Fundraisers commit to higher standards ahead of tax and regulations revamp

Fundraising Institute Australia, which represents nearly 800 fundraising organisations, said 10,000 people had now signed up for training in how to comply with its code.

An estimated $14 billion is generated through fundraising each year in Australia, and FIA estimates its members raise about 80% of that figure.

The industry body is trying to lift fundraising standards, countering outlier fundraisers with questionable practices.

According to consumer advocacy organisation Choice, nearly all large charities outsource fundraising to marketing firms that work for commissions.

Some of those firms have run into strife. Last year, one such firm, fundraising telemarketer Pareto Phone, suffered a massive data breach in which nearly 50,000 donors had personal information leaked online. The federal privacy watchdog is continuing to investigate that incident, which prompted authorities to warn about the use of third-party fundraisers.

At the same time, a new Productivity Commission report into philanthropy has recommended increasing the number of charities that are able to claim deductible gift recipient (DGR) status by as many as 15,000. It’s part of the federal government’s goal of doubling philanthropy by 2030, which is expected to drive billions of dollars more in donations.

Adding to the difficulties for fundraisers, fundraising regulations are a patchwork of laws in each state and territory, although the federal government is attempting to introduce a universal fundraising framework for greater consistency.

The principles agreed to by Canberra and the states for harmonising regulations include provisions that fundraisers should:

• never exploit the trust, lack of knowledge, lack of capacity, apparent need for care and support, or vulnerable circumstances of any donor
• always make it clear whether a donation is a one-off or an ongoing donation, and clearly explain how to end an ongoing donation
• conduct all reasonable due diligence when engaging third parties to assist, support or deliver fundraising activities
• ensure information covered by the Privacy Act 1998 (the Act) is collected, used and managed in accordance with the Australian Privacy Principles where required under the Act.

Charities Minister Andrew Leigh – speaking at an FIA event earlier this year – drew attention to those principles as he put rogue charities on notice for pushy marketing that targeted the vulnerable and flagged introducing changes to the Privacy Act to tighten donor consent and “opt-out” provisions.

FIA CEO Katherine Raskob conceded that it was a challenge to maintain high standards amid an environment of rising demand for charity services, diminishing donations, resource constraints, donor fatigue and greater competition for funds.

But fundraisers did not want governments stepping in to further regulate their behaviour, she said, arguing that government standards should not be imposed on fundraisers.

“FIA have worked over many years to enlist charitable fundraising organisations to apply and adhere to the code to avoid government regulation which, at the end of the day, puts additional onerous red tape obligations on charities that are just trying to do good. By and large, the charitable sector does the right thing and doesn’t need more red tape.”

She said existing authorities already policed unethical behaviour, including through Australian consumer law and via the Australian Competition and Consumer Commission (ACCC).

She stressed that take up of the FIA code showed fundraising professionals’ dedication to upholding “the highest ethical standards in their work”.

“By investing in professional development and committing to best-practice fundraising, code-compliant fundraisers play a pivotal role in building trust and confidence in charitable fundraising," Ms Raskob said.

All members must commit to the code and complete training in its application, with principles and guidelines covering donor stewardship, regulatory compliance, integrity and accountability.

She said that FIA “represents around 80% of the total fundraised revenue from charities”, but that while a handful of non-members underook training, none were part of its compliance program.

Asked about how FIA policed breaches of the code, Ms Raskob stressed that the code’s aim was not primarily to catch members out and revoke memberships, but to encourage adherence.

If breaches were identified the organisation would first seek clarification, request reasons for conduct inconsistent with the code, ask for or specify actions to rectify a breach, and issue cautions. Repeated breaches or failure to address actions could lead FIA to “consider suspending or revoking membership”, she said.

To tackle cowboy fundraisers who ignored the code, Ms Raskob said FIA urged members to “ask or demand their suppliers be code compliant”.

“At the end of the day people support causes they trust. A charity’s reputation is crucial, so knowing an organisation has committed to operate ethically and transparently and according to the FIA Code gives people comfort that their generous donations are being handled professionally and with integrity.”

Those who have signed up to the code include Four Paws’ national director Rebecca Linigen.

Ms Linigen said Four Paws Australia was part of a global animal welfare charity helping stop suffering worldwide.

Its work spans helping animals in conflict zones, advocating against cruel treatment of farm animals, and raising issues about animal sanctuaries, puppy farming, the cat and dog meat trade, and the treatment of strays.

She said Four Paws was a signatory to the code “because ethical fundraising practices and maintaining a good relationship with our donors is fundamental to the sustainability of our organisation and ensure we can continue our vital work for animals.”

She said this was even more critical for an organisation in which donors were not able to claim tax deductions for donations under the current deductible gift recipient (DGR) scheme.

All of Four Paws’ fundraisers – including third-party agencies – were required to use the code, which was “an important part of our onboarding process for fundraisers”.

“We don’t ever want the code to become a ‘tick box’,” she said.

Ms Linigen said as a director she signed a declaration every year to uphold the code, but she also hoped to lead by example.

She said the organisation didn’t rely on contracts and conducted an “ongoing conversation” with suppliers “to make sure we’re not handing off our responsibilities”.

She described the code as “a privilege and a responsibility”, and said that when cowboys ignored the code, it “impacts all of us”.

She said unethical fundraising practices were short sighted.

“If the public lose trust in us, it’s our beneficiaries that are the ones who will ultimately suffer. We’re asking donors every day to trust us to improve animal welfare on their behalf and that trust extends to how we treat their donations and data, and how we communicate with them.”

She said when an organisation’s fundraisers and managers were well informed about the code, it was possible to embed the code’s practices in an organisation.

“It just becomes standard in your day-to-day work,” she said.

More information

Fundraising Institute Australia Code

ACNC: Charity fundraising and the public

ACCC on unfair business practices

Minister puts rogue fundraisers on notice