There is a new charities register where anyone can look up details of an organisation. Check out the Australian Charities and Not-for-profits Commission (ACNC) register here. There are some good and bad things which come from this register. The real pity about it is, the bad can quickly outweigh the value of the good if organisations are not careful.
The ACNC register is all about regulating the sector. There are requirements which are coming in that will force charities to register certain details. It depends on the turnover of the charity as to what level of information needs to be provided. In a nutshell though the register is to a small degree about encouraging basic governance structures and mostly about financial transparency.
The buzz word for charities in the last couple of years has been ‘transparency’. It stems from the public’s right to know how their donations are being used. There have been several media investigations into various charities questioning how organisations spend their money. There has even been criticism of those organisations who are using a third party to help them fundraise.
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The good news is, ultimately now you will be able to go to one place and read the financial details of an organisation. You will be able to see how they are spending their money. It is going to take a while for it to be fully populated. Once it is, you will be able to compare one to another before you decide where to give your money.
There is a lot of other basic additional information which will be in the system as well so you can make sure a charity is who it says it is.
That all seems good – everyone knows what everyone is up to…
The problem is this push for ‘transparency’ is being led by the word ‘financial’. It’s an old saying, but it is true, ‘numbers can lie’. If you don’t believe me, ask yourself this question – do you want / expect every dollar you donate to a charity to be put towards service provision or research? Culturally we have been led to believe this is what we should expect. So when you read that is not the case, do you immediately jump to the conclusion that something is going on which is not right? A simple explanation could change this….but where is it?
Many charities turn over millions of dollars a year. Those charities produce glossy (and or online versions) annual reports. You can sift through these to understand more about how they work. The problem is these are not searchable or therefore easily comparable. The even greater problem here is that many charities either don’t have the money, resources or general knowledge to produce an annual report.
While organisations like PWC are to be applauded for the lead role they have taken in pushing for greater transparency in reporting by charities, nobody is doing anything to help charities publish their message. Indeed many of the charities who produce an annual report get their messages wrong anyway.
Let me make it simple, communication is critical. A tool must be provided on the register which is free for charities to use so they can enter explanations alongside key data. This needs to be searchable, so when you compare charities you understand how they operate. The numbers are for the accountants, the explanations are for all of us.
Let’s go back to my example about how donations are used. If you want transparency you need clear communications to accompany the numbers. Compare the idea of seeing only 75% of your donations were going into services / research with no explanation as to why the rest disappeared. While imagine on the other hand if you were told that; for every $100 received, $10 went towards administering / overseeing services, $5 went towards making the community aware of the work done so as to encourage more donations, $10 went into investments to ensure long term sustainability, while the remaining $75 went straight into providing a service / researching a cure.
I would love to build the system which allowed this to happen. I know how to make it work, but sadly it is not on the agenda for the ACNC, the Government or various other organisations.
We are doing our part by offering a service to aid with clear communications, be it in an annual report or anywhere and everywhere else. I am proud of the communications work we have done with many charities, but there are so many more out there who we would like to assist.