PO Box 10113
Ph: 0407 844 111
President of Love Australia or Leave Party
26th April 2020
Submission: Royal Commission into National Natural Disaster Arrangements
Thank you for the opportunity to provide a written submission in relation to a Royal Commission into National Natural Disaster Arrangements.
The 2019-2020 summer season has been notorious for its severe bushfires, that raged from Queensland all the way down into Victoria, effectively dominating the east coast of Australia. The destruction has been significant with 5 million hectares of land burned, over 2,500 number of homes lost, and 29 number of lives lost, to say nothing of the countless animals that perished.
With every disaster, sometimes the only thing people have left to cling onto is hope. Hope, that they can rebuild. Hope, that people will consider their plight and donate generously.
But what happens when the very charities that are supposed to be the ones supplying you with that hope, only deliver on a third of what they promised?
Charities that have collected monies for the recent bushfires have failed to pass on the full amount of monies donated.
"Australian Red Cross has been one of the most trusted not-for-profit health service providers in Australia for over 90 years – for good reason. You'll benefit from our ethical practices, deep experience, large network and professional team", reads the self-promotion blurb from their website.
The reality though is very different.
The Red Cross has a particularly nasty reputation of raising good money after natural disasters only to continually find itself questioned over the whereabouts of the money and being asked for a breakdown of where the money has been spent.
The Australian Red Cross is registered with the independent national regulator of charities, the Australian Charities and Not-for-profits Commission.
During the current bushfire season with the promotion of the publicly funded ABC, the Red Cross raised $127 million, raising twice as much as any other organisation.
That is in addition the $47M in grant money that the Red Cross receives from the federal government.
Then there is the $36M from the state government.
Don't forget the Community contributors, made up mostly of large corporations, that are honoured with a mention on the Red Cross website if they have donated more than $50,000 in cash or in kind. There are 30 corporates on the list, and at a minimum of $50,000 per corporate, that's a tidy sum of 1.5 million.
Then there's the added little fringe benefit of 223 corporates who are part of the Red Cross giving program, enabling employees to donate $900,000 through their payroll system. The top ten workplace giving partners there were ANZ, Telstra, NAB, Lion, King Wood & Mallesons, IAG, Price Waterhouse Coopers, St George Bank and Orara Business Services. How many people that donated to the current Bushfire Appeal forgot that they already give to the Red Cross through their wages, and gave again?
In February, the Red Cross had only distributed to bushfire victims $30 million out of $127 million raised.
On the 22nd January, The Australian media started to question why the Red Cross were withholding so much money compared to what had been donated. At that time the Red Cross had paid out $30M by way of $10,000 in emergency grants for those whose homes were destroyed. $20,000 bereavement payments were amiable to the next of kin so someone who is bereaved for funeral and related expenses. The Red Cross outlined that they were planning on withholding the money for a minimum three-year recovery program.
However, on the 3rd February, their website was amended to announce an additional $10,000 payment on top of the $10,000 already available for people who have lost their homes, $7,500 for people that were hospitalised as a result of the fires and $5,000 to repair structurally damaged homes, bringing it to a total of $61 million spent on immediate relief, well short of the $127 million that the Red Cross has taken in.
Why were two separate lots of $10,000 given? Why not just a one of $20,000 payment? Surely double payments mean more administrative work. It's almost as though the negative media exposure forced their hand in making the second additional payment.
Recently, the Red Cross conceded that up to 10% of all donations would be set aside for administration costs, a total of $12.7 million, claiming it had always been upfront about this. St Vincent De Paul, in comparison, said it would not take administrative fees for its emergency appeal.
The Red Cross is also at odds with its own promise last year to put 100% of donations from its "HELP AUSSIE FARMERS" towards helping severely drought-affected farmers.
It would appear that $12.7M isn't enough to cover their administration costs, as The Red Cross were advertising in JB HiFi stores under the pretence of assisting bushfire victims, only now they are advertising their intent to take an administration fee out of your donation. They just won't specify exactly how much that administration fee will be, and they have labelled it as "supporting our volunteers and covering their expenses". The public becomes annoyed when hearing that 10% of donated money is going in administration, but who can get angry at volunteer’s right? The Red Cross are nothing but sly when it comes to exploiting the publics emotions for their own personal gain.
