ACNC Commissioner, the Hon Dr Gary Johns, in a column for the Australian Financial Review, writes about the challenges charities face managing the donations they received in support of the bushfire relief efforts. We have reproduced the column here.

Charity plus probity is tough gig

Most businesses would struggle to cope with the extraordinary amounts of cash, in-kind, and volunteers that have poured into numerous Australian charities following the bushfires in January.

Giving in cash is easy enough, handing it out, and deploying a volunteer workforce, takes a great deal of skill and know how.

The scale of the disaster this year is hard to grasp. One hundred and 10 evacuation and recovery centres were established – 26 centres were set up following the Victorian Black Saturday bushfires.

Sixty-one-thousand people registered their details with the Australian Red Cross so family and friends could find them.

Co-ordination between multiple agencies, charities, utilities, state and Commonwealth governments is key. All are using good information systems, including old-fashioned whiteboards, as well as modern apps and mapping systems. Many charities are in the field. Typically, St Vinnie’s supplies the food and blankets, the Salvos the shelter, the Red Cross supplies emergency payments and navigates the system, Lifeline the counselling, and many more.

The magnitude of monies is phenomenal. The Red Cross established the annual disaster relief fund in July 2019 (note disaster relief, not only bushfires). To December 30, $7 million was donated to the fund. A New Year’s Eve event raised $13 million. The Red Cross has not undertaken any campaigns since New Year’s Eve, yet the fund is now approaching $150 million, and has a 13-person team accounting for the new money.

In a normal year, the NSW Wildlife Information, Rescue and Education Service Inc (WIRES) income is $3 million. After Christmas WIRES received $60 million in donations in a few weeks.

Ordinarily, WIRES receives 150,000 calls a year, which results in more than 95,000 animal rescues. The general inquiries line increased from 2000 calls to 16,000 calls in the first two weeks of January. During January the website traffic increased from 34,000 unique visitors in January 2019 to 3.3 million.

The WIRES website received 342,000 online donations and there were 167,000 PayPal donations in the first two weeks of January. The top 15 email accounts in WIRES received 600,000 emails in January compared with 30,000 in January 2019.

Charities have to make a call on the best allocation of funds. Who, how much, when and for what purpose. WIRES immediately established a national grants program to assist wildlife carers and vets. The Red Cross has appointed an independent panel to make decisions on allocations, which includes the chairman of the Black Saturday panel.

The Red Cross experience of the Victorian Black Saturday bushfires is that they were still on the ground after five years. This time around they have copped flak for their decisions. Following adverse, and some inaccurate, publicity on disbursements the Red Cross received scores of foul calls and emails. Staff were in tears, and much time was lost.

And then there are the volunteers. Untrained volunteers can be at risk, or do harm. There are 17,000 active volunteers to the Red Cross who need to be trained, certified and managed. Another 6000 volunteered after the bushfires began. The safety and security of communities and volunteers and the speed and adequacy of responses have to be balanced.

In the case of burned wildlife the balance was especially difficult. WIRES would normally work with agencies such as the National Parks and Wildlife Service and NSW Department of Primary Industries but their people were deployed in the active fire grounds and unavailable to assist.

Many volunteers were evacuated or in the fire path and lost their homes and animals. Volunteer requests increased with more than 1000 added in January, many expecting instant authorisation as a WIRES member to enter fire grounds and search for animals.

The last thing anybody would expect in a crisis is fraud. Unfortunately, it is a fact of life. The Red Cross has had to devote resources to combat fraud. Electronic bots are trawling their systems trying to grab emergency relief funds. One driver’s licence number was used more than 36 times in fraudulent attempts to access funding. Companies are advising the Red Cross and WIRES on countering fraud in document presentation.

There are lessons that the Australian Charities and Not-for-profits Commission is gathering for the Commonwealth for future disasters. They include, the need for separate accounting for disaster funds, the extraordinary burdens of managing large, often overseas-source donations, the difficulties of accounting for third-party fundraising, the need to educate the public on the legal requirements of charitable trusts, and the need to track the collective impact of funds.

The ACNC has the power to audit or review charities at any time. Knowing that, donors should trust registered charities to get on with their work.

See the column as published by the Australian Financial Review.