Too much of a good thing? Let’s talk about it

Wednesday, November 11, 2015

Do we have too many charities, attempting to do too much of the same thing? Are Australian charities creating unnecessary duplication as we compete for public donations and a shrinking pool of government grants?

Anyone working in Australia’s not-for-profit sector would know that there is a degree of charity-fatigue out there in donor-land. The term ‘chugger’ a contraction of ‘charity mugger’ has entered our vocabulary as people complain of being ‘mugged’ in the streets or cold-called by charity fundraisers.

There is no doubt that in today’s market there is hot competition for the charity dollar and more often than not from charities with like promises. This is something the not-for-profit sector must tackle head-on; what’s at stake is both the public’s trust in the sector as well as our actual effectiveness in bringing about the changes in people’s lives that we promise to deliver.

Donors of all kinds – whether they be individuals, businesses, governments, and philanthropic bodies – do trust Australia’s charitable organisations to address issues they are concerned about. We all share an interest in charities achieving the best outcomes in the best way, whether that’s for blind kids, or reducing family violence, or easing the hunger and suffering of the world’s poor.

But ever since the Global Financial Crisis, and sustained negative politics around the state of our nation’s finances, Australians giving to charities has been shrinking. At the same time the amount of grant funding on offer from governments is also falling; hence the need for a stocktake.

Our nation’s peak body representing the not-for-profit sector, the Communities Council for Australia which I chair, is calling for a clear-headed re-think of our sector, by the sector, including the possibility of mergers, where there is wasteful duplication by charitable organisations.

As should be the case with all good reform processes, everything needs to be on the table and the discussion needs to be frank. This is not about developing a hit-list. It’s not about being anti-administration, or about cost-cutting as an end in itself. Effectively-run charities need to make adequate provision for evaluation of their programs, and to ensure transparency and good governance.

Rather, this is about saying that if a charity’s purpose can be fulfilled with greater effectiveness by merging with another then let’s talk about it. Be honest about the level of duplication, and toss around sensible, clear-eyed measures to enable organisations to work better for the communities we serve.

There are some 60,000 registered charities in Australia, and around ten times that number of not-for-profit organisations.

Would there be value in sharing back offices, for example? For those charities with a federated structure, with a head office and multiple state-based administrations, would it make more sense to move to a single governing structure, as the Red Cross have done, which could deliver greater impact for less?

What is certain is that greater collaboration and less competition would be helpful. I strongly believe that Australia’s not-for-profit sector can deliver more community benefit at less cost if we collaborate more closely.

In my experience, greater collaboration can produce better results on the ground – for example if one organisation brings technical expertise and another has deep reach within communities, while yet another is able to assist with marketing and community awareness.

This is not a simplistic argument not about big organisations taking over small ones – we need a dynamic sector where new entrants can make a splash by doing innovative things. But I wonder how sustainable it is for new entrants to keep springing up who are merely duplicating efforts. In the UK for example, before you can start a charity you’ve got to show that it doesn’t replicate an existing body – you have to prove that the need is there and currently not being met by existing organisations.

Lots of people start a charity with great passion only to find three or four years later the hard yards of running an organisation is sucking their passion dry. So why not seize upon that passion with greater conviction, and have the hard conversations about doing things more effectively to achieve common good.

The charitable sector can either be a victim of a shrinking market or we can take control of our own future and instead ask, how can we do this better?

I’m hopeful that as our nation enters a more confident phase, Australians will find it in their hearts to be more generous especially towards those they still trust to make a real difference; in the meantime there is plenty of work the sector can do to collaborate and work together for greater impact.

Tim Costello is chair of the Community Council for Australia and World Vision Australia chief executive

First published in the Herald Sun, 11 November 2015

Opinion Pieces, Asia and the Pacific, ACNC, Tim Costello

Back to all Results