On behalf of Michael Woodhouse, I move that the Fair Trading (Soliciting on behalf of Charities) Amendment Bill be now read a second time.
I want to begin by thanking the Hon Amy Adams for bringing this important issue to the attention of the House and congratulate her for the effort she has put in to what is such an important cause and worthwhile Bill.
It is my pleasure to have this Bill transferred into my name and I am pleased to be able to contribute to such an important piece of legislation.
It is important that the public have faith that their donations to charities are going to the charities.
I want to increase public confidence in charitable appeals.
I want to improve transparency and accountability for those who work with charities.
And I want to discourage third party collectors from charging charities exorbitant fees for their services.
This Bill seeks to restore confidence in the charitable giving sector.
The purpose of the bill is to increase the transparency and public accountability of third-party businesses that collect funds on behalf of registered charities.
There is a concern that a disproportionate percentage of donated money may be retained by the third-party collectors to cover “costs”, and that the members of the public making the donations are not aware of this.
The Bill purposely does not seek to address the issue of consumer confidence involving charities’ internal use of funds. This is not where the concern lies, and indeed donors are free to decide on the basis of information about a charity’s objects whether it is worthy of their philanthropy. What isn’t available is the degree to which donations made are having the “ticket clipped” so to speak, by collections agents, and the proportion of the donation being retained by them.
By way of example I am aware of a recent news release highlighting a group collecting on behalf of two very well-regarded charities where under that organisation’s retention model the full first year of a donor’s regular monthly donation is retained by the collection agent. I believe the public have a right to know more about those arrangements in order to make an informed decision about whether, where and how much one is prepared to donate.
Concern also exits around the professional telemarketing firms and the so-called “chuggers”, or “charity muggers”, who approach and occasionally hassle passers-by on the street to donate to a charity.
I have spent many hours volunteering to collect money on the street for charities like Arthritis New Zealand, my Rotary Club and other worthwhile charities. I’m sure many of my colleagues in the House today have done the same.
I am pleased to be able to contribute in this way to the fantastic work that our charities do.
However, through forcing disclosure of improper practices, I am hopeful that worthwhile fundraising campaigns will not suffer from growing public concern about how much of the money donated actually gets to those it is intended for.
I would like to thank the Commerce Committee of the 49th Parliament under the Chairmanship of the Hon Lianne Dalziel for their hard work and recommendations to ensure this Bill achieves its intention.
The committee received and considered 25 submissions on this Bill from interested groups and individuals.
One of these submissions was from Arthritis New Zealand, who along with a number of other submitters, generally support the aim of this Bill.
In their submission, Arthritis New Zealand stated that as a charity, they had been concerned by media reports on the lack of transparency in the collection and use of money by some charities.
They said, and I quote, “our experience is that these reports make the donating public extremely nervous and this impinges on our good name and that of others”.
Well, they are absolutely right. The lack of transparency around third-parties has caused public concern towards donating to charities.
The Commerce Committee recommended the bill be changed so the new rules will be delivered through regulations, rather than by amending the primary legislation as originally intended.
The first version of the bill added provisions to the Fair Trading Act to prescribe what can or can’t be done when soliciting on behalf of charities.
It proposed amendments to the unfair practices part of the Fair Trading Act 1986 that would require disclosure by collectors, in particular by providing that when a third-party collector retains more than 20 per cent of the funds raised; this fact must be disclosed to the public.
The bill also provided that where the retained portion is greater than 50 per cent, the percentage portion must be disclosed proactively.
The committee concluded that the complexities involved could not be dealt with in primary legislation and that there is no simple universal solution.
The bill has been changed to instead provide for a regulation-making power. This gives more flexibility to make the changes work. I thank those officials who support the Committee through the submissions and deliberation process, and also those involved in redrafting the Bill to give effect to the Committee’s recommendations.
The select committee’s recommendations uphold the purpose of the Bill in its original form in that it they will create transparency and ensure that the public are in fact aware of where their donations are going and just how much is going to the charity.
I welcome the Commerce Committee’s recommendations and I commend this Bill to the House.