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Fundraising law reform: From Anheier’s Civil Society Diamond

to a principled jurisprudence

Authors: Matthew Turnour and Myles McGregor-Lowndes

Working Paper No. 71

August 2019

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The Australian Centre for Philanthropy and Nonprofit Studies (ACPNS)

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© Queensland University of Technology August 2019.

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Contents

Introduction ............................................................................................................................................ 4

The civil society diamond ........................................................................................................................ 4

A jurisprudence developed from the civil society diamond ................................................................... 7

Introduction to the Jurisprudence ...................................................................................................... 7

Association Law ................................................................................................................................... 7

Benefit Law ....................................................................................................................................... 12

Applying the Jurisprudence to reform of fundraising law .................................................................... 13

Introducing problems, paradoxes and puzzles in fundraising law reform ....................................... 13

Problems ........................................................................................................................................... 13

Paradoxes .......................................................................................................................................... 14

Puzzles ............................................................................................................................................... 15

The civil society diamond leads to the three principles ....................................................................... 16

The Equality Principle ........................................................................................................................ 16

Cases that illustrate the need for reform based on the Equality Principle ................................... 16

Applications of the Equality Principle to fundraising law reform in Australia .............................. 17

The Enabling Principle ....................................................................................................................... 18

The Enabling Principle draws from the ideas embedded in Association Law ............................... 18

Applications of the Enabling Principle to fundraising law reform in Australia ............................. 19

The Encouraging Principle ................................................................................................................. 20

The Encouraging Principle draws from the ideas embedded in Benefit Law ............................... 20

Application of the Encouragement Principle to fundraising law in Australia ............................... 21

Federalism ............................................................................................................................................. 24

Conclusion ............................................................................................................................................. 25

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Introduction One of the most enduring contributions of Helmut Anheier’s work is the structural-operational

model that became known as the civil society diamond.1 It flowed from much early research

including the Global Non Profit Information System Project2 which contributed in no small measure

to standardisation of the national measurement of civil society in the United Nations System of

National Accounts (SNA).3 Governments in thirty-three countries have to date committed to the

implementation of the handbook4 and 27 statistical agencies have either completed or are working

on at least one civil society satellite account.5 In 2004 he further developed those ideas in a book.6

The measurement tool set out in the book was utilised for further research in 50 countries between

2003 and 2005. Research using the framework is ongoing.7

In 2010 that mapping was taken as the inspiration for jurisprudence for civil society (‘the

Jurisprudence’). The Jurisprudence was developed from the common law doctrine of charity.8 This

chapter sets out the foundations of that work and then offers an example of how those ideas might

provide a basis for fundraising law reform, with particular reference to Australia.

The chapter has four substantive sections. The first and second sections set out a summary of the

civil society diamond as proposed by Anheier, then an explanation of how the ideas have been

developed into a jurisprudence for civil society. Anheier’s other work informs the discussion but the

focus is contained to the application of the civil society diamond. The third section sets out the

paradoxes, problems and puzzles inherent in fundraising law. Finally, the chapter sets out possible

ways in which the ideas in the diamond, as developed in the Jurisprudence, might provide a basis for

fundraising law reform, taking as the case for analysis and application, Australian fundraising law.

The civil society diamond By the late twentieth century civil society research was plagued by problems of philosophic diversity.

This led to a quest for broad models for theoretical discussion. By the close of the first decade of the

twenty-first century civil society discourse had developed to a point where there were

1 Helmut K. Anheier and Lisa Carlson, with contributions by Volkhart Finn Heinrich and Kumi Naidoo, ‘The Civil Society Diamond: A Primer’ (2001) 1(2) CIVICUS <https://www.civicus.org/view/media/CDMethodologyPrimer2.pdf>. 2 Salamon, Lester and Helmut K. Anheier, The Emerging Nonprofit Sector: An Overview (Manchester University Press, 1996). 3 United Nations, Department of Economic and Social Affairs, Satellite Account on Nonprofit and Related Institutions and Volunteer Work, UN Doc ST/ESA/STAT/SER.F/91/Rev.1 (2018). 4 Ibid. 5 Bernard Enjolras, Lester Salamon, Karl-Henrik Sivesind, and Annette Zimmer, The Third Sector as a Renewable Resource for Europe (Palgrave Macmillan, 2018). 6 Helmut K. Anheier, Civil Society: Measurement, Evaluation, Policy (Earthscan, 2004). 7 See CIVICUS, CSI Reports, CIVICUS <https://www.civicus.org/index.php/media-resources/reports-

publications/151-csi-reports>. 8 Matthew Turnour, Beyond Charity: Outlines of a Jurisprudence for Civil Society (PhD Thesis, Queensland University of Technology, 2009) (“the Jurisprudence”).

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internationally accepted models for this theoretical discussion.9 At the forefront of those

frameworks was the civil society diamond which Anheier had developed. It was particularly

attractive, in part, because it provided a framework where a priori assumptions could be

contested.10 Anheier explained that his goal was to set out a ‘common map’, ‘compass’, and ‘a set of

instruments that could frame and guide the conversation’.11

First, and building on Weisbrod12 and others, at the foundation of Anheier’s framework is a

conception that civil society is a space or sphere of society different from business, government and

family. Anheier’s definition is ‘civil society is the sphere of institutions, organisations and individuals

located between family, the state and the market in which people associate voluntarily to advance

common interests.’13

Second, civil society is a multi-faceted concept.14 Anheier theorised that there are four major areas

of discourse in relation to civil society:

1. Structural; which he stated incorporates ‘…size, composition and sources of support of the

civil society unit under consideration’;

2. Legal and Political Space; which he defined as ‘…the regulatory environment in which civil

society operates’;

3. Impact-Related; which he defined as ‘…the contributions of civil society, generally, or in a

particular field’; and

4. Value-Related; which he defined as ‘…norms and cultural elements’.15

Anheier brings these four quite different dimensions into one theoretical framework by projecting

them into a common ‘property space’. He achieved this using common or almost common units of

measure, namely, numeric assessments of key components of civil society. The stand-out common

measure is percentage, or rating, on a scale of zero to 100. The result is a diamond set out in the

figure below where each dimension is allotted one quadrant.16

9Eg Richard Steinberg, 'Economic Theories of Nonprofit Organisations' in Walter W. Powell and Richard Steinberg (eds), The Nonprofit Sector: A Research Handbook (Yale University Press, 2nd ed, 2006) 117; Salamon and Anheier, (n 2); Lester Salamon, Wojciech Sokolowski, and Megan Haddock, Explaining Civil Society Development. A Social Origins Approach (Johns Hopkins University Press, 2017). 10 In the Jurisprudence at 20 it is noted that South African users of the civil society diamond have criticised the definition of civil society at its foundation as the ‘free market assumptions’ were not accepted by many South Africans; citing Anheier (n 6), 128. 11 Anheier (n 6), 6. 12 Burton A Weisbrod, 'Not-for-Profit Organisation as Providers of Collective Goods' in Burton A Weisbrod (ed), The Voluntary Nonprofit Sector (Lexington Books, 1977) 1. 13 Anheier (n 6), 22. 14 Ibid Foreword, Ch 1. 15 Ibid 32. 16 Reproduced from Anheier (n 6), 45.

