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Charity Fundraising in the 21st Century
07/11/2018
Current framework of fundraising regulation for charities and options for reform

AZIZE, Ms Maiy, Director of Media and Communications, Anglicare Australia

BALZER, Ms Marcia, Executive Director, Baptist Care Australia

CHAMBERS, Ms Kasy, Executive Director, Anglicare Australia

CHAIR: Welcome. The committee has received your written submissions. I invite you to make a brief opening statement and then the committee will move to questions. Maybe Ms Balzer could start?

Ms Balzer : Thank you very much for the opportunity to speak with you today. Baptist Care Australia is a peak body representing Baptist community service organisations around the country. Our members have a collective turnover of more than $700 million, employ more than 9,000 people and engage with several thousand volunteers each year.

Our perspective on the inquiry's terms of reference is set out in our submission. It strongly aligns with other submissions you've received supporting the recommendations of the #FixFundraising coalition led by Justice Connect. No doubt you've already heard many cases that illustrate how the current situation is unwieldy, inefficient and wasteful of the precious resources of charities. There is an extraordinary level of agreement that these resources would be better spent helping the people our organisations exist to serve, and we would certainly add our voice to those calling for regulatory reform.

As far as an opening statement is concerned, I just have two brief examples from our own experience and our recent experience within our Baptist Care Australia network, just to add to the case studies that you've already read and no doubt heard as well. In June 2017 Baptist Care Australia was endorsed as a tax deductible gift recipient. In designing our new website, towards the end of that year, we considered adding an online donation function to support any future fundraising campaigns that we might choose to establish. We don't currently fundraise at a national level. As a national organisation this would have required us to obtain a licence or authorisation in the seven relevant jurisdictions. We decided that the time and costs in doing that would be excessive for us, and that has put a hold on any plans, in the near term, for us to fundraise at a national level.

At the other end of the spectrum, our largest member organisation is large enough to fall into the top few per cent of charities in Australia. It doesn't actively seek donations in the other states apart from where it operates, but it does fundraise through its website. It recently undertook a national compliance review to make sure they were meeting their obligations across different jurisdictions, even though they weren't focusing on fundraising in those other jurisdictions. Even though they thought they were compliant, legal advice they sought demonstrated that there remained a few gaps they needed to fill to be fully compliant across the seven jurisdictional regimes.

That legal advice and the internal review process absorbed resources that might have been used more usefully for their charitable purposes. But, perhaps, more relevant to the inquiry is the fact that a very large charity, with access to considerable resources, found that there were still some gaps to be filled to be fully compliant with the complicated requirements in every jurisdiction. It's no surprise that much smaller organisations relying on volunteers find it extremely difficult or almost impossible to fully meet the current requirements for fundraising across those jurisdictions, and you've heard a lot about that already just today.

Our message from Baptist Care Australia is consistent with many of the other organisations you've heard from. Fundraising needs fixing—it's urgent—and, after multiple reviews and recommendations and many delays, there is a consistent view on what needs to be done. I'm happy to answer any questions after the other opening statement.

CHAIR: Who's going to speak, or are you both going to speak?

Ms Chambers : I'll make some opening remarks, thanks, Chair. Good morning. Thank you for the opportunity to appear before this committee. Over the years, you'd be aware, there have been many inquiries into the not-for-profit sector, tax deductible gift programs and charities more generally. Our sector has been under constant review for decades, in fact, and with each new review we learn more about the value of the charity sector and the donations that help support it. One thing that concerns us, though, is that in recent years we've seen several inquiries and reviews focusing on constraining charity advocacy and directing charities on how to spend donations, particularly those they've fundraised.

We hope that this select committee will focus on the positive role that charities play in public life and how that role can be supported and funded. As we say in our submission, the greatest asset for any charity seeking to fundraise is the trust that it enjoys within its community. That's why trust was a major focus for our submission. We want to build on the trust that we enjoy with the community and we want a regulatory regime that promotes that trust between our sector and the governments we work with. In turn, we believe, that builds trust in public democracy. In its review of the contribution to the not-for-profit sector, the Productivity Commission found that the community has a great deal of trust in the sector. They consistently show that Australian charities enjoy a much higher level of trust than governments and businesses, and we see strong and transparent regulation continuing as a key to maintaining that trust.

