Not-for-Profit

One of the panelists will be Dr Matthew Turnour, a practising lawyer and academic who was one of the authors of the Australian Charities and Not-for-profits (ACNC) legislation report tabled in parliament on 22 August 2018. He spoke to us about the battles for independence that are yet to be fought in the sector.

Following the release of the ACNC report this year, what do you think will happen next?

In recent years we’ve seen contention over the remit of the Commission. Behind that has been a broader debate over the independence of the NFP sector. The question is: to what extent should governments regulate the internal management of voluntary organisations and to what extent should these organisations be allowed to manage themselves? The right of the state to exercise authority over religious organisations, for example, has always been controversial, but we may expect other civil society organisations, such as environmental organisations, to take an increased interest in the Commissioner’s powers.

Increasing pressure for public disclosure and accountability will continue to impact on regulation in the sector. Calls for accountability are often justified on the basis of donors’ rights to information. Yet donations account for only about 7% of revenue in the sector (a fact little discussed), so I expect the justifications for accountability to shift – or for a push back against the public’s right to know.

Australian Governance Summit 2019

How do you see this contest over the independence of the sector resolving?

I have quiet confidence that over time we will find a middle way that accommodates divergent views. There is a lot to be decided in the coming years regarding regulation of NFP organisations. The Review recommended that the powers of the Commissioner to replace a responsible person be removed. This would bring the ACNC Commissioner’s powers back to be more in line with commercial regulation, and would take some of the heat out of the independence debate.

The government will no doubt consider the other recommendations. I also am hopeful some issues will be addressed as a part of the larger discussion around the move towards a national regulatory scheme for NFPs. There is pressure building for a national scheme with a referral of powers to the Commonwealth by the states on certain subjects. There is a national scheme for corporations, so why not for NFPs? I think that as the details of national scheme are explored, the balance between independence and regulation of the sector will be refined.

How are advancements in technology likely to affect the sector?

The internet has changed fundraising. It has become international. It is now as easy (and perhaps easier) to make a donation to say a religious institution in the US as it is to make the same donation to an Australian entity. This has implications for tax and regulation. The capacity to communicate almost instantaneously with very large numbers of people has profoundly changed volunteer and donor mobilisation. This will be increasingly significant for NFPs involved in political and, more generally, lobbying campaigns. Big data profoundly affects the capacity to gather, store and use information, but its application to NFPs is still being comprehended. The NFP sector is comprised of interactions that lie outside of the constraints of business and government, and so these people are entitled some privacy. It remains to be seen where the boundaries will be drawn around that privacy. Fundraising, mobilisation and privacy are just three areas where I think technology will significantly impact the NFP sector.

Recent Royal Commissions have sparked public discussion of the place of ethics in governance. How do you see this focus on ethics playing out in the governance of the NFP sector?

I am inclined to think that the discussion about the place of ethics in governance has been ongoing, irrespective of the recent Royal Commissions. The Royal Commissions have significantly changed, though, the extent to which boards rely upon and engage with management of NFPs. Over the last 20 years there has been increasing pressure on boards to not involve themselves with management of their organisations – which has generally been quite appropriate. We will see, however, boards increasingly inquiring into operational matters. I expect boards to be poking their noses in much more than they have in the past.

Dr Turnour has over 30 years’ experience as a lawyer in not-for-profit (NFP) and commercial areas of practice and over 25 years of leading business in both executive and non-executive roles.