At a recent lunch held by Anglicare, Treasurer Peter Costello delivered a sobering message to churches and charities. That they had to lift their game if they were to retain the public's trust.
The Treasurer's remarks about the churches centered on their shameful handling of sexual abuse issues. Costello's comments on charities were a reference to the controversy surrounding the venerable Red Cross and the millions it raised for the victims of the terrorist bombing in Bali.
The reasons for this are understandable. When the story broke in the media, some $6.6 million or 46% of the funds raised were either being spent on projects not related to the victims or held back with the potential to be spent on other projects. At that time only 54% or $7.7 million had gone directly to the victims of the Bali bombing.
In Red Cross' defence it has to be said that most of the money diverted to "other" projects was spent on worthy projects -- such as research for "spray on skin" for burn victims. The funds were definitely not squandered on junkets, political activism, talk-fests, or excessive fundraising which is so prevalent in the foreign aid industry.
Nevertheless, the reaction of donors, the media, the public and politicians was savage. There was a widespread belief that more should have gone directly to the victims. This was predictable. The tragedy struck home personally to many Australians. The Red Cross' Bali Appeal offered a means of combating the sense of powerlessness that many Australians felt after the appeal.
The Red Cross's woes were increased tenfold by way it handled the scrutiny; namely a lack of candour and openness.
What went wrong? In short, the lack of transparency that masks the entire charity sector finally caught-up with the Red Cross.
When foreign aid NGOs, like the Red Cross, see a crisis or humanitarian disaster overseas and use the imagery as packaging for a fundraising appeal.
The Bali Appeal differed crucially from appeals in Afghanistan, Iraq, Ethiopia and countless others mounted by aid NGOs. This time, the victims and beneficiaries were not people in a far off developing world nation; they were Australians who were aware of how much had been raised and how much they were getting and most importantly, had access to the media.
The point has to be made that if the Red Cross has problems, which is by all measures, one of the most open and best governed charities in this country, the situation elsewhere in the industry is surely grim.
What was the most striking part of the controversy was the absence of groups like Caritas, Care, Plan, Save the Children, World Vision and Oxfam Community Aid Abroad from the debate. None of these organisations, or the prominent public figures associated with them neither defended nor criticised the Red Cross' handling of the matter.
Disclosure standards in the non-profit sector are poor particularly relative to those applied to business and government. If for example, business raise funds from the public, they must provide a prospectus detailing purpose, performance targets and proposed allocation of funds. Failure to comply with this prospectus will usually mean prosecution by regulators.
They also must report to investors on regular basis against the prospectus. Non-profits almost never do so; indeed the Red Cross has provided more detail on their Bali Appeal, albeit belatedly, than any recent fundraising drive. And the salient information only started appearing on the web site after the media started asking questions. Most charities provide detail in advance and no follow-up detail on their fundraising activities. In fact, most charities only provide promotional material about themselves none of which is objective or detailed.
Many charities do not even provide the basic data for the public to make informed decisions about charitable giving. For example, it was recently reported a survey of 112 Victorian charities found that 57 per cent did not disclose the cost of fund-raising including administration and marketing costs.
The controversy over the Bali Appeal has for once asked people to question where the money goes when they give to good causes? It is a question that people should be asking more often.
No comments:
Post a Comment