Since the ACNC was established, over 1,300 complaints have been lodged. Many have resulted in investigations and have been resolved by working with the charities themselves. Last year, 80 investigations were finalised and 26 charities had their registration revoked. We support this approach as critical to maintaining trust. But it's important to remember that this level of compliance is very high when compared to other service sectors. We believe that one of the greatest threats to public trust in charities comes not from the conduct of the sector itself but from the efforts to undermine charities and their role in public debate. In recent years, charities and community organisations have been regularly criticised for participating in public debate in elections. In fact, some seem to believe that community groups have a lesser right to talk in those spaces and important debates than political parties and candidates. So as part of this effort we've seen a commentary on charities that muddies the waters between the charitable purpose and a charity activities.

We hope this inquiry will be an opportunity to remind some representatives and others in the media that it's the purpose of the charity and how the donations are used to support that purpose that matters. At the same time as our sector is facing unprecedented scrutiny in this area, the big influencers in Australian politics—big business, lobby groups and other vested interests—can afford to spend millions on lobbyists. To rebuild trust, we believe we need a fundraising regime that protects the integrity of representative government and promotes fairness and participation in public debate. It means that all sectors must be transparent in how they exercise influence. It also means that we should not constrain public interest advocacy by charities or not for profits. So we are calling for a regime that doesn't restrict the ability of charities to use funding for issues based advocacy.

We do, however, need a clear distinction between issue based advocacy and political partisan electioneering and, in spite of its flaws, we hope the latest electoral bill will address this confusion. We need a commitment that charities and NFPs won't face a greater compliance burden than they do presently, and we note that the ACNC was brought in to end red tape and that fundraising was very high on that list. We shouldn't be subject to more extensive regulatory controls and administrative requirements than other third parties.

We need a clear and precise regime that is unambiguous. Charities and NFPs should not be left wondering which part of a regime applies to them or when it applies. Moving overall responsibility for fundraising issues to one senior minister and harmonising laws would be a good start. We'd also like to see the DGR and PBI arrangements reviewed to promote consistency with charity law and other tax deductibility schemes. Each of these steps, we note, was recommended by the Productivity Commission.

Finally, we'd like to call on the select committee to reaffirm its commitment to judging a charity's eligibility on the basis of its purpose, and we hope that the committee will use its mandate to look at ways to end the confusion and, in some cases, conflation between a charity's purpose and the activities it pursues. Each of these steps would help improve trust in our sector, for our donors and for the public. Thank you.

CHAIR: Thank you. Ms Azize, did you have anything to add there?

Ms Azize : No.

CHAIR: In your submission—this is predominantly to Anglicare—you note the difficult financial circumstances that a lot of charities and community advocates face. You refer to efforts to undermine claims, and I presume there you're talking about funds being cut and introducing gag clauses for organisations it partners with. Would you see a harmonised fundraising framework amount as a way that government could show support for charities and the advocacy work they do?

Ms Chambers : I think the removal of any confusion would help. I think it's quite difficult for people to be across every part of the fundraising regime that they need to be across. I should say that, with the way Anglicare Australia is structured, all our members are separately incorporated, and very few of them actually fundraise across state boundaries. However, I do know from working with Professor Myles McGregor-Lowndes up at the University of Queensland that there are a ridiculous number of rules, and I think anything that allows for confusion actually undermines public trust.

CHAIR: In terms of cost and predictable return, would you see harmonisation as an investment?

Ms Chambers : Yes, it would certainly help. One of the things that the lack of harmonisation does, and I noted that it was there in Baptist Care's opening remarks, is that it stops people fundraising in some areas. It's a bit like gag clauses. Sometimes people imagine a gag clause where there isn't one or imagine it to be bigger than it is, so by even using the terms it does actually gag. Similarly, confusion or difficulty in different regimes and different requirements—and I know the committee will know all the different numbers of days in different states and the number of things you need to register and put out there—does lead to people making decisions about fundraising, and it does cost money within our organisations to actually stay compliant with all those different rules.

CHAIR: You mentioned the connection between DGR restrictions and fundraising capacity. What would you like to see happen there?

Ms Chambers : I don't want to use the word 'harmonisation' again. We'd like to see PBI, DGR and charitable status brought into some consistency. The Productivity Commission had recommendations on each of these that we feel would be useful to be enacted. At the moment there is some confusion, and it does mean that we have some advocacy based issues that can't attract the same taxation status as others.

