Charities Amendment Bill 169-1 – its impact and risks
27 April 2023
utline
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Focus on Purpose –
What Does a World-Leading Framework of Charities Law Look Like?
10 April 2022�by S Barker
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Government
For purpose sector
Government
Civil society
Business
Family
Charitable sector
the charitable sector is:
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“the invisible subcontinent on the social landscape of most countries, poorly understood by policymakers and the public at large, often encumbered by legal limitations, and inadequately utilised as a mechanism for addressing public problems”
- Dr Lester M Salamon
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Government
For purpose sector
Government
Civil society
Business
Family
Charitable sector: $73 billion assets under management
“Civil society is essential to building a strong society and economy and I believe that all of us, regardless of political persuasion, should passionately, explicitly and unashamedly support people getting involved in their community, coming together in clubs, groups and societies, starting charities, social enterprises or community businesses. Doing things for the wider public benefit, not simply private gain.
We know that a better future is about more than growing the economy. In a famous speech of more than 45 years ago, Robert Kennedy said that GDP “does not allow for the health of our children, the quality of their education, or the joy of their play. It measures neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.” For many, the answer instead lies in civil society. It is charity and volunteering that allow them to find identity, meaning and purpose, a sense of autonomy, pride and utility. It is often how we find balance in our lives, pursue our passions, or fight for change. And for society at large, it is often how we build stronger communities, give people a say in what happens to them. It is how we provide services that people depend upon, develop new ways of doing things, and nurture the people who will lead our future.”
- Sir Stuart Etherington, former chief executive, National Council of Voluntary Organisations, January 2019
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Government
For purpose sector
Government
Civil society
Business
Family
Charitable sector: private organisations for public purposes
International “wave” of charities legislation:
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Is all this “regulation” working?
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Surveys of public trust and confidence: | |
2008 | 6.6 |
2012 | 5.9 |
2016 | 5.9 |
2019 | 5.9 |
2021 | 6.5 |
Tax expenditure analysis
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Tax expenditure analysis (cont’d)
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“Modernisation” strategies
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Underlying clash of paradigms
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Restrictive | Enabling |
Tax privileges for charities seen as a subsidy, equivalent to a direct grant, awarded based on government perceptions of what is worth subsidising out of public funds, rather than ‘public benefit’ | Tax privileges seen as an investment in an overall system that manifests liberal democratic values, such as pluralism, diversity, tolerance and human flourishing |
Third sector - charities seen as an (underfunded) service delivery arm of government | Civil society - charities’ traditional advocacy and watchdog roles celebrated and protected |
Public organisations | Private organisations (for public purposes) |
Bureaucratic risk aversion – focus on measurable inputs and outputs (neoliberalism) and the perception of the public interest to which the government of the day seeks to give effect in its policies | Independent - focus on outcomes and impact, charities able to experiment and innovate, self-determination: ‘communities know best what communities need’ |
Efficiency | Effectiveness (even if messy and ‘inefficient’) |
Charitable funds seen as government funds: state control through command and control ‘regulation’ | Charities accountable for expending their own funds as they see fit in furtherance of their stated charitable purposes (subject to the general law) |
Suspicion | Trust |
Autocracy | Liberal democracy |
Underlying clash of paradigms (cont’d)
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Restrictive | Enabling |
Narrow, deficits-based – paternalistic, colonialist, Victorian concept of handouts to the poor – “assuaging need” | Wide, strengths-based - supports innovation and prevention – communities know best what communities need – human flourishing |
Focus on direct benefits | Indirect benefits taken into account |
Focus on granular assessments of activities, in isolation from the purposes in furtherance of which they are carried out | Focus on fidelity to purpose |
Equitable principles ‘crowded out’ by black letter ‘ex ante’ rules | Equitable principles (such as duty of loyalty to purpose) recognised and enforced, obviating the need for additional rules |
Ever-increasing complexity – distract charities from their purposes and enliven a culture of regulatory gaming | Simplicity – flexibility within clear boundaries |
‘Fiscal consequences’ – lack of transparency in decision-making | Public benefit, a question of fact as established before an independent judicial adjudicator operating as a trier of fact on the basis of established rules of evidence |
Subjectivity | Objectivity / rule of law |
Regulation as an end in itself | Regulation as a means to an end: intervention limited to cases of impropriety or illegality |
Review of the Charities Act
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Labour party policy 2017
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Charities Amendment Bill 169-1
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Links:
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