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Figure 1 Anheier's civil society diamond

Importantly, in assessing ‘space’, the preferred focus is law.

Third, Anheier asserts that civil society must be viewed at three levels – institution, organisation and

individual. Clarifying the level is integral to clarity in legal analysis, as charitable purposes attach to

organisations. Charities are expressions of organisational purpose.17 The principal area for

regulation of civil society is, then, at the organisational level.

Fourth, Anheier suggests that the preferred indicators of space, measured through law, are

indicators designed to measure the degree of enablement. The indicia Anheier points to are three:

fiscal and other incentives, freedom of association and civil liberties. 18 As freedom of association is a

subset of civil liberties, it was argued in the Jurisprudence that these can be addressed as one group

under the more general head of association.19 Tax expenditures and other fiscal favours amount to

favour over other organisations that do not enjoy the tax incentive. It is a critical distinction,

highlighted in the Jurisprudence, that favour is quite different and distinct from regulating. It is

possible to regulate but not to favour.

17 Anheier (n 6), 23-26; Peter Luxton, The Law of Charities (Oxford University Press, 2001) 5. 18 Anheier (n 6), 41. 19 The Jurisprudence 254 -255.

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A jurisprudence developed from the civil society

diamond

Introduction to the Jurisprudence The development of the Jurisprudence begins by locating common law jurisprudence in the wider

civil society discourse – the discourse from which the civil society diamond is constructed. From that

base an architecture is developed for defining and then regulating the sector as a whole. The civil

society diamond allows for a conception of the space as one with potentially dynamic boundaries.

Drawing inspiration from Foucault’s table20 a jurisprudential space was developed in which the

boundaries between civil society organisations on the one hand, and each of businesses,

government organisations, and families on the other, are in contest. The three indicia to which

Anheier pointed (fiscal and other incentives, freedom of association and civil liberties) are distilled to

two. The foundational dimension measures the degree of enablement. The other measures favour.

The concept of “Regulation” of the sector therefore took on a more nuanced understanding than

that applicable to other sectors. It is an understanding that regulation is for the purpose of enabling

voluntary contributions rather than primarily constraining conduct. As that usually occurred through

associations, this was theorised under the title ‘Association Law’.

The laws by which civil society organisations are favoured because of their contribution to public

benefit were discussed under the title of ‘Benefit law’.

This division, between regulating association and favouring voluntary contributions of public benefit,

is logical when approached in this way. It is a division that follows from the architecture inherent in

the civil society diamond. This division between regulating and favouring is a threshold which must

be crossed to go beyond charity law as a common law concept to a jurisprudence for civil society.21

It is not a division presently evident from within the doctrine of charitable purpose.22 It is also not a

division that is common in tax law. Across the world, once an organisation is recognised as a charity,

the organisation is usually entitled to both income tax exemption and deductible gift recipient status

or the equivalent. Generally no distinction is drawn between entities that ought to be enabled and

those entitled to both tax exemption and tax deductibility.

Association Law Following the civil society diamond in the Jurisprudence it is theorised that civil society organisations

have as their essence charitable purpose (not technically defined) and as their ‘others’ business,

government and family. It follows that while charitable purpose is central to the Jurisprudence it is

not a concept of charitable purpose constrained by the common law technical definition. Rather it is

defined as at the heart of civil society organisations. In the Jurisprudence civil society organisations

are those organisations that manifest:

20 Michel Foucault, The Order of Things (Vintage, 1994) xvii. 21 That the law centres on the charitable trust is pointed to by Luxton as a reason for difficulty in development of the law: Luxton (n 17), 16. 22 This distinction is implicit in Luxton who notes: ‘The result is that all charitable institutions are subject to two sets of laws: those that relate to status and those that relate to structure’: Luxton, (n 17), 16.

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1. Altruism;

2. Benefit for the public; and where

3. Coercion is sufficiently absent for the association to be voluntary.

Altruism was held to be an element of charitable purpose by the majority in the leading case

Pemsel.23 By contrast the purpose of business is principally private profits, that is self-interest.

Between these two positions is an increasing number of expressions of social enterprise that

combine elements of both. It follows that some purposes are more altruistic than others and

consequently that organisations might be ranked or valued according to the extent to which they

manifest altruistic purposes.

Factors that inform altruism, and indicia of altruism capable of quantitative measurement exist so it

is possible to rank altruism quantitatively.24 It follows using the civil society model that it is possible

to reduce the measurement to a percentage or scale of zero to 100 so that a continuum of altruism

emerges.25

Turning now to ‘Benefit’, if many people, who would otherwise be strangers voluntarily associate,

then the association is public. If the purpose of the association is one that leads to public benefit, it is

a public benefiting association. By contrast, if a small number of people associate for private

purposes (such as a family gathering to celebrate Christmas) the association is private and the

benefit is private. A civil society organisation is a public benefiting association. A family is a private

benefiting association.

As with altruism, there is evidence in the literature of methods of grading or ranking publicness, and

objective criteria by which public benefit can be assessed.26 In the Jurisprudence it is stated that the

ranking turns upon the extent to which the purpose is to benefit the public as distinct from the

purpose being private benefit.27

As with the recognition of altruism and public benefit in civil society organisations, the Jurisprudence

suggests that coercion is not one dimensional. It is argued that the absence of coercion can be

theorised also as scaleable between zero and 100. If the association is of a large group of persons

23 The Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531; In Re Delany, Conoley v Quick [1902] 2 Ch 642, 648-9 Farwell J held that ‘Charity is necessarily altruistic and involves the idea of aid or benefit to others; but, given the latter, the motive impelling it is immaterial. 24 United Nations, Department of Economic and Social Affairs Statistics Division, Handbook on Non-Profit Institutions in the System of National Accounts, UN Doc ST/ESA/STAT/SER.F/91 (2003), 69; Rob Atkinson, 'Altruism in Nonprofit Organisations' (1990) 31 Boston College Law Review 501; Roland Benabou and Jean Tirole, 'Intrinsic and Extrinsic Motivation' (2003) 70 Review of Economic Studies 489; J A Piliavin and Hong-Wen Charng, 'Altruism: A Review of Recent Theory and Research' (1990) 16 Annual Review of Sociology 27; Jen-Chieh Ting and Jane Allyn Piliavin, 'Altruism in Comparative International Perspective' in Jim Phillips, Bruce Chapman and David Stevens (eds), Between State and Market: Essays on Charity Law and Policy in Canada (McGill-Queen's University Press, 2001) 51. 25 Anheier (n 6), 32. 26 Burton A Weisbrod, 'Toward a Theory of the Voluntary Nonprofit Sector in a Three-Sector Economy' in Burton A Weisbrod (ed), The Voluntary Nonprofit Sector (Lexington Books, 1977) 51; Atkinson (n 24); John Colombo and Mark Hall, The Charitable Tax Exemption (Taylor & Francis, 1995). 27 Weisbrod (n 26), 51.