CHAIR: In your written submission you talk about how businesses have a clear self-interest in their advocacy, but their spending on lobbying and government relations can be written off as a legitimate cost. Membership fees that companies pay to their own advocacy bodies are tax deductable. What do you envisage should happen to give scrutiny to these areas?

Ms Azize : I think our focus is really just on creating a regulatory regime that doesn't over-regulate the charity sector compared to other sectors and creates fair transparency and accountability in those other sectors. We've made recent submissions on the electoral bill to that effect, and that's probably the more appropriate place to look at how to create accountability in those other sectors. We certainly support the harmonisation of laws. We do support the harmonisation of the PBI and DGR arrangements with the charity law. We note that some groups think that those arrangements are actually currently vulnerable to a High Court challenge because they are inconsistent, and the Productivity Commission also notes that the way it's structured probably distorts charitable giving in favour of organisations that enjoy the PBI benefits.

CHAIR: Are there other tax laws that disadvantage charities that have advocacy as their primary activity?

Ms Azize : I'm not aware of tax arrangements. Certainly, there can be funding contracts that make it difficult or create confusion about when a charity can undertake advocacy. That's why we've made a note of that and made a recommendation about that in our submission.

CHAIR: Is there any evidence to suggest that charities that provide services are more trusted or supported than charities that provide information or advocate for their purposes?

Ms Chambers : I'm not aware of any. I'm aware of lots of different polling that, over the years, shows that charities do have a greater trust—that people would rather use services from a charity than from government, for example, or that people are more likely to trust a website that has a .org than a .com. But I'm not aware that there's any in particular that shows more trust in services versus straight advocacy.

CHAIR: Does Anglicare raise funds online? Do you use online resources?

Ms Chambers : Our members would. We have 36 individual members. They're all individually incorporated, and the service based ones, with the exception of one, are all based in one state only.

Senator SIEWERT: Sorry, could you just say that again? Thirty-five are in one state.

Ms Chambers : Sorry, that was confusing. We've got 36 members, only one of which has a presence in more than one state.

Senator SIEWERT: Right, because I was trying to think, 'Where does Anglicare WA fit?'

Ms Chambers : Anglicare WA is operational only in WA, and the Brotherhood of St Laurence operates services only in Victoria. Anglicare Tasmania operates only in Tasmania.

CHAIR: Is that because of the differences between states and how difficult it is to work between states?

Ms Chambers : No, it's generally because of the way we have been structured. They are small organisations that are locally based and that have grown up. It is more difficult for them if they want to move interstate. Often funding arrangements—particularly state governments—obviously, don't fund across states, and, to date, most federal contracts still offer service as state based.

CHAIR: I've just got a couple of questions for Baptist Care. Can you elaborate for us on the ways that a harmonised fundraising framework would provide better protection for donors?

Ms Balzer : I think one of the concerns with the current status quo is that it's not really about protecting donors; it's about registering organisations and reporting on activities. There's a lack of transparency around that information that goes to state based regulators, and the focus is on complying with the rules rather than looking after the interests of donors. The ACNC has certainly put a focus on that, as far as that transparency of the reporting information being made available to the public is concerned, and I think that there's definitely room for clarity for donors so that they can know where to go to find out information about an organisation they would like to support and to find out whether they are meeting their obligations, as far as their reporting obligations or their registration obligations and whether they are in good standing with a single regulator, not several. So I think that simplifying and streamlining the system is going to be good for donors, particularly if it's also linked to greater transparency and clarity for donors around where to go to find information about the organisations they would like to support.

CHAIR: Your submission talks about the complexity of the current fundraising regime being a significant deterrent to promoting its deductible gift recipient status as a way of generating donations. Can you explain how that dynamic works? And do you know of other similar-type organisations that have experienced the same problem?

Ms Balzer : I think it's largely related to size. For Baptist Care Australia, although our members are quite large community service organisations, we are small. We have three full-time-equivalent employees. It was a cost-benefit analysis for us, where we asked, 'Do we want to invest resources into being compliant with seven different fundraising regulations in order to do fundraising, or are we going to invest those resources somewhere else and shelve the fundraising until hopefully a future point when it becomes more doable for us?' I've certainly read similar stories in a number of other submissions, particularly relating to smaller organisations, and you heard some this morning as well as some more case studies, so it's not just us.

