Australia has 59,000 entities listed on the ACNC Charity Register and 30,000 of them have deductible gift status. Most are devoted to their causes and services provision without political intent. However, some charities have recently attracted the attention of the federal government for overstepping the bounds of good taste by taking punitive economic action against private enterprises. While this is regrettable in depriving hard working Australians of income, they argue that a right to free speech and action justifies their charity actions.
So, the federal government has now proposed and made other changes to Australian Charities and Not-for-profits Commission Regulation 2013 (the ACNC Regulation) that will require the ACNC Commissioner to publish and maintain information on the Charity Register about where to find details of electoral expenditure and political donations of registered charities.
From 30 July 2021 the ACNC will provide links on the Charity Register listing of affected registered charities to the AEC’s Transparency Register that discloses details of political donations and electoral expenditure.
However, one unintended consequence may catch out senior federal, state and territory public servants and their departments or agencies. Many of the 187 federal government entities have workplace giving pages on their internal human resources internet webpages about how an employee can benefit from the employer endorsed workplace giving program. Most government websites have links to numerous charity options, however some of these may provoke adverse reactions from conservative commentators, politicians, or ministers.
Over 200,000 separate workplace matched donations were made recently worth over $50 million while around $3.5 billion is claimed each year by Australian taxpayers.
Workplace giving is a simple and effective way for departmental staff to regularly donate to charitable organisations through automated payroll deductions. The department allows employees the opportunity to make regular donations through their pay. Departmental Workplace giving is a voluntary programme that (under a pre-tax system) results in an automatic tax deduction for employees, without the need for them to keep and claim receipts.
The implication may be that a department has endorsed some of these charities by allowing the tax incentives and highlighting their benefits to the employee without realising they may be breaking the new Governance standards.
Assistant Treasurer Michael Sukkar said ‘Australian’s support charities through donations and tax concessions with the expectation that a charity’s resources are directed towards charitable works. By making these regulations, the Government is ensuring charities that misuse and take advantage of their status to take part in or actively promote illegal activity can be stripped of tax concessions and other benefits’. So, what then about the issue of workplace giving in federal departments? An immediate review should be conducted to seek clarification around the new rules.
The Minister also states that, ‘Charities that engage in unlawful activities infringe on the rights of law-abiding Australians conducting their business and going about their everyday lives. This undermines public trust and confidence in the charities sector.’
Charities will also be required to maintain reasonable internal controls over their resources, such as their funds, social media accounts and employees, to ensure they do not use them to actively promote others to commit offences.
Governance standard three requires charities to comply with Australian laws. Acting lawfully protects a charity’s assets, reputation, and the people it works with. Compliance with Australian laws sets a minimum benchmark by which all charities should govern themselves.
What might be embarrassing for the government is if taxpayer funds are explicitly identified as being from one of the charities that have an adverse Governance finding made. The question is just how many federal government websites offer workplace giving to charities that could be caught up in any proposed changes?