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but the reason for association is coerced, then the fundamental character of voluntariness is

missing. The organisation is an arm of government.

The philosophical contests over the extent to which citizens should be permitted to associate free of

the coercive influences of government are such that different parliaments, courts and regulators

may draw upon different factors to determine how much, or how little, communities should be

allowed to self-organise and self-regulate through civil society organisations. Some countries have

constitutionally protected freedom from state coercion for certain associations. Freedom of religion

provisions are the most common. Between these constitutionally protected freedoms and the right

of the state to take and maintain control of an organisation is a continuum of coercion. At some

point the level of coercion is so great that the organisation must be described as an arm of

government and no longer a civil society organisation. There may be debates over whether too

much external regulation might be a threat to the very essence of the sector itself.28 There is no

dispute, though, that there are differences in coercion and it is suggested that coercion similarly can

be ranked or graded on a scale of zero to 100 or as a percentage.

All the continua have charitable purpose as a starting point and charity is differentiated from three

others. Those three others are: business (the first sector); government (the second sector); and

family (the fourth sector). Charities and related organisations are included in the third sector. At

some point on these lines, drawn between organisations with charitable purposes and each of these

others, a boundary is crossed from civil society (as it is defined in the Jurisprudence), to one of these

others.

The three continua, each with charity as a starting point, are projected into a common property

space in the way Anheier developed the civil society diamond. This can be done because each have

charity at the centre, and each has a zero to 100 scale.

28 Michael Power, The Audit Society: Rituals of Verification (Oxford University Press, 1999) 97-98.

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Figure 2 Continua from charity to its others

When drawn in this way, the diagram in Figure 2 emerges. In this diagram the overlapping

conceptions between charity and others, and consequently the boundary of civil society, is even

more apparent. Civil society is differentiated from business by altruism, from family by benefits

being public not private, and from government by its voluntariness, that is, absence of coercion. At a

certain point there is insufficient altruism, public benefit or voluntariness to call the organisation a

civil society organisation. When the concept of a charitable purpose is expanded in the way

proposed in the Jurisprudence, it reaches to the borders of civil society. By joining the lines, a

theoretical space is created which is the bounds of this new jurisprudence for civil society. It is a

jurisprudence that continues to have charitable purpose at its centre but the concept of charity is

not constrained by common law cases. That space in a theoretical sense is illustrated in Figure 3.

Figure 3 Civil society space defined

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The theoretical space will change shape according to the society. This can be illustrated by

considering fundraising. If business and private fundraising is less tightly regulated than fundraising

by charities then the space for civil society fundraising will be reduced. This is illustrated in the

diagram below.

Figure 4 Civil society space reduced

The contests over where these boundaries lie are, though, reducible to three, so far as is relevant to

the development of the Jurisprudence, and its application to fundraising law reform. They are over:

1. the extent to which the purpose is altruistic, which is manifest in the contest over where the

boundary between the space for civil society should end and the space for business should

begin; and

2. whether the association is for private or for public benefit, which is manifest in the contested

boundary between civil society on the one hand and small private groups such as family on

the other; and,

3. freedom, which is manifest in the contest over the boundary between the space for civil

society on the one hand and the extent of government intrusion into that space on the

other.

This body of law which has at its centre the law of charities marks out more than just a space for

association. In practice, it marks the boundaries for regulation of the organisations that constitute

civil society. As presently conceived the regulatory framework is centred on charities. There is

increasing pressure to extend this regulatory framework to other non-profits.29 The Jurisprudence

provides a basis for that.

This body of law that involves enabling and regulating civil society organisations is called Association

Law.

29 Patrick McClure, Greg Hammond, Su McCluskey, Matthew Turnour (22 August 2018) Strengthening for purpose: Australian Charities and Not-for-profits Commission Legislation Review 2018, Australian Government, Department of the Treasury, 90 and Recommendation 24.

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Benefit Law The other limb of the Jurisprudence is that it provides a basis for entitlement to favour.

The Jurisprudence theorises that once there is evidence of voluntariness and altruism, it is public

benefit that justifies favour. As the subject is benefit, for convenience this body of law, of which

entitlement to favour is the object, is called Benefit Law. How, though, to assess public benefit? The

Jurisprudence suggests two ways. Jurists could look either to the extent that the public benefits or

they could look to the nature of the public benefit supplied.

If the nature of the public benefit is adopted as the criterion, then the Jurisprudence suggests three

contexts that give rise to favourable treatment:

1. private goods supplied to a person for the purposes of Dealing with Disadvantage thereby

advancing equality;

2. quasi-public or public goods supplied to people for the purposes of Encouraging Edification

thereby advancing fraternity; and,

3. ligaments binding together the polis (the community as a whole) which Facilitate Freedom to

advance liberty.30

Within the Jurisprudence, favour is afforded to civil society organisations that advance equality,

fraternity or liberty. The good of the polis is the basis for favouring civil society organisations with

purposes that Facilitate Freedom. The benefiting of people is the basis for Encouraging Edification in

civil society organisations. When Dealing with Disadvantage is the basis for favouring a civil society

organisation, it is enough that the public benefit manifests in the supply of a good to a person who is

at a disadvantage. There is no reason, in theory at least, why each of these social goals ought to be

ranked equally and there may be justification for using these different classes for different rankings.

As with the measurement of altruism, benefit and coercion, used to map the space for civil society

so, the concept of public benefit can be treated as dynamic. Entitlement to favour will increase as

evidence of public benefit increases.

30 In this alternative jurisprudence equality, fraternity and liberty are treated as values and diversity is acknowledged. For example, in classical Greek theory, three kinds of equality are recognised: isonomia (equality before the law); isotimia (equal respect for all); and isegoria (equal freedom of speech and political action). In post-enlightenment theory, the three kinds tend to be covered by one of a trilogy of principles (liberty, fraternity, and equality): Peter E Nygh and Peter Butt (eds), Butterworths Concise Australian Legal Dictionary (LexisNexis Butterworths, 2nd ed, 1998) 152. Our limited purpose is to label three ideals. A particular jurisprudential worldview or common law country may give shape and expression to the value in a particular context.

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Applying the Jurisprudence to reform of

fundraising law

Introducing problems, paradoxes and puzzles in fundraising law reform In this section we first set out both the international nature of the problems and yet the need for

context specific reform. We propose a way through this by developing principles from the theory.