CHAIR: Do you engage in online fundraising?

Ms Balzer : We don't—Baptist Care Australia doesn't; our members do.

CHAIR: For the committee, can you just explain the difference there?

Ms Balzer : Our members, like Anglicare Australia, are almost all independently incorporated—they're separate entities—and Baptist Care Australia is a company limited by guarantee that serves as a peak body to those member organisations.

CHAIR: If somebody in Baptcare Tasmania were fundraising online, how would they know whether they needed to comply with rules and regulations interstate?

Ms Balzer : As far as our members are concerned, if they are fundraising online they would be concerned to make sure that they were compliant across all jurisdictions.

CHAIR: Would they talk to you as the peak body, or the ACNC or—

Ms Balzer : They would tend to do that under their own governance and compliance arrangements, yes.

Senator STOKER: I might ask a question or two about Anglicare. You've explained how the organisations that deliver services, in particular in the states, are actually quite substantial. And you might object to the use of the word 'business', but they are now quite substantial businesses; their operations are quite significant. Do you see any potential for a conflict of interest with an organisation that is a substantial supplier of services to government also providing advocacy on the issues that touch those services in circumstances in which you could expect Anglicare's role to be directly impacted by any decisions of government arising from that advocacy? Is it the case—are you concerned—that there might be the potential for Anglicare's submissions not to be understood in the right light, given that they often would be a direct beneficiary of particular changes?

Ms Chambers : I think sometimes it's seen as a conflict of interest, but I think actually it's a real advantage, because if we advocate on something that we provide services on it means the advocacy is based on some very real and live experience. When it works well we're able to work with governments to improve services and look at what works, what changes the government's looking at and what doesn't work, or what's very expensive and what works better. That's when it's perfect and we can look at really good service, at co-design. We can look at working with the government to implement the outcomes the government wants. That works well. However, the other side of that is that when gag clauses are placed or talked about then it is flipped on its side, and people potentially get very frightened about making comments that could be seen as antagonistic to particular policy. It's a difficult one, but it's a line that our sector is used to walking and would like to continue walking. We certainly see ourselves as partners with the Australian people and with the government to do good services—to make the services better and to enable people to get on with their lives and not need our services for as long as they do.

Ms Azize : I will add something to that. There is a big focus in our submission about a charitable purpose, and how we use that money—

Senator STOKER: I noticed, yes.

Ms Azize : to serve our purpose and our mission. I think that's probably the best lens through which to frame it. There may be some incidental benefits in Anglicare taking a particular position but, really, the question is, 'Are we conducting advocacy in a way that promotes our mission?' We have some examples in our submission of things like the Home Stretch campaign. That's a partnership between several Anglicares around Australia and other organisations. Extending care to the age of 21 certainly would have an impact on Anglicare, but the key thing is that it benefits the people who we serve. Several governments have signed on to it and seen it in that light.

Likewise, we give the example of another one of our members, the Brotherhood of St Lawrence, which has worked with the government—

Senator STOKER: Yes, I read that.

Ms Azize : Yes. I think the right way to think about this is in terms of the charitable purpose and if we are conducting advocacy in a way that is consistent with that purpose.

Senator STOKER: Can I test it in this way? Can you point me to an example of where Anglicare's advocacy has ever had the position where a program which it has been involved in should be cut or that it should cease?

Ms Chambers : Perhaps one example which comes to mind—and I must say that the way my colleague described that was much better than my clumsy attempt!—

Senator STOKER: No, you both did well!

Ms Chambers : With our organisations—for example, the Brotherhood of St Laurence's mission is to end poverty in Australia; it's not to provide services to poor people or to people in poverty. The example that comes to mind is actually around the provision of employment services. Certainly, a number of our members over the years have advocated for the provision of those or how those are actually structured, to the extent that they have then relinquished their services in that area because they didn't feel that the policy settings allowed them to meet their mission. So they advocated for one set of outcomes for those services, recognised that they're not being met in the current regime and got out of those services. That might not be quite your question—

Senator STOKER: No, it's not really quite what I'm getting at. I'm getting at circumstances where there is evidence of there being no conflict of interest because Anglicare has been prepared to make submissions that would go against its perceived, at least, financial interests. Can you direct me to an example like that?

