A win for all

FIA has been lobbying for fundraising harmonisation for several years. What is happening at the moment? Well, there is actually good news! In February, we learned the current government is now moving on harmonising the charitable fundraising regulatory environment. As part of this, the Commonwealth, state and territory treasurers have agreed to a set of nationally consistent fundraising principles on charitable fundraising conduct that were developed by a working group of state and territory representatives.

The proposed principles align with the FIA Code on topics such as privacy, transparency, complying with donor pref-erences, handling complaints and dealing with vulnerable donor exploitation, among others. The FIA Code contains mechanisms that offer immense value to fundraisers, including a suite of Practice Notes on different aspects of fundraising, monitoring the compliance of fundraising practices with the FIA Code through mystery shopping and a process for handling complaints. These mechanisms minimise the impact of the nationally consistent fundraising principles on those fundraisers and organisations that are already FIA members and Code compliant.

We are now waiting to see how the various state and territory governments will implement these principles and the scope they will take in doing this. Ultimately, we are pleased that this harmonisation process will reduce red tape to make fundraising more efficient and cost-effective.

In May, FIA sent a comprehensive submission to the Productivity Commission with recommendations for the charitable fundraising sector and professional fundraising. What does FIA want? We have recommended the need to look beyond registration and reporting obligations in the harmonisation process in reducing red tape. Aspects of charitable fundraising such as conducting fundraising auctions and involving younger people as fundraisers are guided by different requirements and obligations across the states. The conduct of raffles is another area because its regulation usually sits under the gaming and gambling legislations in the different states, with varied requirements and thresholds for fundraisers in each state. There are also some barriers that could hamper the government’s aim of doubling giving by 2030.

FIA has asked the government to consider increasing tax deductions for donors as a way to further address the decline in philanthropic giving in Australia. Some countries have more favourable tax structures for donors that make charitable giving more appealing for their donors, and we want government to consider similar schemes here.

Our goal is for the federal government to strengthen the capacity of charities, especially around digital transforma-tion. Smaller charities often struggle to get the resources to implement technology because they have limited funds and competing priorities. FIA is also requesting the government consider offering tax concessions to charity sector employees to address the skills shortage in fundraising and to make fundraising more attractive as a career.

Also important to us is deductible gift recipient (DGR) reform to achieve greater productivity. We want the government to extend DGR status to more charities and make the Australian Charities and Not-for-profits Commission (ACNC) the DGR authority to streamline the process. Having been in operation for several years as the Commonwealth’s regulatory body for charities, the ACNC is well established to fulfil this responsibility and can be further equipped if need be.

Finally, we have made suggestions to boost gifts-in-wills in Australia, such as having a national will register and making it possible to leave a gift through superan-nuation by removing the tax penalty and allowing people to include a charity as a beneficiary.

In September 2022, Mastercard wanted to classify regular donations made via its credit card as ‘subscriptions’. This plan would have required charities to notify donors monthly of their option to cancel their donation. How did FIA respond? Mastercard wanted to create a new policy to minimise credit card fraud and consumer disputes over subscription fees, which is understandable. Unfortunately, the proposed changes lumped charities in with retail outlets, streaming services, gym memberships, magazines and other subscription services. We believe the donor-charity relationship differs from that of a consumer to a merchant or streaming service. Donors are voluntarily giving, not receiving a subscription, goods or services in exchange for using their credit card.

When this issue emerged, FIA joined with other representative bodies such as the Public Fundraising Regulatory Association, the Australian Council for International Development, the Community Council for Australia and similar international bodies to lobby Mastercard to exempt charities from these opt-out notifications. We viewed this proposal to inform donors of opt-outs after every transaction as unnecessary. There were concerns it would place a
considerable financial burden on our members to implement the proposed standards. We conducted research with the collective membership and the broader fundraising sector who agreed that the costs would be massive and might divert charity resources away from helping beneficiaries to meeting administrative and regulatory requirements.

In Australia, donors are already protected by an extensive regulatory framework, which makes Mastercard’s proposal unnecessary. Our collective briefing paper to the Treasury Department requested that Mastercard be required to provide data that supports their decision to include charities in this policy and that the company conduct a full regula-tory impact assessment of this change, including transition costs and ongoing expenses to charities. We ultimately met with Mastercard officials who agreed that the proposed changes would be burden-some to charities and that their proposed standards will now be treated as ‘recommended best practice’ and not obligatory. This decision is a win for FIA, our partners and members.

There are plans to phase out cheques as a payment system. FIA lobbied the Australian Banking Association, the banks and financial institutions not to scrap cheques so quickly because older people still like to use them for donations. Where are we at now? Several banks wanted to scrap the use of cheques in 2023, and we have been pushing for more time to allow
our members and donors time to adjust to this change and transition to online payment methods.

In a recent survey we conducted with our members on the impact of cheques, we found that a good number of charities still rely heavily on them as a method of receiving donations. About 12% of respondents indicated that they receive over 50% of their annual donations via cheques, while 17% said they receive between 30–50% of annual donations this way. Some charities even receive as much as 80% of their annual donations through cheques. For some charitable organisa-tions, the end of cheques means they will need to invest in new online payment systems. Such technologies come at a cost and would be a burden for smaller charity members.

While people can use online payment platforms or direct debit for donations, not all donors are comfortable with these payment methods. Our survey also confirmed that the demographic that still use cheques to make donations are mostly older people, either due to the absence of digital literacy or their lack of trust in online payment methods.