We take Australia as the context to show how the principles can be applied to reforming the law of

fundraising. With that broad frame in mind we consider some problems, paradoxes and puzzles.

Problems Across the world fundraising regulation is inconsistent and not always fit for purpose. This is a

problem. It is problem for all entities across all sectors as the internet has internationalised the

‘market’ for funds.

The problem has been compounded by the shifting boundaries between private, charitable and

commercial fundraising. To illustrate this blurring of boundaries take the example of international

internet fundraising for education. The impecunious, but enterprising, poor Chinese student Deng

Linjie raised funds over the internet personally and successfully, for his education at an elite New

York university.31 The education charity where he studied could have fundraised for scholarships for

such students from anywhere in the world over the internet. A business similarly, either of its own

initiative, or on retainer by the university or the student could have fundraised for the same general

purpose. It is common for these different sectors to be differently regulated so fundraisers can move

from the more regulated to the less regulated environment. The problem is further compounded by

changes in policing of charitable fundraising from individuals, to sophisticated ‘self-regulation’

regimes (such as those now operating in the United Kingdom) through to more general regulation by

government agencies. Should fundraising regulation, if it is to be imposed, be imposed upon the

individual, the charity or the commercial operation? These problems are international in nature and

jurisdictions across the world are struggling with how to both facilitate and regulate civil society-

centred fundraising.32

31 Mandy, Zuo, ‘How a struggling Chinese student ‘sold himself’ to attend dream US school’. South China Morning Post (Online) 20 January 2018 <https://www.scmp.com/news/china/society/article/2128573/how-cash-strapped-chinese-student-crowdfunded-his-way-elite-us>. 32 For example, UK: Sir Stuart Etherington, Lord Leigh of Hurley, Baroness Pitkeathley, and Lord Wallace of Saltaire, Regulating fundraising for the future: trust in charities, confidence in fundraising regulation (September 2015) NCVO <https://www.ncvo.org.uk/images/documents/policy_and_research/giving_and_philanthropy/fundraising-review-report-2015.pdf>; USA: Putnam Barber, ‘Regulation of US Charitable Solicitations Since 1954’ (2012) 23(3) Voluntas: International Journal of Voluntary and Nonprofit Organizations, 737; Australia: Senate Economics References Committee, Parliament of Australia, Disclosure regimes for charities and not-for-profit organisations (2008) 95–98; Productivity Commission, Australian Government, Contribution of the Not-for-profit Sector (2010) xxiv; Deloitte Access Economics, Report to Australian Charities and Not-for-profits Commission, Cutting Red Tape: Options to Align State, Territory and Commonwealth Charity Regulation: Final Report (2016) 2; Consumer Affairs Australia and New Zealand, Australian Government, Australian Consumer Law Review: Final Report (2017) 75–76; NZ: Ministry of Business, Innovation and Employment, New Zealand Government, Information Disclosure Regulations for Third-party Fundraisers Making Requests for Charitable

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Law is context specific. So while the problems are international, and the ideas developed here might

be able to be explained in a way that applies universally in theory, law reform must be jurisdiction

specific. To proceed practically, as distinct from theoretically, the law of a particular jurisdiction must

be chosen for reform.

Demands by civil society for fundraising law reform arguably has not been anywhere more vociferously expressed than in Australia. There a recent review found fundraising law reform to be the issue of greatest concern to participants in the NFP sector.33 On 19 June 2018 the Australian Senate established the Select Committee on Charity Fundraising in the 21st Century. The bipartisan committee reported on 14 February 2019 and made only one substantive recommendation. Rejecting, or at least not adopting, the many submissions for extension of commercial law into charitable fundraising the committee unanimously recommended: that the Australian Government commit to working with state and territory governments and the not-for-profit sector to develop a consistent national model for regulating not-for-profit and charitable fundraising activities. It also set a time limit - within a time limit of two years.34 The government has taken up this recommendation. The Assistant Minister for Finance, Charities and Electoral Matters announced on 2 August 2019 ‘harmonising and streamlining [fundraising] regulatory requirements across jurisdictions will be a key focus for this Government’.35 Australia provides, then, a jurisdiction where there is both an articulated priority from the sector and possibly a government and a parliament willing to consider reforms.

In the remainder of this chapter, we step from the high-level theory into granular examples of actual law reform. We do so with the laws of Australia as the context.

Paradoxes Paradoxically instead of the internationalisation of fundraising, the porous boundaries and

increasingly sophisticated regulatory environment leading to a more generalised, principled, and

tailored fundraising regime the opposite has occurred. The situation confronting a charitable

fundraiser in the United States is daunting. There an array of ‘regulators’ from local, state and

federal jurisdictions combine with revenue authorities, accounting bodies and sector supervisors to

create an environment where it is difficult to be confident of compliance without specialized

assistance.36 The Parliament for England and Wales established a specific regulator for fundraising by

charities but did not address the boundary issues.37 Perhaps recognising the increasingly complex

Purposes, Discussion Document (2015) <https://www.mbie.govt.nz/assets/69a13c2016/information-disclosure-regulations-discussion-document.pdf>. 33 McClure et al (n 29), 98. 34 Senate Select Committee, Parliament of Australia, Select Committee on Charity Fundraising in the 21st Century Report (2019) <https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Charity_Fundraising/CharityFundraising/Report>. 35 Senator the Hon Zed Seselja, ‘Address to the Annual ACNC Regulatory Conference’ (Speech delivered at the Annual ACNC Regulatory Conference, Melbourne, 2 August 2019) <https://www.financeminister.gov.au/assistant/speech/address-annual-acnc-regulatory-conference>. 36 Putnam Barber, ‘Regulation of Charitable Solicitations in the United States of America’ (Speech delivered at the Reforming Fundraising Regulation, Queensland University of Technology, Brisbane) 19-20 April 2011, 2, 7 <https://wiki.qut.edu.au/download/attachments/118897665/USA+Barber.pdf?version=1&modificationDate=1301889456000>. 37 Charities (Protection and Social Investment) Act 2016 (UK) c 4.

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boundary problems caused by commercial operators and poor Chinese student like Deng Linjie, that

regulator has said it ‘will assess on a case-by-case basis whether any responsibility can reasonably be

assigned to the charity in respect of the activity concerned’.38 Civil society organisations in common-

law countries, particularly Australia, are subject to an unprincipled application of regulation with

under or over reaches of application to fundraising mischiefs. This overlay might, or might not,

correlate or co-ordinate with commercial and individual fundraising regulation. This has led to an

antiquated hodgepodge of miscellaneous laws targeting particular charitable fundraising ills – ills

which often now have passed or have become regulated more effectively by general criminal or

commerce centred regulation. Examples include the capturing of misleading or fraudulent

fundraising by criminal or consumer protection statutes. A regulatory environment suited to

fundraising in the early twentieth century appears, in the early twenty-first century, illogical and self-

contradictory.