As it currently stands, the Red Cross has stated that the remaining two-thirds of the money will be kept for long-term emergency management.
Most people that donated to the Australian Bushfire Appeal would have done so believing that 100% of their money was going to help victims of the bushfire, and in fact probably believing that the Red Cross' main work is helping out in a national emergency.
This is far from the truth.
The Red Cross has an intent focus on assisting refugees and reconciling with the Indigenous. So, when one donates to the Red Cross, how is one assured that their money is going specifically to help bushfire victims and not refugees?
While bushfire victims wait for the money that was donated to the Red Cross for them, the Red Cross has already moved on to its next humanitarian mission - The Coronavirus. In keeping with its faltering reputation, problems have already surfaced with the Red Cross in China. This is nothing new. In the wake of the 2008 earthquake in Sichuan province, the Red Cross was criticised for allegedly misusing public donations.
How is this level of mismanagement allowed to go on time and time again and emergency after emergency? It's almost as though there is nobody to oversee the corruption that is occurring on what can only be described as a world-wide systematic level, and if there is, that they are following suit by turning a blind eye.
The Australian Charities and Not-for-profits Commission (ACNC) is the national regulator of charities. The ACNC was established in December 2012 to achieve the following objects:
maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector.
As stated on their website:
As part of our compliance role, and in investigating concerns raised about charities.
The ACNC regulates charities under the ACNC Act by:
providing guidance, education and advice to help charities meet their legal obligations
monitoring charity compliance and managing non-compliance.
The ACNC monitors how registered charities comply with their obligations as set out by the ACNC Act.
The ACNC works across the whole of government to address risks that pose a threat to trust and confidence in the charity sector. They use tools and approaches to proactively identify trends and emerging risks in the sector.
When charities do not meet their obligations, the website states they take appropriate action proportionate to the problem they seek to address.
It would appear that this regulatory agency is nothing but a toothless tiger at best, put in place to give donors reassurance of accountability, when in reality, they appear to do nothing more than turn a blind eye. In fact, at best they only seem capable of acting when the general public have already lost complete faith in the charity, instead of preventing the public from losing faith to begin with.
People have become extremely sceptical about donating to charities, particularly the Red Cross, and after examining the worldwide systematic cases of corruption, mismanagement and outright fraud, it would seem they have every right to be sceptical. The Red Cross website states that the Red Cross has long experience in managing donations with integrity and undertaking effective distribution. That's a bold statement when thus far all evidence is to the contrary.
It's ironic that the very charity, chartered with assisting with epidemics and emergencies, is the same charity that has its own epidemic and systemic levels of corruption, mismanagement and in some cases outright fraud.
The ongoing trust issues that lies with the Red Cross need to be rectified as a matter of priority before the public can even think about donating again. The public demand better, but more importantly, the victims deserve better.
St Vincent’s de Paul
St Vincent de Paul has recently come under fire along with other charities for its failings to hand over Bushfire donations received by the public, with elected leaders of bushfire affected towns lashing out at the Australian charities for their failure to release funds and give the money to the many victims.
The St Vincent De Paul’s NSW CEO Jack de Groot spoke to 7News at the time when hundreds of Australians had already lost their homes saying, he understood the anger and was willing to meet with the NSW Transport Minister Andrew Constance, who invited charity bosses to visit fire ravaged areas.
When researching the St Vincent de Paul Society, it was evident that they appear somewhat more organised as an organisation as opposed to the Red Cross. Also, what was encouraging, was finding that St Vincent de Paul does not take administration costs out of any monies donated, effectively guaranteeing that every cent donated, 100% is given back to those in need.
Where St Vincent de Paul appears to be honouring their agreement to disperse the money to the bushfire victims, albeit in a rather slow manner, what is a concern is the level of salary that their executives are on is extremely excessive for a 'charity’.
One of the biggest complaints from the general public has been how the money is being spent by the charities. The Salvation Army was no exception to the perception that as a charity they too were putting a portion of the money they received into administrative costs, and/or delaying giving the money to those in desperate genuine need.
