Jim McGinty is cutting non-government organisations (NGOs) out of the health funding loop. What is that all about? After all, the NGOs are just trying to help.
It is about a government, duly elected by the people of West Australia, determining who shall help it deliver the best services at the lowest cost. Sometimes NGOs do the job well, sometimes they do not.
Similarly, my study of Commonwealth-NGO relations for the Prime Minister's Community-Business Partnership, and the Federal Treasurer's Bill defining charities are part of the same thinking. Governments need to test the credentials and effectiveness of those NGOs (which include charities) who want to use public funds to act on behalf of interest groups. This is not only a government right, but also a responsibility.
NGOs come in all types and sizes, always non-profit, sometimes charitable, sometimes glorified lobbyists, some international, some local, some want to save the world, some want to save themselves. They are vehicles for private initiative to pursue public purposes. Few matters of public policy pass without an NGO spokesperson voicing an opinion. They have, in some regards, become the official opposition. Their growth in recent times is an "associational revolution", and reflects an enthusiasm for citizens to participate more directly in public problem-solving.
NGOs are private associations and as such should be left alone, unless they use public money or have privileged access to politicians. Then the politicians should ensure that they and the public know who they are, whom they represent, why they receive government funds, why their view is preferred to another group, and, if they provide a service, how effective and efficient are they.
For example, right now charities are arguing the toss with the Commonwealth government about what they are required to do to obtain tax advantages -- valued in total at around $4 billion per year. At present, there is an assumption that a donor understands the purpose of the charity when making a donation. This may be true when the charity's methods are direct such as giving aid to the poor, planting trees, and writing letters to foreign governments on behalf of political prisoners.
As the methods and definition of charities have widened however, the assumption of donor knowledge does not hold. Few charities just provide direct aid to the poor. Most put a great deal of effort and resources into lobbying governments to do that work for them. For example, lobbying government to provide more generous welfare benefits, to provide shelter for women, to protect the environment and to teach people how to be good parents. Few charities however disclose to the public -- or governments for that matter -- the extent or nature of their lobbying or its effectiveness. The trend towards lobbying can undermine a charities link with the community and its self-help ethos.
The states have the responsibility for regulating the fund raising activities of charities. However, they do so poorly. Requirements vary immensely between states, enforcement is generally lax, and oversight low key. At the Federal level regulatory oversight is if anything weaker.
At present, the Australian Tax Office does not audit charities, despite the millions lost in tax revenue. Indeed, the ATO struggles to be able to determine whether an organisation is a charity or not. While some charities apply extremely high standards of disclosure, the norm for the sector as a whole is poor.
The key is not heavy-handed regulation, but disclosure. The motto should be informed giving. Charities should be required to publish how much money they spend in raising their funds, how much they spend on policy work, and how much they spend on administration. This would provide the information necessary for donors to decide whether or not to give. The donor market would be better informed, not just of "the cause" -- the pictures of felled trees, and hungry children -- but the efficiency with which the funds are gathered and applied to the purpose, and how much is spent on the conferences, education, propaganda and lobbying.
It would be good to be able to check the ATO website for an annual form lodged by these organisations that told the story not only of charity status, but how efficient they were, and whether they preferred to be policy people, or help out in the old way.
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