Puzzles It is puzzling why if civil society organisations are more altruistic or if the purpose of the fundraising

is for public benefit, some are more, and others less, regulated in similar situations, than self-

benefiting organisations. Why are Richard Steinberg’s nonprofits and for profits in disguise39 or even

governments in disguise not unmasked by fundraising regulation?

In many jurisdictions fundraising is interwoven with tax and governance. In Australia private

individuals do not lose tax concessions for breaches of fundraising laws so it is puzzling why charities

should. If commercial organisations do not run the risk of the government taking control of their

organisation for breach of fundraising laws, similarly, it is puzzling why charities should be subject to

such a risk of governance loss.40

Perhaps the greatest puzzle is how so much law can be enacted without any clearly articulated

jurisprudential underpinning. Putnam Barber analysed the US legislative regime and its model

legislation and identified ‘three broad areas: Protection of charitable assets; Consumer (or donor)

protection; and Tax policy’ as informing the discourse.41 Three bodies of law were identified as

‘loosely’ drawn from ‘trust law, donor protection, and tax’.42 The reason for the lack of a coherent

jurisprudence seems to be the absence of any clear conceptual base discernible in the initial and

subsequent legislation. The reasons for that is because civil society fundraising law emerged, almost

invariably, as political reaction to a scandal. This seems to be so whether the challenge arose in post-

war New York, where much of the early legislation developed or, as happened in England, in 2016,

where a fundraising regulator was established after tabloids contended that Olive Cooke was

hounded to death by charities seeking money.43 The situation has not been assisted by the courts.

38 About Us, (2019) Fundraising Regulator <https://www.fundraisingregulator.org.uk/more-from-us/about-us>. 39 Richard Steinberg, "Unfair" Competition by Nonprofits and Tax Policy, (1991) 44(3) National Tax Journal, 351. 40 McClure et al (n 29), 34. 41 Barber (n 36), 2. 42 Ibid, 4. 43 ‘Olive Cooke “overwhelmed” by charity requests, report says’, BBC News (online), 20 January 2016. <https://www.bbc.com/news/uk-england-bristol-35359268>; Ian MacQuillin, The sickening spectacle surrounding the death of Olive Cooke (1 June 2015) UK Fundraising <https://fundraising.co.uk/2015/06/01/the-sickening-spectacle-surrounding-the-death-of-olive-

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Cases are decided on a particular set of facts. The case law that developed across the nineteenth and

twentieth centuries has not provided any substantial organising principles. The deeper puzzle, then

is to find and articulate principles that can underpin this developing body of law. It is to that project

that we now turn.

The civil society diamond leads to the three

principles In this section we suggest that three principles emerge from the Jurisprudence to frame the agenda

for fundraising law reform. They are:

1. The Equality Principle;

2. The Enabling Principle; and,

3. The Encouraging Principle.

Across the remainder of this section we explain first the principles and then how they might be

applied to fundraising law reform in Australia.

The Equality Principle The civil society diamond starts from the premise that people should be free to give, and civil society

organisations should be free to ask for donations, as they respectively see fit.

Regulation of giving, and asking, may be appropriate but if there is to be regulation it should be

applied equally to all sectors unless there is justification for difference between sectors or within a

sector. These are fundamental expressions of the rule of law. The application of the principle of

equality from the civil society diamond to fundraising law involves, then, consideration of the extent

to which fundraising is to be regulated generally. This begins with consideration of fundraising in the

business and family sectors and the extent to which government control is appropriate. If there is

not a satisfactory reason for regulating civil society fundraising from other fundraising then it should

be regulated the same. Risk and other factors that usually inform regulatory decisions (not access to

tax concessions) would seem to be the appropriate factors to inform this decision.

Second, application of the Equality Principle means that civil society organisations should be treated

equally unless there is justification for treating some of them differently.

Cases that illustrate the need for reform based on the Equality Principle

A consideration of fundraising across the sectors identifies very significant anomalies in Australia. Set

out below are cases where civil society organisations are treated less favourably, without apparent

justification, than organisations in other sectors.

cooke/#.XUafffZuKUk>; Ian MacQuillin, Opinion: how the Olive Cooke tragedy affects fundraising ethics and self-regulation on Critical Fundraising, Explore with Plymouth University (1 June 2015) <http://blogs.plymouth.ac.uk/criticalfundraising/2015/06/01/opinion-how-the-olive-cooke-tragedy-affects-fundraising-ethics-and-self-regualtion/>.

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Charities in particular, and civil society organisations in general, are at a disadvantage in the area of

crowdfunding as they are usually subject to a fundraising regulator that is state-based, now largely

irrelevant, out of date, inconsistent and compliance-costly. Private individuals are not subject to

that regime. Research conducted in 2018 found 42% of Australians stating that they have given to

‘crowdfunding campaigns that benefit individuals’. Of those, 10% say that this means ‘they give less’

to other organisations because of this response to private crowdfunding options.44

The business community is similarly at an advantage although for different reasons. Concerned that

there was not an adequately enabling environment for commercial fundraising by crowd-funding the

Commonwealth parliament in 2017 enacted legislation to reduce the regulatory requirements for

public fundraising while maintaining appropriate investor protection measures.45

Not only has the commonwealth not acted to enable charitable fund-raising it has further

disadvantaged charitable fundraising in two significant regards. First, a charity could lose both tax

concessions and even its right to self-govern if it breaches governance standards through

fundraising. There is no equivalent punishment for businesses or individuals. A person does not

loose tax exemption status for the first $18,200 of income if they breach any standard by

fundraising, be they acting in their private capacity or as a business. They only risk the loss of tax

exempt status on income if they do so as trustee of a charity. There is no business governance

standards which if breached, by say crowdfunding by a corporation, enabled a regulator to take

control of the corporation. In Australia it is only civil society organisations that are charities that are

subject to these double penalty provisions.

While there may be many other cases this is enough to illustrate a need for reform.

Applications of the Equality Principle to fundraising law reform in Australia

The examples just mentioned suggest ways in which the Equality Principle could be applied to

fundraising law reform.

1. As a general principle the law should apply equally across all sectors. Crowd-funding is

an example of such an area where better regulation might facilitate more giving. If there

are to be specific laws regulating fundraising by civil society organisations, the starting

point should be that laws applying to civil society organisations should not be more

onerous than the laws applying to private individuals or businesses.

2. Where there are to be exceptions they should be justified. The starting premise in

Australia might therefore be that the laws regarding misleading and deceptive conduct

and unconscionability should apply to all sectors including civil society. All subsectors of

civil society should also be included unless there are reasons justifying exemption.

