As the peak body for philanthropy we actively undertake policy advocacy to support more and better giving in Australia and represent our members on important sector issues. We work closely with Federal and State Governments to develop their understanding of the philanthropic sector, and to promote the development of effective policy frameworks to grow and support giving.
Here are monthly advocacy updates from our team to educate and inform our members and the broader community with resources and further information.
Over the weekend the ACNC released its report into the charity response to the catastrophic 2019-20 summer bushfires. The report looks at the responses of three of the charities who received the most attention and donations over the summer: Red Cross, the NSW RFS Trust, and WIRES.
These three charities collectively raised over $400 million in donations over December and January, far exceeding their regular income. In the case of one of these charities, the RFS, its trust deed prevented it from using funds beyond a narrow mandate, limited to the costs of fire-fighting equipment, training and administrative expenses of rural fire brigades. Despite this, fundraising campaigns initiated by third parties unconnected to the RFS misrepresented what the funds could and would be used for, resulting in donors expecting their money to be used in a way that was legally impossible.
The ACNC’s report concludes that despite the overwhelming demand on these charities and the unprecedented funds received, these three charities all responded quickly, strategically, and responsibly to the situation. All three have distributed donations effectively, especially considering the legal restrictions on them and the scope of the work – some have taken proactive steps to increase their administrative capacity in light of their new financial and operational position. The ACNC also found that all three had adequate internal fraud prevention measures to ensure the money is allocated appropriately and protected from fraud.
To read the full report, head to the ACNC’s webpage here.
The ACNC have released a statement in response to the Government’s announcement of additional funding in the Federal Budget. The funding will allow the Commission to conduct risk reviews of charities, and Acting Commissioner Anna Longley has stated that “in the future we may decide to produce educational resources for the sector to improve governance more broadly.”
Last week the Federal Government announced their October Budget, with record spending announced in a move to support Australia through the COVID-19 recession. The Budget also contains several items specific to the charities and not-for-profit sector, although unfortunately the policy priorities pushed for by Philanthropy Australia are yet to be adopted.
The two main items relevant to charities are firstly, additional funding for the ACNC compliance review program, which focuses on early intervention for charities at risk of failing. The ACNC is becoming more proactive in terms of reviewing compliance of charities with registration requirements, so it’s important that Members ensure that their organisations are fulfilling these requirements. The ACNC has a self-evaluation tool which can assist in this regard.
Secondly, additional DGR specific listings have been granted to a range of organisations, including the Judith Neilson Institute for Journalism and Ideas.
The ATO has advised that the new Deductable Gift Recipient category for community sheds has received Royal Assent as of last Thursday, meaning that community sheds who wish to obtain DGR status can apply as of 1 October 2020.
To be DGR endorsed, community sheds must be registered with the ACNC as a charity. The ACNC has streamlined the application process for community sheds.
The ATO and ACNC are hosting free webinars for community sheds:
For more information on eligibility and how to apply for DGR endorsement, visit the ATO webpage here.
This week the federal government announced measures intended to reduce fundraising red tape for charities, with the release of a discussion paper on a proposed cross-border recognition model. The proposed model would allow a charity registered with the ACNC to be automatically deemed as holding an authority in all participating Australian states and territories.
Philanthropy Australia welcomes the government’s adoption of some of our policy recommendations to #FixFundraising. While the proposed model is a promising first step, we hope to see more tangible measures introduced in the future to remove burdensome reporting requirements for charities. We need a cohesive road map from government on how current conduct and reporting requirements will be harmonised and modernised.
Our friends at Justice Connect are leading the way on pushing for fundraising harmonisation and have a detailed page on their website with resources on the proposed changes and guides to what you can do to support the campaign to #FixFundraising.
Philanthropy Australia will be drafting a submission and welcomes feedback from our members. If you have any questions or input, please email our Director of Policy and Research Sarah Wickham directly at email@example.com.
The Standing Committee on Communications and the Arts is currently accepting submissions as part of its latest inquiry into the cultural and economic significance of the arts in Australia, as well as the impact of COVID-19 on creative industries.
Arts bodies and organisations are encouraged to make a submission, either through the official webpage or by emailing firstname.lastname@example.org by 22 October 2020. Alternatively, interested parties can share their thoughts by participating in an online survey.
On Wednesday the Assistant Minister for Charities, Senator Zed Seselja, made two announcements to incentivise giving to support charities in response to COVID-19:
New amendments to ancillary funds guidelines
The amendments to the ministerial guidelines for public and private ancillary funds are to provide a credit for funds that make total distributions in 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions. The credit – equal to half the percentage points by which the distributions exceed the minimum – may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until the credit is exhausted.
Treasury has confirmed that the intent of these amendments is the total distribution in the two years is four percentage points or greater than the minimum to be eligible for the credit in future years. For example:
Private Ancillary Fund
If a private ancillary fund distributes 7 percent in both years, the requirement is satisfied because the total distribution is four percentage points higher than the minimum
If it distributes 8.5 percent in one year and 5.5 percent in the other it would also meet the eligibility test and so on for the many other combinations, subject to the 5% minimum distribution being made in each year
Public Ancillary Fund
If a public ancillary fund distributes 8 percent in both years, the requirement is satisfied because the total distribution is four percentage points higher than the minimum
If it distributes 7.5 percent in one year and 4.5 percent in the other it would also meet the eligibility test and so on for the many other combinations, subject to the 4% minimum distribution being made in each year
The federal government also confirmed that if an ancillary fund has special circumstances affecting their ability to meet the minimum distribution requirements during this time, they may still apply to the ATO Commissioner to request a reduction.
