So what the heck does the budget really mean for the Not for Profit (NFP) sector? Well, in short it’s all about reform.
The big exciting news is that we’ll finally get a charities commission here in Australia. The Australian Charities and Not-for-Profit Commission (ACNC) will be launched on 1 July 2012 and will receive a $53.6 million injection from the Government over the next four years. Finally there will be a one-stop-shop for charities, responsible for determining the eligibility of organisations seeking charitable status as well as the implementation of the much sought after ‘report-once use-often’ reporting framework for NFPs. The arrival of the Commission will hopefully lead to the implementation of some of the recommendations of the 2010 Productivity Commission Report into the NFP sector. A Government Taskforce will be established in July 2011 to take responsibility for getting the ACNC ready to launch into operations by July 2012. While the makeup of the Taskforce is currently unclear, there will be a broader public consultation process with the NFP sector and relevant government agencies.
While the launch of the Commission is positive, there have been some mixed feelings around the announced budget crackdown on tax exemptions for businesses run by Not for Profit organisations. The media has focused on the implications of the closing of this loophole for organisations like Hillsong Church which operates the Gloria Jean’s Coffee Shop franchise or the Seventh Day Adventist Church which operates cereal company, Sanitarium. The basic gist of it is that any revenue generated by NFPs from commercial activities that are not directed back to their altruistic purpose will be subject to income tax. Seem’s fair enough? Well, maybe but here’s a great international comparison from Bronwen Dalton arguing that the only winners in this closing of the loophole are the lawyers and accountants.
The final big piece of news from the Budget for the Not for Profit sector is the government announcement that it will introduce a statutory definition of ‘charity’ by July 2013. Basically, someone has decided that a 400 year old definition of charity is simply not good enough. While the broad nature of the current definition has caused problems the review seems to be a reaction to Aid/Watch decision from the High Court late last year. The Government has committed to providing $2.9 million over four years to the ACNC (tough first up job) to assist with the reassessment of the charitable status of entities on the basis of the new statutory definition.
For more information check out the the media release from The Hon Bill Shorten
It’s easy to think big when you think philanthropy. Gates, Buffet and all their ‘pledge’ friends have put a lot of zeros on the cheques they’ve written and kudos to them. Here in Australia the movement to encourage the mega wealthy to put their hands deeper into their pockets is also gathering some steam. But philanthropy isn’t about the size of the numbers or the zeros that fall behind them. In the last couple of weeks I have been reminded on a couple of occasions that true philanthropy is best demonstrated by simple, small and thoughtful acts of generosity. Like most acts of generosity in this day and age they are rarely reported upon and infrequently celebrated. I thought I’d use this occasion to highlight one simple act.
Recently I was in a taxi heading to a meeting. I wasn’t travelling far, but was running late and decided to foot the fare rather than risk a further delay at the tram stop. I jumped in a taxi and began chatting with the driver and the usual chit chat ensued. The taxi driver, whose name I have very unfortunately forgotten, asked me what I did for work. As the trip was short, I gave the short answer – I work in philanthropy. The short answer didn’t satisfy the driver, he pressed and prodded. What exactly is philanthropy? Why does someone set up a Foundation? Who decides who gets the grants? What should you look for in an organisation that you’d like to give money to? There aren’t short answers for any of those questions but we chatted away regardless. When I arrived at my destination the cab fare was $8 but my driver refused to accept any money, instead he asked me to give it away for him. I’ve still got the $8 and I haven’t decided where or who to give it away to, giving away money is a tough gig after all.
We can often fall into the trap of believing that philanthropy is for the rich. While we are living in an age where the mega rich in this country are under increasing scrutiny for their paucity of giving it’s easy to forget that there is an army of people giving simply. Many people, some of limited means, give thoughtfully and without the benefit of, or concern for, tax deductions.
Anyone who has been reading the comments sections connected to recent articles on philanthropy in Australia recently will recognise that there’s a tangible level of public distrust around philanthropy in this country. By celebrating the small stuff, perhaps we can change the public perceptions of what philanthropy is and why it’s important.
Now is the time to be celebrating the big and small stuff in philanthropy. The latest 2008/2009 Australian Taxation Office stats show that tax deductible giving in Australia has fallen and fallen for the first time in a decade (check out the Philanthropy Australia blog here). There could be a lot of reasons for the decline (GFC, giving exhaustion, lazy filling out of tax returns) but the important thing is that we work towards re-building and further growing the culture of giving in this country.
We’d love to hear about the simple acts of philanthropy you know about.
You can follow Caitriona Fay via @cat_fay on Twitter