3. The Australian Charities and Not-for-profits Commission (‘ACNC’) Commissioner’s power

to replace the board of charities for fundraising or any other breaches should be

44 2018 Global Trends in Giving Report (2018) Funraise, 19 <https://funraise.org/downloads/tech-report/2018-GivingReport-English.pdf>. 45 The Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) and Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) amends the Corporations Act 2001 (Corporations Act), which makes minor amendments to the Australian Securities and Investments Commission Act 2001 (Cth).

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repealed. This would mean that at most the Commissioner would have the capacity to

ban a person from exercising leadership in a civil society organisation for a specified

period of time such as five years, as could apply in a company law context.

4. The double penalty provisions by which charities lose exemption and deductibility for

breaches of the law as well as punishment for the relevant breach should be removed.

The Enabling Principle

The Enabling Principle draws from the ideas embedded in Association Law

As Association Law defines a space for civil society to function, and defines the regulation applicable

to that space, the second aspect of fundraising reform is to consider the extent to which fundraising

by civil society organisations should be regulated, and how. This is an exploration of fundraising as a

dimension of Association Law.

Fundraising has been an enduring feature of civil society organisations over time, either for money,

in-kind resources or labour. When such organisations do not possess the coercive instruments of

government nor the access to capital markets of the business sector, they rely upon altruism and

this source of resources is critical. Fundraising law generally constrains both giving and asking. A

threshold question should be whether that is the intention of the law. Recent US research suggests

that more regulation may decrease rather than increase donations.46

There is a compelling reason for taking a more enabling view. About two-thirds of Australian

government expenditures take place in contexts where charities are significant players. Historically,

charities provided most of these services before government became a supplier. After greater

government involvement, charities have often become a fee-for-service supplier on behalf of

government. This is the case in areas of social security and welfare, health, education, housing and

community amenities, and recreation and culture. Governments outsource to civil society

organisations, usually charities, for a range of reasons, but it is often perceived as more convenient

for government and cheaper given charities’ ability to harness volunteers and donations.

For charities to step into this greater role there needs to be significant voluntary and donor

engagement through charities. That is, the legislative environment needs to enable not constrain

philanthropic giving.

This application of the Enabling Principle dovetails with the Senate Committee recommendation that

sits comfortably also with the Equality Principle. A whole of sector approach is required if there is to

be enabling of fundraising. Also, though, the Report makes the point that fundraising laws should

apply uniformly across the sector, that is, using the language of this paper, there should be

consideration given to the Equality Principle in the application of the Enabling Principle.

There are also reasons for restraining certain types of fundraising and those reasons are based on

risk. The risks warranting regulation can be divided into three classes (although there could be many

others):

46 Nathan Dietz, Putnam Barber, Cindy Lott, Mary Shelly, ‘Exploring the Relationship between State Charitable Solicitation Regulations and Fundraising Performance’ (2017) 8(2) Nonprofit Policy Forum, 183, 185.

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Risk of intrusion or offence;

Risk of deception or unconscionability; and,

Risk of misapplication of funds once raised.

The risk of intrusion or offence is an intrusion from the public space into the private and affects

where the boundary is to be drawn between civil society and private spaces. This could be a dynamic

boundary. If funds are not raised from the public, but say from members of a civil society

organisation, there is less justification for regulation. Most religious giving, for example, is from

persons associated with the religion.

What though of fundraising from the public? There is an argument that can be made that the greater

the contribution to public benefit of the purpose the greater the right to intrude that can be

justified. For example, fundraisers for ambulance services that might need to be used by anyone,

might be allowed to telephone numbers on the do-not-call register while fundraisers for a sailing

club might not. Face-to-face fundraising sometimes pejoratively called ‘chugging’,47 might be

permitted in busy malls for cancer research but not for choral concerts.

Risk of deception or unconscionability; and, risk of misapplication of funds once raised are two sides

of the coin of altruism. Fundraising that is deceptive or unconscionable is not altruistic to the

requisite extent and warrants redrawing boundaries against freedoms. The starting point would

seem to be why the law in relation to civil society fundraising should not be the same as that for

business or private. In other sectors the law has navigated the balance between fundraisers and

contributor rights including in complex areas such as:

the extent to which the funders themselves should take primary responsibility for

management of the risk of misapplication of funds;

whether because of the vulnerability of the ultimate beneficiaries or for some other reason

they are unable to hold fundraisers accountable; and,

the extent to which, if at all, funds are raised from the general public.

Applications of the Enabling Principle to fundraising law reform in Australia

From the discussion above it is possible to set out seven applications of the Enabling Principle to

fundraising law reform in Australia.

1. As a general principle there should be removal of barriers to asking for donations and

giving should be a priority. The free flow of resources to civil society organisations

should be valued. Removing these barriers could include the repeal of the now largely

irrelevant, unenforced, out of date, inconsistent and compliance-costly state,

Commonwealth, and local government fundraising laws that are targeted specifically at

civil society organisations such as charities.

2. The Enabling Principle, interpreted within the Equality Principle, should also be applied

beyond the sector to all sectors. The general law regarding misleading and deceptive

conduct and unconscionability could be applied beyond the commercial and private

47 ‘Charity mugging’, a popular term for street solicitation.

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spheres to civil society fundraising. The altruism boundary could be reset to exclude

from the space where there is freedom to fundraise, conduct which is misleading,

deceptive or unconscionable, in a way similar to the laws applying to business.

3. Taking note of the Senate Inquiry recommendation there is a need for consistency of law

for all civil society organisations in whatever state of Australia they may be located; that

is a whole of sector approach. This is the Principle of Enabling interpreted within the

Principle of Equality within the sector.

4. There is a need to find balance between freedoms and responsibility in fundraising.

Anomalies should also be resolved. In finding this balance the distinction between funds

raised from the public and funds not raised from the public may be important.

5. The ACNC Commissioner’s power to replace the board of charities for fundraising or any

other breaches should be repealed. It would mean that at most the Commissioner would

have the capacity to ban a person from exercising leadership in a civil society

organisation for a specified period of time such as five years, as would apply in a

commercial context.

6. Removal of the double penalty provisions by which charities lose exemption and

deductibility for breaches of the law as well as punishment for the relevant breach.

7. The privacy boundary could be elastic according to purposes. This is discussed more in

the next section on the Encouraging Principle.

The Encouraging Principle

The Encouraging Principle draws from the ideas embedded in Benefit Law

As Benefit Law has as its purpose the encouraging of philanthropy in a targeted way, this section sets

out how that might be more effectively achieved by fundraising law reform in Australia. As the

Jurisprudence argued that there is no reason, in theory at least, different social goals should not be

ranked differently, this section explores that possibility.

The starting point is a concept of public benefit. The greater the contribution to public benefit the

greater the justification for favours. In the context of the Jurisprudence, public benefit is a dynamic,

scalable concept. The Jurisprudence explains that it is possible to either rank organisations or rank

purposes according to the extent to which they contribute to public benefit.

