As we all know, more philanthropic support is essential to tackle difficult and expensive environmental problems. Recent moves in Canberra with the Reef Trust and Threatened Species prospectus show that the Australian Government is also thinking about the importance of philanthropic support. So it’s hard to understand the current flurry of regulatory activity which, if it progresses, will likely restrict the flow of philanthropic dollars to the environment.
What are the regulatory issues?
Treasury consultation on deductible gift recipient (DGR) reform
A number of AEGN members have made submissions to this very important consultation, which is expected to result in legislative changes. In these submissions, there is strong unity across the charitable sector that reform is needed to reduce system complexity and administrative burdens.
While there is potential for positive outcomes, concern is high across the sector about potential reforms singling out or restricting advocacy. The most explicit restriction is the recommendation that environmental DGRs allocate 25% – 50% of their expenditures to environmental remediation. This would remove the right of organisations to choose how they achieve their charitable purpose. Many would be compelled to direct significant levels of funding towards activities which contravene their charitable purpose. Less resources would be available for crucial advocacy work. The whole movement would be weakened by this reform.
How would this affect AEGN members?
AEGN members would also be touched by the remediation obligation, especially those members who can only make grants to DGR organisations. As a funder, would you be able to continue using your own processes to determine the most effective use of your foundation’s funds – or would you be obliged to direct funding towards remediation, even though it may not be part of your strategy? Bizarrely, providing funds to an environmental DGR for work that isn’t remediation could actually make it harder for them to meet the remediation obligation as it is calculated as a percentage of overall donations. The more donations overall, the more funding which needs to be directed to remediation. How would due diligence be undertaken in such a situation?
The AEGN will continue to monitor this situation and keep members informed of developments. Read our submission.
Foreign donation restrictions could be extended to NGOs
After months of news stories decrying foreign donations to political parties for elections, legislation is expected to be in front of Parliament very soon, introducing greater restrictions. On the face of it this should have no implications for the not-for-profit sector or philanthropy. However, the Joint Standing Committee on Electoral Matters has recommended the ban on overseas donations be extended to charities (with dissent from the ALP and Greens members). It is unclear how wide or narrow such a ban would be applied and charities are understandably concerned.
What would this mean for Australian NGOs?
Restrictions on donations from international foundations would have significant implications for all Australian NGOs which rely upon overseas funding for their work. There will be environmental implications; research shows that of all giving areas, ‘environment and animals’ is the second most funded issue in Australia by US foundations, which granted over $11 million to this area in 2011-2013. Australia has a small population and a large land mass, with globally significant lands and waters. We need to look beyond our shores for philanthropic support and should be welcoming such help. Contact Esther Abram if you would like more information.
The 2016 State of the Environment report documents the decline of Australia’s natural environment and the growing challenge presented by climate change. More resources are needed and it’s understandable that governments are seeking greater philanthropic investment into government-led programs. What doesn’t make sense is stemming the flow of philanthropic funding and cutting access to funds for environmental organisations and advocacy work.
Join us in Canberra to delve deeper
On 12 September 2017, Environmental Philanthropy Meets Parliament will explore the relationship between environmental grantmakers and the Australian Government with a special breakfast event in Canberra. For more information or to register your interest in attending, please contact Esther Abram.