Meetings took place with the Commonwealth Treasury about the member survey results and our concerns about the impending withdrawal of cheques so they could liaise with the banking sector on ways to ease the transition for charities. The government then announced in June that cheques will be phased out by 2030. They intend that the seven-year transition plan will provide time to implement a coordinated approach to transitioning away from the use of cheques.

We believe charities now need to be proactive in transitioning their donors to other payment methods. Moving forward, FIA will help members with their plans and will continue to engage with Treasury on this transition.

here was an issue around lotteries in Western Australia recently. What happened? In 2022, the Gaming and Wagering Commission of Western Australia (GWC) began reviewing its policy around fees charged by professional fundraisers to organise lotteries for their charity clients. The GWC wanted to set a cap of 20% on what charities could spend in facilitating the conduct of a lottery.

Lotteries are a vital fundraising strategy for many members. In a submission and letter we sent to the GWC, we explained this change does not reflect best practice and that it would significantly hamper the conduct of lotteries in WA as a fundraising strategy. Most charities do not have the capacity to conduct lotteries inde-pendently. They need external providers to do this work, and these suppliers have to be paid fairly for their services. We were worried that this proposed cap would result in job losses in the fundraising supplier sector, fewer lotteries and less money for many charitable causes.

We believe charities and suppliers should agree on costs together. These decisions should reflect market conditions and value for services. In July, we were pleased to learn that GWC will not be proceeding with this initial proposal.

The Attorney-General’s Department published the Privacy Act Review Report earlier this year. FIA is concerned about some of the proposals. Can you elaborate? FIA and the Public Fundraising Regulatory Association put forward a joint submission in May objecting to several proposals in the Review. We are particularly concerned about the proposal to remove the small business exemption, which has also been a major concession for small charities. By implementing thisproposal, all charities will be subject to the Act, regardless of their size.

We believe the small business exemption should still extend to charities because of the compliance costs. There is no evidence public interest will be served by forcing small charities to comply. It is likely charitable organisations will have to direct resources away from their benefi-ciaries to meet these obligations.

In reality, our members already comply with the Privacy Act principles around donor privacy and data because this is a requirement of the FIA Code. However, if a concession is not made for charities that rely on the small business exemption, we have respectfully requested the proposed package of assistance for small businesses to comply with the Act be extended to small charities. We’re happy to discuss with the Attorney-General’s Department how they could support our smaller charity members in a meaningful way.

We are also concerned about the proposal to introduce additional require-ments so that an individual’s consent must be obtained to trade their personal information. Increasingly, charitable fundraising relies on the trading of data to be effective and impactful. It is essential to the success of most charities for two reasons: soliciting donations; and engaging with donors and the broader community regarding their impact. Trading of data already occurs in a regulated environment that requires charities to obtain consent for personal information, not exploit it, and to protect people’s privacy. Charities already competently adhere to the current privacy frame-work, and we think the requirement is unnecessary.

Closer to home, one of your tasks is to write Practice Notes for the FIA Code, which serve as supplementary guidance across various areas of fundraising. Are you working on any new Practice Notes? Fundraising is continually evolving and we must keep updating the Code and Practice Notes to reflect changes or emerging issues. At the moment, we are looking to introduce two new Practice.

Notes: one on matched-giving programs; and the other on fundraising and the use of artificial intelligence (AI).

Some ethical issues have emerged around matched-giving programs. For example, once gifts have been matched in a campaign, do you decline further dona-tions? Or does a matching gift campaign have new money being offered by a major donor that the charity won’t get unless they raise the funding with a matching campaign? Our guidance to members is that they need to be transparent in how they run their matched-giving programs and how they work so donors can make informed choices about participating.

With AI, more charities are using it, especially to create automated two-way conversations with supporters through online chat or SMS. The positives are that it can handle routine enquiries from supporters and it frees up fundraisers so they can focus on other work. But there are some issues with the technology. Donors may not realise they are not dealing with a real person and care has to be taken not to misrepresent the nature of these communications. As a result, there is a need for some guidance in this area.

The FIA Code course celebrated its fifth anniversary this year. What is new here? We have had nearly 8000 registrations and completions of the FIA Code course since we started offering it in 2018. It is fantastic that members are ensuring their teams complete the course.

Earlier this year, we updated the course content to make it more engaging and reflect changes in practice. We also have a new learning management platform for delivery which is very user-friendly. We are also reminding members to revisit the Code course bi-annually to refresh their understanding, see what is new and test themselves so they can be sure they clearly and deeply understand the material.

What updates do you have on FIA’s mystery shopping program? Our mystery shopping program, which we use to monitor compliance with the FIA Code, has grown in leaps and bounds not only in its relevance to our members and raising fundraising conduct across the sector, but also in terms of our reach and the number of organisations we mystery shop.

We check for Code compliance by mystery shopping fundraising activities of members on an ongoing basis. Since 2019, we have mystery shopped 700 member organisations and have had over 12,000 interactions. We see that the majority of FIA members are compliant and we provide them with feedback on areas for enhanced compliance. The feedback from our mystery shopping helps to continue improving fundraising conduct in line with the ethical best practices set out in the FIA Code. These results also inform the introduction of new FIA courses for fund-raisers and the review of existing ones.

If fundraisers want to know more about regulatory and policy matters, where can they obtain information? I write a quarterly newsletter exclusive to FIA members that focuses on our regulatory and policy advocacy and FIA Code compliance matters. Members can email me at jande@fia.org.au to be added to the subscriber list.