For two reasons we suggest that only purposes, not organisations, be ranked in fundraising reform in

Australia. First, the common law focuses on purposes and it has shaped the present law. To move

from that will be difficult in the short to medium term in Australia. Second, fundraising is a subject

which is readily divisible into categories. Civil society organisations raise funds for a purpose: The

provision of ambulance services or cancer research or their children’s school or environmental

causes. The Jurisprudence segments civil society organisations into three classes based on purposes

that will be particularly useful in this context.

It was said that within the Jurisprudence, favour is afforded to civil society organisations that

voluntarily provide public goods that advance equality, fraternity or liberty.

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The good of the polis is the basis for favouring civil society organisations with purposes that

Facilitate Freedom. These groups are essentially civil society organisations that enable people to

gather in community and upon which ‘rest the superstructure of social order.’48 They are the groups

that are ‘necessary to the advancement of civilisation and the promotion of the welfare of society’.49

Historically associated with religious organisations, but now much more widely identified, these

groups are usually entitled to income tax exemption in Australia, but not more.

By contrast both exemption and Deducible Gift Recipient (DGR) status are almost invariably

extended to organisations that Deal with Disadvantage. It will be recalled that the purposes of these

organisations are almost always direct, visible, tangible assistance or preventative of the need for

such assistance. This is so whether they are welfare organisations, volunteer emergency services,

cancer research or some other way of helping people in a disadvantaged position. The basis for

favouring a civil society organisation is usually this direct, visible, tangible assistance or prevention of

the need for such assistance. In these cases, it is enough that the public benefit manifests in the

supply of a good to a person who is at a disadvantage.

Between these two cases lies a middle ground. That middle ground is where the benefiting of people

is by the supply of quasi-public goods. This is the class comprising schools, museums, art galleries

and public benefiting community groups. It is called in the Jurisprudence Encouraging Edification.

Perhaps unsurprisingly the class is something of a tax hodgepodge in Australia. All such organisations

enjoy tax exemption but not all enjoy DGR status. DGR status is complicated for this class. If we take

schools as an example, schools are only exempt. Donations to building funds, scholarships and

religious education in schools, however are all deductible.

Application of the Encouragement Principle to fundraising law in Australia

Benefit Law favours can be applied in a more sophisticated way so that there be greater

discrimination between fundraising purposes and tax status. This would lead to amendment to

taxation legislation so that there were:

1. at least three different classes of purposes referrable to clear principles of categorisation;

and,

2. different forms or rates of tax concessions available to each.

That could mean that applying the Encouraging Principle of fundraising in the context of income tax

arrangements in Australia, or for that matter elsewhere would be a two-step process. First, there

would need to be a classification of purposes into classes. We have suggested three; (1) those which

Deal with Disadvantage to facilitate equality; (2) those which Encourage Edification to facilitate

fraternity and (3) those which Facilitate Freedom to facilitate liberty. We suggest that all purposes

are divisible into one of these classes. That there may be overlap is acknowledged.

The second step is to allocate an income tax status to these. We suggest, for the purposes of

discussion, that fundraising:

48 Holland v Peck (1842) 37 NC 255, 258. 49 People ex rel Seminary of Our Lady of Angels v Barber (1886) 3 NY St Rep 367 affirmed in (1887) 13 NE 936.

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for Dealing with Disadvantage be entitled to tax deductibility at the same level as

deductibility for research and development in a business context, namely 125%;

for Enabling Edification be at 100%; and

for Facilitating Freedom remain non-deductible (although it could be granted say 50%

deductibility).

We suggest this because it helps explain some public policy challenges. In most common-law

jurisdictions all charities, regardless of their public contribution are treated equally for tax purposes.

As a matter of public policy, it can be difficult to argue that the tax favours extended to a civil society

organisation like a church, should be equal to those extended to a volunteer ambulance, fire

brigade or other emergency service; at least where there is unsatisfied need for such emergency

services. This is because if the emergency service is not provided voluntarily the state will almost

certainly have to do so but that is unlikely to be the case for public worship, at least in most

jurisdictions.

The Jurisprudence classifications offer a rational basis for reconceptualising favours given to civil

society organisations through taxation. It is on the basis that the more the state wishes to encourage

the pursuit by civil society of particular purposes the more it may incentivise this through taxation.

There is no reason, in principle, why DGR status need to be always set at either zero or 100% as is

the case under the Australian income tax laws. Singapore has demonstrated that deductibility from

taxable income for donations to civil society organisations can be offered at 350% or 250%.50 If that

is so then DGR status at 50%, or the R&D concession rate of 125% or some other amount is possible

and may be desirable in certain circumstances in Australia. For example, homelessness has been

stated as a priority in several more recent Commonwealth budgets. If a Singaporean approach was

taken to tax rates in Australia to reflect this priority then donations to civil society organisations

addressing homelessness would attract greater tax incentives than donations to museums, say 125%

instead of 100% for Museums.

There is no reason in theory why there cannot be a continuum of tax deductibility. Singapore has

shown that it can be done in practice. The Jurisprudence provides three broad categories for this and

the figure below provides an illustration of how it might be applied.

0 50% 75% 100% 125% 250% 350%

50 Singapore Government, Deductions for Individuals (Reliefs, Expenses, Donations) (2 August 2019) Inland Revenue Authority of Singapore <https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Deductions-for-Individuals--Reliefs--Expenses--Donations-/#title4>.

Organisations

Facilitating

Freedom

Organisations

Encouraging

Edification

Organisations

Dealing with Disadvantage

Figure 5 Tax differentials

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Applying this framework also helps to explain but not resolve controversy surrounding tax,

particularly DGR status. In Australia one of the most controversial has been tax deductibility for

donations to civil society organisations engaged solely in political lobbying for environmental causes.

Those organisations enjoy (uncapped) DGR status when most other organisations in Australia do not.

Environmental lobbying is, then, given tax priority over donations to schools, public benefiting

community groups (such as Rotary, Apex or Lions) and donations for most charitable counselling

services.

If climate change is, as the former Prime Minister, Kevin Rudd saw it, “the greatest moral, economic

and social challenge of our time”51 this tax status is understandable. If responses to climate change

are, as another former Prime Minister, John Howard, described it, akin to religion52 then

organisations pursuing such purposes should be entitled to exemption only, like religious

organisations, but not deductibility. If the science behind climate change is, as yet another former

Australian Prime Minister, Tony Abbott, described it, "absolute crap"53 then there is not any basis for

entitlement even to income tax exemption for organisations pursuing such purposes. The

Jurisprudence does not purport to resolve the public benefit problem, illustrated here. Rather, like

the civil society diamond it provides a framework where a priori assumptions can be contested.

