A Little More About Us

Integrity, honesty and unbiased assessment are at the core of Giving Guide’s (GG) mission. The charity sector is important to the economy and culture of Australia. We believe independently assessing the accountability, transparency and effectiveness of Australian charities beyond what is currently available is important to its future.

Giving Guide anticipates enhancing the level of governance of Australian charities. An independent advisor would benefit the sector by helping charities consider and work towards exceeding the existing governance standards of the Australian Charities and Not-for-profits Commission (ACNC) to benefit donors. Helping build relationships, confidence and trust to maintain ongoing support of charities and their supporters.

Good Guidance

There are several charity analysis tools used around the world. Most are found in places like the United States, Canada and the UK. Our program will have selected the best assessment options from the existing models that will best reflect the available information reported by Australian charities.

Donors need the capability to easily assess charities they would like to support, charities need to prove they’re capable, responsible and worthy. Giving Guide provides a place to start, ease and begin the process.

The charity sector is very important to Australia. There are many charities in Australia providing essential services that otherwise may not be performed. This is especially apparent when across the sector the Australian Government contributes approximately half (47%) of the revenue received by charities³.

Charity evaluators

Currently, you can find charities that benefit a cause area, but there is little independent information regarding how well they support that cause. The Australian Charities and Not-for-profits Commision (ACNC), Australia’s charity regulator has a set of governance standards. These 5 standards are broad and potentially omit important information.

In the United States charities publicly report their financial information every year to the Internal Revenue Service (IRS). All charities submit the same form (990(c)) annually. They also ask for financial information that divides what is a program cost to an administration cost. Canadian charities have a similar process in submitting an annual T3010 information return, together with financial statements to the Canadian Revenue Agency (CRA). This provides the opportunity to assess charities against each other using similar reporting standards. The Australian market is less rigorous and has different standards for the size and location of the charity.

Many charity evaluators have different approaches but a general model is followed. The evaluator collects information about charities from multiple sources (websites; public information; regulatory submissions, voluntary submissions, press, etc.). The evaluator then assesses the information and posts a report, some or all of the information on its websites and provides accreditation or an evaluation⁴. This is meant to help donor’s make well informed decisions.

Giving Guide is an information portal that can help link donors and philanthropists to charities building trust through the provision of information.

The gap in the Australian charity sector

The ACNC has gauged declining trust in the sector since its establishment in 2012¹. It has also acknowledged its limited legislative power and resources². The ACNC has the powers to investigate legislative breaches of conduct including: Erroneous charitable status; Poor record keeping; Provision of inaccurate information; Use of funds for private benefit; Not being transparent or accountable to its members; Involved in fraud/criminal activity; Has non-suitable representatives/members; Failed to act in good faith; and Failed to disclose perceived/actual conflicts of interest.

It does not have the power to disclose or assess information in many other circumstances including: Where information could protect public trust and confidence in the sector; Information produced during an investigation; Assessing the way a charity fundraises or how much of its gross income goes towards fundraising; The quality of services a charity provides; Informing the public of what charities have been involved in unscrupulous activities; Assessing cost frameworks and overheads in running charities; and Poor accounting practices. However recent changes to the legislation may permit the ACNC to disclose information that protects public interest.

Independent charity evaluators have several advantages over charity commissions⁴. The first is competition, an evaluator site depends on its reputation and continual improvement of its methods and worth to the sector⁴. An Australian independent evaluator could indirectly penalise unscrupulous charities. The ACNC can only revoke a charity’s charitable status and in extreme cases suspend board members, whereas an evaluator can sensitively respond to low level offenses that are of interest to donors including overtly high salaries, financial inefficiency and poor governance⁴.

Another advantage of independent evaluation of charities, is the incentive of attaining positive ratings or approval is enough to persuade charities to supply the necessary information. An independent evaluator could identify and highlight charities that overpay for-profits to organise fundraisers or demonstrate poor governance⁴.

Why are we needed?

Giving Guide is needed as the ACNC is a regulatory body not an independent assessment tool. It will perform many of the same functions as a government charity regulator with less intrusion, and also provide donors and charities with additional services that the ACNC cannot.

Giving guide will be able to address information needed to appropriately assess the quality of services a charity provides. Comparisons of records on shared goals have shown charity evaluators are better able to meet these goals than government organisations⁴.

Australian perspective

Australian adults gave $12.5B to charities and not-for-profit organisations in 2015-16⁵. This is over 80% of the population (14.9M). The same report also reveals why people don’t give. Many reported they did not give because of concerns about how the money would be used. Common responses were “I think too much in every dollar is used in administration” and “I don’t believe the money would reach those in need”. In younger donors aged 18-34 two of the top five reasons why they didn’t give were “I don’t know where the money would be used” and “I don’t believe that the money would reach those in need” the second and fifth reasons, respectively⁵.

Financial and performance information provided to donors about charities is important for due diligence regarding the operating procedures of a charity. In a CHOICE survey on donor behaviour, 81% of respondents did not know how much of their donation reached a charity’s beneficiaries after fundraising costs and overheads were subtracted, but over 90% of respondents wanted to know⁶. The reporting situation for charities in Australia is highly complex which generates duplication, misinformation and inconsistencies⁷.

Who benefits?

It will be the Australian donor that benefits from Giving Guide. Charities that go through the Giving Guide assessment and surpass the qualification benchmarks will help gauge the level of transparency, governance and financial responsibility it takes to operate a charity in Australia.

Giving Guide will also have dedicated pages enable a charity to discuss the impact they are having in their chosen cause. If required, they can also explain any inconsistencies, difficulties or situations that may have influenced their outcomes. We will be working with the charity sector not monitoring or regulating, but increasing trust through transparency in partnership.

Welcome to giving,

Guide

References