Before the election, the Morrison government’s charities commission began issuing letters that threatened charities with deregistration if they were engaged in advocacy. Many regard these ‘reviews’ as a means of silencing the sector. By Kristine Ziwica.
New front in Coalition war on charities
On March 11, an email landed in the inbox of Carolyn Frohmader, the longstanding chief executive of Women with Disabilities Australia. The email was from the Australian Charities and Not-for-profits Commission (ACNC). It indicated the commission was conducting a “review” of charities that were registered to receive tax-deductible donations.
The commission demanded extensive information from the charity to determine whether it “meets the requirements” to be listed as a public benevolent institution, a particular subtype of charity whose main purpose is to relieve poverty, sickness, suffering or disability. The commission warned that “an organisation that provides awareness raising, research and advocacy services to the whole or part of the community may not meet the requirements for a PBI as these types of activities may not be considered to be the provision of relief”.
The email contained an interesting take on the law that applies to a public benevolent institution’s ability to conduct advocacy, recently clarified in a ruling by the Administrative Appeals Tribunal. The statement from the regulator was at best misleading and at worst wrong.
More worryingly, the email gave the charity 14 days to meet the commission’s demands, stating that failing to do so “may have consequences for your charity’s registration and its eligibility for tax concessions” and “we can also issue penalties for failing to comply with obligations”.
Frohmader didn’t know it at the time but her organisation had been caught up in the Morrison government’s war on charities – a war designed to intimidate them into silence by prosecuting the incorrect claim that certain charities in receipt of tax-deductible donations cannot engage in “advocacy”.
The latest front in this war has been a series of reviews carried out into the operation of individual charities, requesting large amounts of compliance material with extremely short time frames for response. These reviews are arbitrary and are not based on any suspicion of a violation. Some argue their purpose is to discourage charities from even considering advocacy, for fear of being tied up in an audit.
“I was immediately distressed by the contents of the email. I was confused and terrified by the fact that our response was due by March 25th, leaving just six business days to provide the response,” Frohmader tells The Saturday Paper. She had been on personal leave and the email took a few days to come to her attention. “I was still on personal leave. My daughter had only recently been diagnosed with a brain tumour, and myself and the staff at WWDA were preparing to give witness testimony to the disability royal commission about the astronomically high rates of violence perpetrated against women with disabilities. There was no way I could respond to the ACNC’s demands on time.”
Frohmader managed to negotiate an extension, giving her until April 18 to comply. But she received another email from the commission, four days after what she says was a “comprehensive” response, demanding yet more information. This time the email included a table with a number of the charity’s “activities” and work areas. This email stated: “Please provide a quantitative breakdown of all of the charity’s activities below.” The table included a strange list of different and often overlapping areas of work, a column to “quantify” in monetary terms how much money was spent on each “activity”, and a column to “quantify” how much “time” was spent on each.
Importantly, as with the previous email from the commission, it also stated: “Not providing the information by 6 May 2022 may have consequences for your charity’s registration and its eligibility for tax concessions. We can also issue penalties for failing to comply with obligations.”
Frohmader was shocked. “When I read the second email and saw the ‘table’, I immediately burst into tears. I then began to vomit uncontrollably in my office and didn’t even make it to my bathroom in time.”
She adds, “It is impossible to put into words how traumatised I was at this point. I had worked for weeks, mostly at night and on weekends, to provide the formal response to the ACNC to answer the questions posed in their original email.”
Frohmader has been the chief executive of Women with Disabilities Australia for 25 years. “I have devoted almost half my working life to advocating on behalf of and supporting women with disabilities,” she says. “I suddenly felt that I must have done something ‘wrong’ to put WWDA in a situation whereby it was being ‘investigated’ by the ACNC. I knew that we had never, ever defaulted on any of our regulatory obligations. I was devastated. And I was very, very frightened.”
The government’s crackdown on charities began in 2017, with the appointment of Gary Johns as commission chair. Johns is a long-time critic of charities and founded the “Charity Watch” initiative at the Institute of Public Affairs. At the time of his appointment, the assistant treasurer, Michael Sukkar, was forced to fend off criticism that Johns was a captain’s pick chosen to undermine the commission from the inside.
“This is a bizarre appointment,” David Crosbie, chief executive of the Community Council for Australia, said at the time. “Gary Johns has made numerous public statements that clearly indicate he is opposed to many charities and their work. Only a government committed to attacking the charities sector would put someone like Gary Johns in as head of the ACNC.”
