Why Australia needs a list of good charities

July 11, 2017

Australians are a cynical bunch, and while we might have a lot of fun growing moustaches and pouring icy cold water over our head, deep down we’re having difficulty trusting charities. Research from the Australian Centre for Philanthropy and Non-for-profit Studies found that one of the main reasons people did not give was because of concerns about how the money would be used.[1] Listeners of Radio Melbourne’s Jon Faine’s forum on Charities and Philanthropy (27 July, 2017) were also quick to call in to share how disgruntled they were about the charities sector:[2]

“A large part of my comment will be to echo your frustration and downright anger at the pushy tactics of some of the charities…We were in the habit of giving on a regular monthly basis to quite a number of charities, but we’ve cut them all back.”

We all want our contributions to matter. Really matter. Personally, professionally, emotionally and financially. But true, meaningful giving is much harder than it seems.

Everyday we’re bombarded with a different issue and a different cause to be concerned about. As we should be. There are a lot of social and environmental problems that need to be solved, and as a society we should help those trying to solve these critical issues. But with more than 54,000 charities in Australia seeking our attention, support and money, we are all undeniably suffering from compassion fatigue.

The Australian Charities and Non-for-Profit Commission’s (ACNC) attempt to bring confidence to the sector by setting reporting and compliance arrangements for charities has been laudable. However, rather than drawing attention to good practice, the ACNC frequently issues warnings about the number of charities about to lose their charity status. In one of their latest releases, they warned people about giving.[3] This is not exactly sending a signal of confidence to the community.

The problem of mistrust cascades with much of society misinformed about what makes a good charity. People are obsessed with “how much of the donation goes to the actual cause” and seem to forget about whether or not a charity is delivering on its mission. Last month, the Courier Mail wrote an entirely misdirected article condemning charities for spending money on fundraising, further manifesting the myth that seeking funding is not a necessary activity for any non-for-profit in delivering on its objective.[4]

Having said all this, I too, completely understand why people become disillusioned with the charity sector. There is no denying there are poor performing charities. As a consultant, I have frequently been called in to clean up charity messes… dysfunctional boards, CEOs who’ve lost their way, staff who file en masse for protection at the Fair Work Commission, strategic plans that lead to dead end, and so the list goes on.

However, in Australia there are exceptional charities doing exceptional work to benefit those most in need. And that’s why we’re releasing the Good Charities Guide. We stand for good. For great. Not for perfect. Not for vanilla. We need to shift the conversation from one of condemnation of poor practice to one that celebrates great practice. As highlighted by the Fundraising Institute of Australia in its response to The Courier Mail’s article on Charities spend up to 83% of donations chasing more fundraising dollars (10 June) [5]:

“Brewing public distrust in the sector and undermining public confidence will do damage well beyond the professional fundraisers at the coalface; ultimately, those who bear the brunt will be society’s most vulnerable.”

There are a variety of independent organisations around the world working to try to build confidence to the sector. Charity evaluation companies in the US (such as ImpactMatters, Charity Navigator and Guide Star), Canada (Charity Intelligence) and in the UK (Charity Choice) are helping charities gain trust within the community. There is also guidance for more altruistic givers, with GiveWell and The Life You Can Save drawing attention to the charities that create the greatest impact at the lowest cost.

In Australia, we are following the lead of these international organisations to highlight our best charities. I started The Difference magazine to prove that with more transparency, donors would be more prepared to step forward and give. And give more. This proved to be true as we welcomed sizable new giving decisions from people from all walks of life.

With the delivery of a successful proof of concept, I have joined with Jessica Bowman to expand that mission and develop The Good Charities Guide. The guide will draw attention to Australia’s highest impact charities, making it easier for us to trust charities and pursue more and better giving.

References:

1. Australian Centre for Philanthropy and Non-for-profit Studies (2017). Giving Australia 2016 Fact sheet — Individual Giving. Available at http://www.communitybusinesspartnership.gov.au/about/research-projects/giving-australia-2016/

2. ABC Radio Melbourne. Philanthropy and Donating with Jon Faine: A forum on how we give to charity. 27 June 2017. Available at http://www.abc.net.au/radio/melbourne/programs/theconversationhour/the-conversation-hour/8636844

3. Australian Charities and Non-for-profits Commission. ACNC Commissioner warns public: be careful when giving this EOFY. 27 June 2017. Available at http://acnc.gov.au/ACNC/Comms/Med_R/MR_212.aspx

4. Tutty, J (10 June 2017). Charities spend up to 83% of donations chasing more fundraising dollars. The Courier Mail. Available at http://www.couriermail.com.au/news/queensland/charities-spend-up-to-83-per-cent-of-donations-chasing-more-fundraising-dollars/news-story/3355f4971802e6e230ca158c33c253c4

5. Edwards, R. (13 June, 2017). Response to The Courier Mail. Fundraising Institute of Australia. Available at https://www.fia.org.au/news.php/351/response-to-the-courier-mail

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