Philanthropy Australia welcomes the announcement by the federal government which will encourage ancillary funds to increase their granting during this time of immense need. We are waiting to receive the written guidance regarding this announcement and will update members as we receive further information.
Government declares COVID-19 as a disaster – relief funds able to access 2-year DGR status
The Federal Government also declared COVID-19 a disaster for the purpose of establishing Australian disaster relief funds as DGRs, allowing these funds to receive tax-deductible donations.
Donations to Australian disaster relief funds, established to provide relief from the COVID-19 pandemic, will be tax deductive when made within two years from 18 March 2020 (when the Federal Government officially announced COVID-19 as a pandemic).
Disaster relief funds will need to apply for formal endorsement as a DGR fund with the ATO. This requires charity registration with the ACNC. Organisations seeking to establish a DGR Fund should contact the ATO’s Not-for-Profit advice line on 1300 130 248 or email email@example.com
Philanthropy Australia is still waiting to receive the written guidance regarding this announcement. We will update members once we have further information.
Philanthropy Australia appreciates the collaborative dialogue we’ve had with the Assistant Minister for Charities and the Australian Government over ways we can support the work of the not-for-profit sector during this challenging time. These announcements are part of a broad set of policy recommendations that Philanthropy Australia is advocating to government to strengthen the critical role philanthropy can play during this crisis.
For more information you can read the Assistant Minister’s media release here
For the initial information received regarding how your Ancillary Fund can take advantage of the recently announced amendments to give more during this critical time please read here
For more details on Philanthropy Australia’s COVID-19 policy priorities please read here
For information regarding how Australian Philanthropy leaders are stepping up and responding to community needs during this unparalleled challenge please read our public statement here
On Friday the Federal Government announced further amendments to the JobKeeper rules including:
These amendments provide charities with the option to include or exclude government revenue from this test, to ensure the eligibility of charities aren’t adversely affected where they are delivering significant services that are funded by government. It has also opened eligibility to international aid organisations listed on the Overseas Aid Gift Deductibility Scheme.
The detail for these changes are available here:
The Assistant Minister for Charities included the following information to the sector recently:
I draw your attention to the below section in the Explanatory Statement, that sets out the ability for charities receiving government revenue to elect to exclude employees fully funded by this revenue from the JobKeeper program.
Employees of charities paid under government grants
Subsection 10A(5), recognising the unique nature of charities, provides an exception to the ‘one-in all-in’ principle that applies to nominating employees as eligible employees under the JobKeeper Scheme. Under this exception, ACNC-registered charities that have elected to disregard certain government grants when calculating their decline in turnover that have employees whose salary and wages are fully funded by those government grants may choose not to ask these employees to nominate as eligible employees for the purposes of the JobKeeper scheme. This choice is available only where the employer reasonably believes that the full amount of the employee’s salary and wages is funded for the relevant fortnight by a grant that has been disregarded in calculating GST turnover as a result of subparagraph 8(8)(h)(i).
Whilst the exemption created under 10A(5) is voluntary, I would expect eligible charities to utilise this exemption to ensure that the JobKeeper is not paid to employees who are continuing to be fully funded by the taxpayer. I trust that charities will use this discretion to protect jobs while also ensuring taxpayer funds are used appropriately.
Yesterday the Federal Government passed the $130 billion JobKeeper Payment legislation.
This is the single largest piece of government spending in Australian history, with around 6 million Australians expected to receive $1,500 a fortnight.
On Monday evening the Treasurer confirmed that the eligibility threshold for the payment will be decreased to 15% for registered charities, one of the five COVID-19 recommendations we put to Government. Decreasing the threshold will result in significant support to thousands of charities and their staff, who are doing critical frontline work in supporting communities through COVID-19 and in some instances, working towards a vaccine. Read more about Philanthropy Australia welcoming the Government announcement, and acknowledging the critical advocacy from the social sector in our media release.
Philanthropy Australia looks forward to sharing the JobKeeper eligibility requirements as Treasury releases additional guidance in the coming days.
Below are key insights from the Minister, Shadow Minister and sector leaders:
2 April video message from Assistant Minister for Charities Zed Seselja
Pro Bono News (6 April): ‘We don’t run like normal businesses’: Charities still locked out of JobKeeper payments
Shadow Minister for Charities Andrew Leigh MP (8 April): an interview with Tony Jones and speech in the House of Representatives
On Tuesday this week, Philanthropy Australia met with the Assistant Minister for Charities, Senator Zed Seselja to discuss the role philanthropy is playing in tackling COVID-19, opportunities for closer collaboration between philanthropy and Government to support our charities and additional incentives the Government could consider to stimulate more giving during this time.
During this meeting Philanthropy Australia provided the following recommendations for the consideration of the Government:
Philanthropy Australia continues to work closely with key partners on the detailed specifics of the above recommendations. Once we receive confirmation if the Government is committed to any of these measures we will update our community
This week our Board approved a public statement on Australian Philanthropy’s Response to the COVID-19 Crisis, which will be released on Monday 6 April. We look forward to sharing this statement with our community and the public at the beginning of next week
The first meeting of the newly established Charities Crisis Cabinet met on Tuesday, led by Susan Pascoe and Tim Costello. This meeting focused on setting the framework for the group and information sharing, we look forward to sharing more details with our community over the coming weeks