Very soon, Crosbie and others’ concerns about the prospect of a sustained attack on the charity sector came to pass.
“Since 2017, charities have come under consistent attack for engaging in issues-based advocacy, particularly in the lead-up to elections,” says Alice Drury, a senior lawyer at the Human Rights Law Centre. “Successive Coalition governments have attempted to silence charities through targeted amendments to electoral laws and charities regulation.”
Most recently, in 2021, the Morrison government introduced new regulations that would have given the Australian Charities and Not-for-profits Commission sweeping powers to deregister charities for speaking out on behalf of the communities they serve. This was despite unanimous opposition from the charity sector and a confirmation from the charities commissioner himself, Dr Johns, that the laws addressed an issue that did not exist. A report in Pro Bono Australia noted that, “amid the Morrison government’s push to crackdown on the issue of ‘activist’ charities, the charities commissioner says current data does not suggest this is a problem”.
“It was an attack on civil society, free speech and our democracy. And charities fought back,” says Ray Yoshida, co-ordinator of the Hands Off Our Charities alliance. “The alliance co-ordinated a multifaceted response that put a spotlight on the issue in the media and galvanised charities and their supporters to call on federal politicians on all sides to oppose the regulations.”
On November 25 the senate voted 24-19 in favour of independent Senator Rex Patrick’s disallowance motion, meaning that the regulations would never come into effect. But that hasn’t stopped the commission from pursuing the same objectives through more surreptitious means.
Speaking on background because they are not authorised to discuss individual cases, charity lawyers tell The Saturday Paper that Women with Disabilities Australia is not alone. They are assisting numerous organisations that have received similar “belligerent” and “over-reaching” letters.
They argue the regulator is not acting according to its own principles and is not following a hierarchy of enforcement actions. It is possible the commission is running against the principles of the 2013 Charities Act, which calls for “regulatory necessity”, “reflecting risk” and “proportionate regulation”.
Lawyers in the sector have told The Saturday Paper that many charities have simply complied with the letters, fearing repercussions from the regulator if they speak out or rock the boat. This week, however, Women with Disabilities Australia filed a formal complaint with the commission about its treatment.
One eminent charity law expert told The Saturday Paper the fact that the commission accepted $1 million a year from the Morrison government to undertake these reviews as part of the government’s “reform” program could be seen to put the regulator’s independence at risk as it suggests the government is “directing” its activities.
Krystian Seibert, one of the architects of the commission’s regulatory framework and a charities regulation expert at Swinburne University, says the correspondence he’s seen makes him “very concerned” about what the commission is doing. “It’s inconsistent with the intent of the ACNC legislation and the objects of the ACNC Act.”
Seibert says the commission was never intended to be an “overbearing regulator” and the objects in the act were specifically drafted to make this clear. In these cases, that appears not to have been followed. “There are no allegations of misconduct, however the charity is having demands put to it to provide very detailed breakdowns of spending on its activities in very short time frames, the bare minimum amount of time required under legislation.”
“I can certainly understand how this would be intimidating,” Seibert adds. “There’s real potential for such a compliance approach to have a ‘chilling effect’ on advocacy, with charities being less willing to undertake legitimate advocacy activities for fear of being reviewed in such a manner.”
When contacted for comment, a spokesperson for the commission said she was unable to discuss the circumstances of a particular charity. She said the review of charities “enhances confidence in the charity sector” by ensuring tax deductibility is “reserved for eligible charities”. She added that the commission had taken steps to “ensure as little disruption to the charity as possible”.
For Crosbie and the Community Council for Australia, the recent spate of enforcement action initiated by the commission is deeply worrying. “All governments of all persuasions do not like it when charities hold them to account on these issues that are impacting negatively on the community or the environment,” he says. “But for me, advocacy is the heartbeat of change for the better in our world. The idea that we would silence voices because they are connected to a charity is incredibly destructive, not only for our democracy but for the country.”
With the assistance of pro-bono lawyers, the review of Women with Disabilities Australia has now been “resolved”. But that hasn’t stopped Frohmader from speaking out.
“What they’ve done to us, to me, is unforgivable,” she says, “but then I thought, ‘What about the others?’ ”
Seibert says Women with Disabilities Australia is entitled to an apology, but the commission needs to do more: “The ACNC must be publicly transparent about what steps are being taken to ensure that this matter is not reflective of systemic issues with its regulatory approach – and if there are systemic issues, what actions are being taken to address this?”
This article was first published in the print edition of The Saturday Paper on May 14, 2022 as "Fighting charities".
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