Applying this framework also highlights the inconsistent treatment of political parties and suggests

pathways to reform. Political parties in Australia are from a tax perspective in an adverse position

vis-a-vis environmental groups with DGR status engaged in political activities. Political parties are not

entitled to income tax exemption. Deductibility for donations to political parties are capped at

$1,000. Environmental groups with DGR status engaged in political activities are not subject to either

of these constraints. Application of the Encouragement Principle to fundraising law in Australia

suggest that all entities pursuing the same purposes should enjoy the same encouragement.

In the political space there is another inconsistent treatment of political parties that should be

mentioned before closing the chapter. There is not any restraint on freedom of political speech by

political parties or candidates. They may lie, mislead or deceive in a way that businesses cannot.54

For so long as there is exemption of political parties from these laws there remains an argument that

civil society organisations should similarly be exempt. This is because the Equality Principle, the

Enabling Principle and the Encouraging Principle all support removal of inconsistencies in regulatory

burdens where there is no justification. It follows that unless there is an articulated distinction

between political parties and other ostensibly similar civil society organisations political parties

51 Graham Readfearn, ‘Can Kevin Rudd protect Australia's climate change credibility?’ The Guardian (online), 27 June 2013 <https://www.theguardian.com/environment/planet-oz/2013/jun/26/kevin-rudd-australia-climate-change>; Meet Kevin, Kevin Rudd <http://kevinrudd.com/kevin/>. 52 John Howard, ‘One Religion is Enough’ (Speech delivered at The Global Warming Policy Forum, London, 5 November 2013) <https://www.thegwpf.com/john-howard-religion/>. 53 Tony Abbott, ‘Daring to Doubt’ (Speech delivered at The Global Warming Policy Forum, London, 9 October 2017) <https://www.thegwpf.org/tony-abbott-daring-to-doubt/>. 54 For application to charities see Guide to the ACL for Charities, Not-for-profits & Fundraisers (18 December 2017) Australian Competition and Consumer Commission <https://www.accc.gov.au/publications/guide-to-the-acl-for-charities-not-for-profits-fundraisers>.

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should be treated equally with other civil society organisations within the regulatory framework.

That is, they should not only enjoy the same tax status and other forms of encouragement but

should also be subject to the same regulatory and enabling environment.

The Encouragement Principle could lead to steps being taken, though, to ameliorate adverse

consequences for freedom of speech (or other civic engagement) of the equal application of a

regulatory regime. This is because political parties, charities and other civil society organisations play

an important role in the discourse that underpins democracies. While a commercial enterprises

might quite properly be liable for the damages that flow from misleading and deceptive conduct, or

unconscionable conduct, it does not follow that damages should be imposed upon civil society

organisations of any kind, including political parties. Some sort of injunctive relief or equivalent

might be sufficient. If a positive action were required the civil society organisation might be required

to publish a correction. The goal would always remain to ensure equal treatment, enable giving and

voluntary and also, in appropriate cases encourage the pursuit of proposes that lead to public

benefit. If that meant constraining by law the remedies available against a civil society organisation

for breaches then this might be an appropriate response.

Federalism Neither the civil society diamond nor the Jurisprudence tackle the issues of federalism. Australia has

three levels of government and so this is a critical issue. Ideally in an Australian context, there would

be a referral of powers from all of the states to the Commonwealth for a national scheme to emerge

similar to that applying to corporations. Ideally that national scheme would provide a rubric of

fundraising law that dovetails with related laws applying to fundraising in other sectors. In so far as it

related only to fundraising by civil society organisations the national scheme would apply the three

principles enunciated in this chapter. This national scheme would be focussed on enabling rather

than constraining fundraising over the internet (including crowdfunding) but would also regulate for

specific risks, including those mentioned in this chapter. If undertaken comprehensively this national

scheme is likely to over-ride, or render otiose, all state-based regulation.

Local government regulations, particularly regulations applying to face-to-face fundraising would

remain. A compelling case can be made that nuisance and other laws dealing with face-to-face

fundraising are best managed by local authorities (only). There would then be a general law applying

nationally with local authorities continuing to supervise activity within their jurisdiction but no state-

based regulation.

Development of a national scheme for fundraising has been stalled because the Commonwealth

does not have any legislative power specifically to regulate the not-for-profit sector.55 Significant

steps toward a comprehensive national scheme that covers the field, with the exception of the

limited local authority role, might be able to be made, by the Australian parliament revisiting the

scope of section 51(v) of the Australian Constitution. That section authorises the Commonwealth to

make laws with respect to ‘postal, telegraphic, telephonic, and other like services’. The High Court

55 Revised Explanatory Memorandum, Australian Charities and Not-for-profits Bill 23 [2.2].

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has held that ‘other like services’ include radio and television broadcasting.56 The Commonwealth

has relied upon the power to support regulation of aspects of the internet.57 It has also used it to

regulate aspects of the charitable dimensions of the sector.58 It seems at least arguable, therefore,

that the Commonwealth could rely upon section 51(v) to enact some fundraising legislation applying

to civil society organisations. That legislation might cover fundraising over the internet, radio and

television broadcasting, and fundraising by postal, telegraphic and telephonic means. While those

areas do not cover the field entirely, they arguably are where most public fundraising occurs and

where there is greatest risk. Face-to-face fundraising might not be caught but we have suggested

this could remain with local authorities. In the areas of greatest concern, a less than completely

comprehensive national scheme might be possible by this more limited route.59

Conclusion This chapter has shown that it is possible to develop a coherent principled jurisprudence from

Anheier’s civil society diamond. The Jurisprudence develops from concepts fundamental to the rule

of law and has two dimensions, Association Law and Benefit Law. Three principles emerge for

application within these two dimensions of the Jurisprudence: the Equality Principle, the Enabling

Principle and the Encouraging Principle. This chapter has set out how those principles could be

applied in a practical way to the regulation of fundraising. It has done so taking Australian law as an

example to demonstrate in a very specific way what reform could encompass. The application of the

principles might find very different expression in other jurisdictions with a different constitutional

and regulatory environment. That this could be so, even in a jurisprudential context, is testament to

the enduring flexibility drawn from Helmet Anheier’s seminal contribution of the civil society

diamond.

56 R v Brislan; Ex parte Williams (1935) 54 CLR 262; Jones v Commonwealth [No 2] (1965) 112 CLR 206; See, eg, Interactive Gambling Act 2001 (Cth) and Australian Charities and Not-for-profits Act 2012 (Cth). 57 Interactive Gambling Act 2001 (Cth) 58 Revised Explanatory Memorandum, Australian Charities and Not-for-profits Bill 24 [2.6]. 59 The authors acknowledge Greg Hammond as the progenitor of this idea. For a discussion of the limits of the section 51(v) of the Australian Constitution in regulating civil society see: Nicholas Aroney and Matthew Turnour, ‘Charities Are the New Constitutional Law Frontier’ (2017) 41(2) Melbourne University Law Review 446.