Time to scrap the charity commission

| February 13, 2014

There have been calls to slash the charity regulator, the ACNC. Helen Rittelmeyer, Policy Analyst at CIS, urges the government to stay firm in abolishing the charity commission and reduce red tape in the not for profit sector.

The Australian Charities and Not-for-Profits Commission (ACNC) was created in December 2012 to relieve some of the red tape faced by charities in Australia. After a year in operation, how is the ACNC doing?

Not too well. Much of charities’ undue paperwork burden is the result of lack of coordination between the federal and state governments. Unfortunately, the ACNC has not come to any paperwork-reduction agreement with the governments of NSW and Victoria, which between them contain the majority of Australian charities. Only South Australia and the ACT have come on board.

Far from reducing red tape, the ACNC has added to the charity sector’s burden. Every charity registered in Australia must now fill a new form called the ‘Annual Information Statement’ (AIS). The AIS contributes ‘no additional transparency’ and amounts to ‘unnecessary pen pushing,’ according to the head of Catholic Education Melbourne. The director of UnitingCare has accused the ACNC of having ‘created an initial additional layer of reporting which could have been avoided.’

It is no surprise that the ACNC has failed to make significant progress on its main goals, since other countries that have experimented with charities commissions have found they are not an effective model of charity regulation.

New Zealand abolished its charity commission in 2012, because the commission was not providing value for money. Its responsibilities were handed over to the Department of Internal Affairs, saving the taxpayer $2 million. There is no evidence that charity regulation has declined in quality since that changeover.

In Britain, the Parliamentary Accounts Committee has concluded that their charity commission is ‘not fit for purpose.’ A series of scandals over the past year has left Britons with the impression that the Charity Commission for England and Wales leaves the hard work of detecting charity fraud to other agencies, like Her Majesty’s Revenue and Customs. Tax scams masquerading as charities were routinely re-approved for charitable status by the commission until the tax office alerted them to possible fraud.

In Australia, ‘the ACNC does not investigate criminal activity, as these matters are for the police,’ according to an ACNC deputy commissioner. Law enforcement has a strong record in detecting wrongdoing by charities—just ask the Friends of the Underprivileged Task Force, Chronic Obstructive Pulmonary Disease of Australia, or the Australian Vaccination Network, all of which were busted by state investigators.

If not investigating and punishing the tiny fraction of the sector engaged in wrongdoing, what services is the ACNC providing for Australian taxpayers? The truth is that few of the ACNC’s functions benefit either charities or the taxpayer, and those of its functions that are necessary could easily be handed back to the agencies responsible for them before the ACNC was created.

Charitable giving is at a turning point in Australia. The donations market is beginning to shift towards structured multi-year grants where the relationship between donor and charity goes beyond writing a cheque. More and more high-net-worth Australians are setting up private foundations to structure their giving in a more long-term way.

In the past, when Labor governments have floated the possibility of new regulations, high-wealth donors have pulled back and donated less. The worst thing the government could do would be to add to this skittish population’s regulatory burden just when their charitable giving is increasing.



  1. cfritz@globalaccesspartners.org


    February 23, 2014 at 12:01 pm

    Dear Helen, this is a very

    Dear Helen, this is a very interesting and timley blog. I have just spent months filling in documents, submitting and re-submitting them to the ACNC in a bid to achieve DGR status for a charity that is close to my heart. It was interesting to read that the ACNC was originally set up to relieve red tape. Thank you for your post.