Ms Chambers : We could certainly take it on notice, because I'm sure there would be but one isn't coming to mind.

Senator STOKER: Sure.

Senator SIEWERT: Can I put this question on notice? It occurs to me that it's not where they've already been caught up in the system, essentially, but where people are scared to do the advocacy because they think that they'll contravene the rules or that they may be disadvantaged because they crossed that line, or they think they may cross the line, with the gag clauses.

Ms Chambers : Yes.

Senator SIEWERT: That's also where it impacts on working to their purpose—where organisations don't do something because of the rules.

Senator STOKER: Something specific of that nature would be helpful.

Ms Chambers : Yes. Certainly, a common conversation that people have is when we talk about it in terms of 'mission creep'. That's where people start to be just service providers rather than keeping to their mission. It's the so-called 'gag' clauses or people being frightened to bite the hand that feeds them—that's the other cliche. It's often the fear of that rather than the reality that stops people from speaking out.

Senator SIEWERT: That was one of the questions I was going to ask, so that's a good place to keep going from. I think it was you, Ms Chambers—but if it was you, Ms Balzer, forgive me—who spoke about the issue around the different rules that you have to operate under. The other rules that you have to operate under are the electoral laws, with the recent changes to those. It seems to me that that's the other law that charities can come into conflict with. I think you said that this isn't the place to talk about those, but in a way it is, in terms of how that then affects how organisations do their advocacy work. Do any of you have any comment to make on that now or do you want to take that on notice?

Ms Chambers : It's certainly something that's been very concerning to us—that there seems to be a broadening of the definition of things that charities mustn't speak about, and a broadening of the time, into issues that we would see as just being part of a democratic discussion. There's certainly a lot of conversation going on in the charity sector about what can be talked about and what can't. My fear is that, for some people, it will stop them talking out. My fear for that is that, as a normal member of the community, I won't hear from people with expertise in particular areas that we really need to hear from if we're building services and building policy to change these things.

Ms Balzer : We've just been through the process of figuring out what it means for us. It has added an additional compliance layer for us. As an advocacy organisation, from an abundance of caution—as you've just been hearing around the fundraising regulation—at the moment, if we have some expenditure that we think is going to meet the definition in the Electoral Act, then we will need to report on that. We've actually just put things in place to report on that—a whole different act. We've just added in an extra layer because of it.

Senator SIEWERT: When the ACNC was brought in, we were supposed to be reducing the layers of red tape.

Ms Balzer : Exactly.

Ms Azize : We're happier with where the electoral bill has landed but we were concerned over the last nine months or so, especially at the start of the debate, because there were so many inconsistencies with the definitions of 'advocacy', 'electioneering' and 'political speech' in the electoral bill compared to the charity law. That was a major concern for us. The charity law is really clear that charities can advocate for their own causes and their own communities and can't promote a candidate and can't promote a party. That's fair and that's got really wide support within the sector. Then you've got the electoral bill, which in its original incarnation would have put some limitations on anything that could come before an elector before an election, which is extremely broad.

Senator SIEWERT: In fact the electoral law has been changed to do that.

Ms Azize : Yes.

Ms Chambers : We are, probably like Ms Balzer, looking at our own work for the current change in the law, but we've also got an eye to the proposed electoral—

Senator SIEWERT: Yes, because that's another section, another lot of law.

Ms Chambers : That's right. We've got one, two and three—past, present and potential future—at the moment that we're all trying to juggle around in. My personal fear is that that will stop people from speaking, because it's too hard to keep juggling those, certainly for the current period. So we hope that there will be some certainty that comes with the new law.

Senator SIEWERT: Can I go to the issue of harmonisation of the laws? Ms Balzer, Baptist Care make comment on that in your recommendation 1: 'All levels of Australian government commit to harmonise fundraising regulation.' But then in recommendation 3 you say:

Repeal state and territory laws, and State and Territory regulators instead focus on regulating conduct using the Australian Consumer Law …

Can you just take me through that? I must admit I'm having trouble understanding where you're going with that compared to where I thought Justice Connect were going.

