independent of it."

In my view, charities should not become their own growth industry and to the extent that they mislead donors as to their true intent and purposes then we should call out those activities for what they are – fraud.

In 'The Charity Ball', Gary has forensically examined the processes followed by many charities and how they structure themselves for maximum benefit – particularly in terms of achieving deductible gift recipient (DGR) status.

The magic DGR acronym - and this is where the fun begins.

If an organisation is endorsed as a DGR as a whole, gifts to the whole organisation will be tax deductible. Alternatively, if an organisation is endorsed for a fund, authority or institution it operates, for example a public fund maintained by an organisation that is on the Register of Cultural Organisations, only gifts to that part of the organisation are tax deductible.

Currently there is an inquiry of the House of Representatives Standing Committee on the Environment, chaired by my parliamentary colleague the Member for Mitchell, Mr Alex Hawke, which has adopted an inquiry referred by the Minister for the Environment, asking the Committee to inquire into and report on the Register of Environmental Organisations. This inquiry is ongoing, however, it will only report on environment sector organisations.

In my view, political lobby groups generally, not just environmental organisations, should not be extended the benefit of having DGR status, especially where their activities have little to no relationship with what may have been their original charitable and/or philanthropic purposes.

And with this exact purpose in mind, I have recently written to the Prime Minister suggesting that he commission a broader inquiry examining the DGR status of all political lobby groups.

There needs to be clarity around these issues – not just for charities, but more importantly for donors.

We do not want to see a situation where scepticism as to the bona fides of charitable organisations leads to donor jaundice.

A good place to start in getting a better understanding of the current environment is with Gary's latest masterpiece – 'The Charity Ball'.