Charities' That Are Really Political Lobbyists Must Be Exposed

This is not about the Government silencing critics.  It's about accountability.

The response of the non-profit sector to the Howard Government's draft charity legislation is an example of the sector's aversion to accountability.

The legislation was condemned as an attempt by the Government to "silence its critics".  This response itself illustrates the problem, which is that a growing proportion of the sector has moved away from providing services to political lobbying.

This trend has been masked from the community by poor standards of transparency and accountability and is not only at odds with the original intent of the law but with the expectations of the community.  It has also spawned dangerous liaisons between business and political parties and charities.

The draft legislation correctly attempts to limit the politicisation of the sector and its attendant problems.

Over the past decade successive governments have indirectly relaxed the definition of charities by allowing ministers to give gift-recipient status for a wider range of purposes, including the environment, culture, education and health.  This has resulted in a large increase in the number of "charities".

The draft legislation accepts the need for a wider range of charitable purposes and for these to be explicitly spelt out in the law rather than being left to the discretion of ministers.

The bill also takes the next step and codifies a short list of disqualifying purposes.  These are:  illegal activities;  advocating a political party or cause;  supporting a candidate for political office;  and attempting to change the law or government policy.

The first three disqualifying purposes, which so far have received little attention, will threaten the charity status of several organisations.

For example Greenpeace, which regularly engages in trespass and other breaches of the law, would have its charity status threatened by a requirement to not break the law.  The Wilderness Society and many other environmental groups regularly run marginal-seat campaigns during elections and their charity status would be threatened by a rule against such action.

Indeed, green groups and the green parties are increasingly acting as political tag teams.  This behaviour is a matter for them, but it should not be funded by government.  The law excludes political parties from becoming charities.  It is vital that it also prevents charities from becoming de facto political parties.

The most controversial issue in the draft legislation is the clause restricting lobbying, that is, attempting to change the law or government policy.  The reaction from the sector on this clause was disingenuous.  The draft does not rule out lobbying.  What it does is exclude organisations from accessing charity status whose "dominant purpose" is lobbying.  Charities such as Anglicare, St Vincent de Paul and the Red Cross that are primarily involved in service delivery will not be affected and will be able to lobby governments on behalf of their clients.

The clause is consistent with US and Canadian charity laws, and both those countries boast far more vibrant charitable sectors than Australia.  In the US, charities that have the most common legal status are able to spend up to 5 per cent of their revenue on lobbying.  The Internal Revenue Service audits them each year and requires that their lobbying activities be fully disclosed and itemised.

The Australian draft legislation poses a challenge for some environmental groups.  They often do not provide any services other than lobbying.  These groups would be forced to change, and, I think, for the better.  For example, instead of just chaining themselves to trees, the Wilderness Society might be forced to get their hands dirty and plant trees or hire scientists rather than political activists.

Charity status comes at great cost to taxpayers and with huge benefits to organisations.  Charity status, in effect, gives an exemption from all Commonwealth, state and local taxes.  The taxpayers' subsidy to charities stands at $1.4 billion a year and is growing rapidly.  The primary beneficiaries are the employees of the charities, who are exempt from fringe benefits tax.

Any responsible government must restrict access to this privileged status.  It must also guard against the privilege being exploited, and ensure "charity" status does not give its holders improper political standing.  Importantly, government must also ensure that the personal benefits that come with the status do not pervert the sector.

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