Ms Balzer : I just need to clarify that. The wording of our first recommendation is a little misleading. What we really mean by that is that all the governments agree to fix the problem, because you can't fix it unless everyone's agreeing to it. Using the word 'harmonise' is quite misleading there, and I apologise for that. But that's really what we mean.

Senator SIEWERT: A lot of other organisations have been using 'harmonisation' in a bit of a different way. So you agree that there needs to be a policy fix?

Ms Balzer : Yes.

Senator SIEWERT: Then your suggestion is?

Ms Balzer : The Justice Connect option.

Senator SIEWERT: Do Anglicare support that approach as well?

Ms Chambers : We do. It's not the focus of our submission. It's not an area where we have great expertise, but we'd certainly support that.

Senator SIEWERT: Yes. I understand you were going to different places in your submission, which I want to come back to in a second. ACCC are going to be on next, but you're probably aware that they're taking a different approach, or don't necessarily support the approach of Justice Connect. Could I ask you to take on notice to have a look at their submission—or have you had a look? If so, do you have any comments to make?

Ms Balzer : I've had a look. I'm not an expert in this area and I'm not a lawyer, so I don't know that I have a huge amount of insight to contribute. Obviously you have to take what they're saying very seriously. If there's a second-best option from the Justice Connect one that has to happen, then I assume it's going to be harmonisation. But our attempts to harmonise anything, as you pointed out previously, Senator Siewert, have stalled halfway. I would be pretty concerned about the time that that would take. It's been dragging on. If we could get it done more quickly, that would certainly be my preference—and it would be the preference of the charity sector, would be my guess.

Senator SIEWERT: Anglicare, have you had a chance to look at that and do you have any comments around the feedback from the ACCC about the use of Consumer Law?

Ms Chambers : No. We can take that on notice.

Senator SIEWERT: That would be great, thanks. I have a question for both of your organisations, realising that it's your member organisations that are probably more likely to have engaged—I think, Ms Balzer, you commented—in online fundraising. Have you had feedback from your member organisations around the current law and online fundraising? Have they had any issues with the current regulation or trying to use online platforms to raise funds? It's a growing area of fundraising. What's been their experience?

Ms Balzer : I haven't heard of anybody using a third-party platform. If they do online fundraising, it tends to be through their own websites. The main concern that I've heard is similar to the case study I mentioned where, in order to comply, they have to go through the process of the seven jurisdictions, which is a bit of a pain, to put it mildly. As far as I'm aware, our members don't use third-party online platforms, so I don't have any comments on that.

Ms Chambers : We're not aware of any. We do have a network of fundraising managers who get together once a year. I think they get together in about April or May. It's not been a conversation that they've had to a great degree. But, having said that, we've got the networks, so we can go back and ask them if there's a specific question.

Senator SIEWERT: Specifically it is: what are the issues that they've had? This might be for your members that cover a number of states but also for your other members. All the states are different. We learnt last week that WA is apparently even more of a problem child in terms of organisations that are using third-party fundraisers. If they're not registered in the state, they can't pass the money on. So in fact money from WA is now sitting basically unclaimed. It's been donated, but it's sitting there with the third party, unclaimed. Even though they're state based organisations, they may be working on a particular issue that people from other states want to contribute to. Has that been an issue, and how is it an issue when money has been donated to them from interstate? Even though they're state based and they comply with their state's laws, do they have to be registered in that state?

Ms Chambers : I know we've certainly had some issues around that where people make an off-the-cuff donation. We were talking about an example on the way down where a state based organisation might have a bit of a national profile or a profile beyond its state and, without them trying for it, they get a donation from another state. There's then the issue of trying to identify whether it did indeed come from another state. If it's come electronically, they may not know where it's come from. The other issue is around workplace giving. We don't know where that kind of donation comes from. I don't know a lot about this, but I know in our personal experience we get a small amount of money through workplace giving. The issue for us is that when we try to thank those people we can't, because the privacy requirements are such that we don't know who they are. We have raised that in the light of the electoral funding and disclosure bill because it has been a large area of encouragement of various governments over time; that's a good way for people to exercise philanthropy, but it does give difficulties in these kinds of areas.