The Salvation Army
The Salvation Army is a little different to the St Vinnies and Red Cross appeals. When people originally donate to the Salvation Army, they initially do so by way of pledge, (an undertaking to make good on your promise to donate money) at a later date. In other words, whilst the Salvation Army made the claim, they had received a total of $43 million dollars, it was at that time only ‘pledged’ money. The actual amount of money actually received by the Salvation Army is far less, while they wait hopefully that people will honour the pledges they made.
On the 5th February, the ACNC Commissioner, the Hon Dr Gary Johns, addressed concerns raised about charities use of funds for the bushfire relief in a column published by The Australian. The Salvation Army elected to reproduce, with permission, the full article on their website.
"The Australian Charities and Not-for-profits Commission does not run charities; it does not tell them what to do. But, if they stray from spending their money on the cause for which they were established, we can step in and put them on the right path or deregister them.
Most important, we do not need an excuse to demand to see the books; we can step in at any time and for any reason.
Now is not the time for such action. Let charities get on with the complicated business of delivering their services to those who suffered in the bushfires.
In six and 12 and 18 months we will audit some accounts and ask questions as to how the money is being spent."
On the 6th February, Love Australia or Leave Party made direct contact with the Salvation Army media liaison. We were instructed to send our questions via email to which they would respond. We posed questions such as: Can you explain the difference between short-term, medium term and long-term assistance and how that is implemented? Does the Salvation Army take a percentage of donations for administrative costs, and if so, how much? Does the Salvation Army receive any kind of government grants, be it state or federal?
The Salvation Army had adequate time to respond. As of the 22 April, our email questions remain unanswered and no response has been received.
Our research of the Salvation Army didn’t highlight any areas of gross misspending of donated funds. This doesn’t necessarily mean it hasn’t occurred, only that we were unable to locate evidence of this.
Celebrities and well-meaning members of the public fundraising using social media platforms such as GoFundMe and other platforms is a cause for concern
Celeste Barber's bushfire fundraiser raised millions attracting more than $51 million dollars.
This was an absolutely fantastic effort by one individual, and rightly so Celeste should be commended. However, the end result of Celeste’s efforts and well-meaning intended fundraiser continues to cause more grief than good.
Celeste launched a fundraiser on Facebook on January 3, with an original target of $30,000 set up to benefit the NSW Rural Fire Service, (RFS).
The Facebook fundraiser page had very clearly stipulated that the money would go to the Trustee for the RFS and Brigades Donations Fund.
Celeste misled the donors with many left furious after she changed the course of the funds, now ending up in an expensive and lengthy legal battle that the RFS could do without.
We want to make sure that donations made in regard to the Australian Bushfire appeal is distributed timely and all monies donated have been spent by the organisation as promised to the Australian public.
It is important that the royal commission highlights the systemic lack of integrity of overall mismanagement that appears to exist within all charities and in particularly the Red Cross, both internationally and here in Australia.
We urge the commission to look into the following
1. Investigate charities involved in fundraising efforts for the fires and any future emergency funding required for natural disasters, more specifically the length of time to pass monies onto those in need
2. Before Celebrities and Media are able to raise monies for any Natural Disaster, they must lodge their intent to raise funds to the ACNC with the exact details of where the money will be directed, and the time allocated in which the money will be spent
3. The ACNC needs to play a more active role in the administering of funds from the beginning, instead of being reactive to media scorn after the funds have not been distributed in a timely manner or the full amount raised has not been fully distributed. The ACNC must take a more proactive role in auditing all charities of ALL of their books/records and not just a select few. Full transparency is required for the public to have full confidence in donating to charities in the future.
4. A National Disaster / Emergency Fund to be set up for future disaster relief
5. Investigate the systematic mismanagement of monies within the charities - given some of these charities have a repeated history of mismanaging money, to the point that some charities have a global reputation for mismanaging donated monies.
6. Transparency about how much of the money raised will be spent on bushfire victims or how much will be quarantined? Money should be used for bushfires only, not stockpiling money for future emergencies
7. Capping expenditure on administration fees
8. When a charity launches an appeal for a specific emergency, in the interest of full transparency, it must be uploaded to its website, the real-time donations it has received thus far with explicit details of how the money will be spent.
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