Charities must work hard to restore the sacred trust

Published by The Sunday Telegraph on Sunday March 11, 2012

By Tim Costello, chief executive for World Vision Australia

The Federal Government’s new charities commission should play a key role in promoting transparency across the sector and to expose the unethical practices of the minority.

Charities operate on a ‘sacred trust’ from the Australian community. They rely on their good name and on delivering the promise that the funds they receive get to those who are in need.

Any breach of this trust by a charity or an allegation made against one charity – impacts all charities.

The special series by The Sunday Telegraph focusing on charities in Australia has made some alarming claims.  While I am not convinced the alleged practices are widespread in the sector in Australia, if such practices are happening anywhere they must be stamped out.

Donors must be sure their money gets to those in need, their privacy must be protected, they shouldn’t be pressured or bullied into giving, and their wishes should be respected. There is no place in the sector for pressuring or emotive tactics or targeting of vulnerable groups such as the elderly or dying.

The Australian Government has moved to establish the Australian Charities and Not-for-profit Commission (ACNC) and is now considering the extent of its powers and operations.

World Vision Australia welcomes the establishment of the commission and believes it should have the power to promote transparency across the sector. In Australia larger agencies are already heavily regulated and most are voluntarily transparent.

It is our hope that the ACNC will bring about a new level of governance and transparency and therefore expose the tiny minority of unethical fundraisers that can sully the sector’s reputation.

For its part, World Vision made a decision to not just have financial reports in line with the requirements of the Corporations Act but to provide disclosure of its finances, governance and performance to the standards and criteria of the PricewaterhouseCoopers Transparency Award.  World Vision’s suite of annual reports won the Award in 2009 and our reports have continued to live up to those standards since.

I have already publicly welcomed the establishment of an information portal by the ACNC which will make available to the public information such as the overheads of charitable organisations.

Donors are right to expect greater transparency. This is true now, more than ever, as charities in Australia experience a significant funding squeeze as the rising cost of living and ‘compassion fatigue’ starts to bite.

Yet it is also important that when we put charities under the microscope we judge them fairly, sensibly and objectively. There are dangers that the community can use the wrong standard by which to judge a charity. A provocative headline can often give a misleading impression that inappropriate conduct is widespread or that the industry is in crisis. In reality, misconduct is more often an aberration rather than the norm.

One of the aims for the ACNC is to promote a vibrant and transparent operation of the not-for-profit sector and this must be applauded. The Sunday Telegraph’s series has aimed to highlight shortcomings in the industry and these must be tackled where they exist.

Yet it is wrong to conclude that the industry is under regulated or even unregulated. Charities are subject to a raft of State and Territory regulations, consumer protection laws, treasury regulations and other codes.

Large overseas aid agencies, such as World Vision, are also subject to a regular and rigorous accreditation process under AusAID, the government’s aid agency.

In fact a key measure of the success of the new charities commission will be its ability to eliminate some of the duplication in reporting to and liaising with a host of different regulators.

If the government can get the operations and the powers of the new Charities Commission right there is a great benefit to the sector and the wider community.

With the global financial crisis biting globally and the cost of living and unemployment hitting hard here at home, the role of charities in helping people in need is now greater than ever.

World Vision works with the poorest and most vulnerable people in the world. In many of these countries the price of basic foods has risen by as much as 200% over the last few years. For poor families who normally spend the bulk of their meagre income on getting enough food to simply survive, the price shocks are proving too much.

Australians are very generous people, we understand that we live in The Lucky Country and many of us give what we can to help those beyond our shores who are devastated by disaster, poverty and disease.

It is, therefore, critical that charities not only do all they can to be transparent and act with the highest standards of integrity, but they are also being seen to do so. It is a sector that trades on a sacred trust with the community.

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