Senator SIEWERT: If you've got any more detail, that would be extremely helpful. Workplace giving hasn't come up as much as some of the other online giving, so that would be extremely helpful. I want to go back to this issue around purpose and activity. I get the issue, but how is it playing out? Are organisations falling foul of the regulations because of their activity versus their purpose because the activity is not seen to be linked to their purpose? I haven't quite got it; I'm sorry.

Ms Azize : I think there are a couple of issues. I think there's a conflation in some circles about activity and purpose. We actually gave a really alarming example in our submission where there was a Treasury consultation that seemed to not understand that a charity's purpose, rather than its activities, makes it a charity. We gave our feedback on that at the time in our own response. I think there's a perception that leads to complaints. We've seen a couple of examples that we think are a bit questionable. We gave an example in our submission about somebody being targeted for their activities even though it was something they are entitled to do under the charity law. We are entitled to do things like compare policies between candidates. We are certainly not allowed to promote a candidate or make an endorsement, but we are allowed to compare policies. If someone gets targeted because of an activity like that, it sends a message across the sector that it's not a space they can talk in, even if it's technically within the rules. That's really the issue.

Senator SIEWERT: Can I just clarify this particular point. That's what I wanted to get to. How does it play out in terms of penalties to your organisations, immediately and in the long term?

Ms Azize : I think it plays out in erroneous commentary on our activities, and then it plays out further in terms of people deciding not to participate in activities they're entitled to do. I don't know if there are people who have gotten complaints or are being investigated for things they're entitled to do, but certainly there's commentary, and then I think there's a stepping back.

CHAIR: I'm aware of the limited time. Senator Abetz.

Senator ABETZ: Thank you very much for your submissions. Because of time, can you take on notice for me—both Baptist Care and Anglicare—what the total turnover of your operations, in all their various manifestations, is. What is the total Anglicare budget Australia-wide, and the same with Baptist Care? Then, if you're able to, can you tell me how much of that money finds its way out of the taxpayer through the Australian government or various state and territory governments. How much of it comes from government/taxpayer sources? Could you take that on notice.

On the top of page 6 of your submission—Anglicare, that is—you've made some comments about 'a number of politicians' et cetera. I note there's no footnote. If you could take on notice to provide the footnote for that, it would be very helpful.

Both of the witness bodies have indicated the complexity of the various regimes. If we had to punt for one regime, which one would it be? Chances are it's the Northern Territory, which doesn't have one! But, that aside, do you want to give that some thought and take it on notice as well? I'd be interested in your insight. If we went for harmonisation between the states and territories—and, chances are, you would need a working document to commence with—which would be your preferred starting point? That's the question I raise with you.

Ms Chambers : That would be a difficult one for us to answer. Unfortunately, a couple of your other ones on notice I could have answered straightaway but that one would be difficult for us. As I've explained, because of the way our structure works, there are very few people in our network who have experience of more than one regime.

Senator ABETZ: Right. For whatever reason, most people who have been asked this question have opted for the South Australian model. If you can, do your best in relation to that.

Ms Chambers : Okay.

Senator ABETZ: You mentioned 'gag clauses'—an emotive term. It's a pretty standard clause, is it not? Governments of all persuasions require that, if you are going to accept the largesse of the Australian taxpayer in a certain area to help deliver a government policy, there are certain protocols, or there is a sense of decency, whereby you don't then publicly advocate and make certain public commentary. It doesn't stop you from making private representations, does it?

Ms Chambers : No. On that, one of the areas that we pick up on—speaking for Anglicare, but I've worked in other parts of the sector as well—is that we would see ourselves as completely non-partisan. We want to work with the government and opposition of the day to get better policies and better outcomes for the people or causes that we're interested in. I think we've got a couple of examples in our submission where that can work better if the community sector, or the people who are working with the services—the people who are actually providing the services, working with the people—aren't silenced. It can actually give rise to much better government policy. But I do take on board that it needs to be very constructive advocacy, and we would say that it usually is. We wouldn't be criticising individuals or individual parties; we would be offering constructive ways forward for things to be improved.

Senator ABETZ: But there's nothing stopping you from doing that advocacy in private to the government.

