ACNC Changes are Coming, but is More Needed?

ACNC Changes are Coming, but is More Needed?

For the Australian non-profit sector, the ACNC is a source for factual information about charities, without bias or persuasion. I am reminded of former U.S. President Ronald Reagan’s use of the proverb “trust, but verify” in discussions surrounding nuclear disarmament. It is important to trust in the integrity and altruism of philanthropic organisations, but ACNC provides the verification that these organisations have the right credentials to operate.

Yet for a variety of reasons, some legal and some structural, there are limitations on what ACNC can verify. ACNC cannot tell you if a current charity is under an investigation for possible fraud or maleficence, and, if a charity loses its Deductible Gift Receipt (DGR) status, the Agency is prohibited from publicly reporting on the reasons why DGR was revoked.

At the Queensland Community Foundation Inaugural Philanthropy Seminar, hosted by BDO, the guest speaker was the Commissioner of Australian Charities and Not-For-Profit Charities (ACNC), the Honorable Dr Gary Johns. In his talk, entitled “Let the Data Talk”, he touched on an array of topics that included laying out the plan for upgrading ACNC’s website to be re-launched in September.

One rationale for the upgrade, as explained by the Commissioner, is to allow donors [1] to search by an area of personal philanthropic interest to find a possible charity match. Exact details were not made available on how a potential list would display search results, but Dr Johns emphasised that the search would not play favourites: smaller non-profits would have the same potential of displaying as the larger charities. For example, information returned would list charities that help the environment or feed the homeless, depending on the search criteria.

This new feature, along with the upgrading of a rather antiqued website, is a positive step forward. However, I question whether the underlying rationale of the update — allowing potential donors to search the list in order to find a charity to donate funds — is what donors are clamouring for.

In my experience, which consists of nearly 30 years in non-profit fundraising and engagement, I have never encountered donors who have found it difficult to find a charity that aligns with their passion and interests. Most non-profits do a pretty good job of self-promotion and engaging in community awareness campaigns, and these charities often provide that nudge, via an appeal, to get a potential donor thinking. Analysis of the daily traffic of the ACNC website was not shared during the talk. Also, information is not collected when landing on the site that determines whether the site visitor is a potential donor or other—that is, we don’t know whether a donor is searching more frequently, or if they are an accountant, lawyer, or consultant who may be searching for business purposes.

In my view, donors would benefit more from the capacity to verify the practices of a charity more than improved search functionality (although this too is important in the digital age).

Unfortunately, the ACNC is legally unable to report on whether a charity is under investigation, or why its DGR status been revoked. But what about the economic performance of a charity?

What percentage of their gift goes towards programs compared with administration? For some donors, the salary of the top executives is a factor in determining whether they will donate. This can be either a current donor who learns economic information that bothers them (and may lead them to refrain from gifting again) or it can keep a future donor who rules out making a gift to a particular charity.

Each donor is different, with their own personalised system for selecting a charity to support. Some donors may donate to a charity because a friend asked them to or, if that charity is endorsed or supported by a particular philanthropist or community leader, this recommendation may be enough to secure their own support. Other donors seek a personal experience with a charity and from that experience have all the information they need in making their decision. Such donors may never use the ACNC’s website in making their charitable decisions; however, the availability of information that allows donors to verify or double check what other sources are telling them is important for accountability and transparency. An economically oriented donor, for example, does care about the salary of the top executive when making their decision. Also, I suspect donors want to know if a charity they are supporting, or thinking of supporting, is currently under investigation for possible fraud.

For an economically driven donor, therefore, the ability to use the site to pull the list of all charities providing services to the homeless, for instance, would enable them to identify charities where the salary of the CEO is a specific percentage of the overall operational budget instead of other charities where the percentage is higher. I appreciate that there are a plethora of other variables involved and one of these may be that one charity paying a higher salary is doing a better job than another charity. However, until a useable matrix that can properly evaluate impact and outcomes is in place, donors must rely on the available information that is provided to them by the charity, media, those associated with the charity, and ACNC. Unfortunately, the information gathered by all these sources isn’t always of equal reliability and neutrality.

To function as a useful first stop for a potential donor, the ACNC website would need to include the key financials without digging—in a universal format so a donor doesn’t need to decipher various annual reports—the purpose of the organisation within the various charity classifications, the status of the charity (i.e. in good standing or not, or some type of star rating of charities), and perhaps even testimonials from donors about their experience in supporting an organisation. There are a number of other variables that could be usefully included in addition to this. I appreciate that getting the right information is a challenge as some may be difficult to quantify or gather, such as outcomes or impact. Further, the law prohibits certain information from being shared and this issue doesn’t sit with ACNC. More, though, can be done to ensure that the ACNC gives donors the best possible information about the integrity and efficacy about the causes they support.

I am looking forward to the new and improved ACNC website. I hope the approach of improving the site proves to be continuous as more and more information is provided to help donors make informed decisions when they undertake a “trust, but verify” check of an organisation.

[1] It should be noted that the Commissioner in his presentation defined donors as taxpayers, government, and philanthropic donors. I am defining donors here in the context as a donor who voluntarily gives a donation and receives a DGR.

Dr Jason Ketter

Dr Jason Ketter

Senior Fundraising Consultant at AskRIGHT

Jason brings more than 28 years of fundraising and engagement experience to clients in their quest to raise more money.

To find out how Jason can help your organisation, contact j.ketter@AskRIGHT.com.
Dr Jason Ketter

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