Ms Chambers : I think one—

Senator Siewert interjecting

Ms Chambers : One of the biggest issues—and I agree it is—

Senator ABETZ: All it is, Senator Siewert, is that on many occasions, be it with a whole host of government activities, the service providers come and say, 'This is a bit of a problem,' or, 'We think somebody else is rorting it, and, to close that loophole, put'—such and such a condition—'on the next contract.' That happens all the time; it's very good and that's the way it ought be. But oils ain't oils; advocacy ain't advocacy either. There's always going to be a line that has to be drawn somewhere. That is why there is no difficulty, I would suggest, with private advocacy, but public advocacy can become an issue.

Ms Chambers : I agree completely. The phrase 'gag clause' is very emotive. But I think that charities and organisations that provide services are in a unique position to help the Australian public understand what some of the issues are. Not everyone is able to get in to representatives to see them privately. So working with your local community to help them understand the reasons why it might work to help young people in out-of-home care stay with foster parents voluntarily to 21 is, I think, a veritable purpose for our organisations. That does go beyond simply talking to representatives, because it's talking about something that we see would be helpful, and it's talking to everybody about that.

Senator ABETZ: If I might say, I think that was a good policy area, but, coming back to Senator Stoker's point, extending it to age 21 clearly also, therefore, potentially meant that Anglicare was going to get more money because, to service that, it would require more government largesse or taxpayer largesse. No doubt, that is where, potentially, that conflict of interest comes in. Let's not dwell on that point but accept what you were saying before.

Ms Chambers : Can I respond to that, though?

Senator ABETZ: Of course.

Ms Chambers : That particular campaign—it's obviously quite a useful one to talk about—is backed by a return-on-investment report by Deloitte consulting. It may bring more money into Anglicare coffers to begin with but it's actually going to save money down the track in mental health services, homelessness programs—the various kinds of services that we run and that cost the taxpayer a lot more money—so we are advocating for something now, but against something later.

Senator ABETZ: How do we protect this situation? Let's use a bizarre example: a charity says that you've got to protect pencils. They advertise that pencils need protection during an election campaign and they spend money on 30-second or 45-second ads promoting the protection of pencils. Then, within the same ad break, you just 'coincidently' have: 'Only the Liberal Party will protect pencils.' Can you see the issue that arises if a charity says, 'We're only advocating for pencils,' but then a political party opportunistically latches onto that? The charitable sector's money would be seen as assisting a political party. Then, of course, if I were smart—I only get a certain amount of tax deductibility if I donate to the Liberal Party—I would donate, let's say, to Anglicare, fully tax deductible, to their campaign of protecting pencils. How do we protect against that?

Ms Azize : I think the key thing is that the charity protecting pencils doesn't reflect on which party anyone ought to vote for if they want to protect pencils, and then I think it's a matter of—

Senator ABETZ: That's why I said 'coincidence'. If we came to a sweetheart deal about the protection of pencils, you could do that all innocently, and I just happen to also then place a very short trailer in the ad break saying, 'Only the Liberal Party supports pencils.'

Ms Azize : I think, if every other aspect of the regulatory regime is working well and everybody is doing things like disclosing who they're meeting with and disclosing all of those other arrangements, it shouldn't be a problem. If parties respond to public campaigns, I think that's just really the nature of debate, as long as it's within the rules and the charity hasn't actually provided advice to anybody on which party they ought to vote for. We talk a lot in our submission about trust between charities and donors. Any display of that that's too overt—if we did anything like that, I think we'd be eroding the trust between us and our donors. I think there's that element to it as well—that non-regulatory issue of trust with our donors.

Ms Balzer : In that example, the sweetheart deal is the problem point. That would be an unethical interaction. But, if it's a political party observing that there's a community concern about pencils and saying, 'We're going to stand up for pencils,' that's the political process.

CHAIR: Senator Abetz has probably just created a whole new charity!

Ms Balzer : I don't think anybody would argue that the sweetheart deal would be ethical. If there's no sweetheart deal, well—

Ms Chambers : If we get either, any or all parties agreeing to our Home Stretch campaign, we'll be really happy, but that's not to say that we set out to do this to get a particular political party elected. We set out because we knew it would be better for young people who have been in care, who are particularly vulnerable, to have their home status extended to 21. And we'll be very glad about any party that comes on board with that.

CHAIR: We have gone over time by quite a lot. I thank you all for your contribution today and your organisations' submissions.

Ms Chambers : And I will liberate the pencil!

CHAIR: I'll be watching very intently to see if Senator Abetz is behind pencil saving!