Inanis Caritate

Subject matter – Surf Life Saving Australia (SLSA). Consolidated revenues of $72m.

As one experienced lifesaver said “the SLSA is top heavy with management and  too little of the money raised by the national body makes its way down to the grass roots … if anyone knew what was going on they would go down to their local club and donate money straight to the club.”

Nowadays you can’t even get off a plane at Brisbane airport, a long way from any beach with surf, without some kid hitting you up for a donation to SLSA. I always tell them to bugger off.

Although it is a charitable organisation, much of the money bludged off the unwitting public ends up in the pockets of head office staff via salaries and expenses. Much of the rest goes into marketing.

As it stands a charity must have these features:

• be a not-for-profit
• have a charitable purpose
• be for the public benefit or for the the relief of poverty
• must have convinced the Australian Charities and Not-for-profits Commission of the above three points

And the benefits of charity status are:

• charity tax concessions:
  • company income tax exemption
  • goods and services tax (GST) charity concessions
  • fringe benefits tax (FBT) concessions
• deductible gift recipient status

It’s no mystery that charities now attract the most horrendous rent seekers in this land of rent seekers.

Think of the SLSA. Previously a small head office coordinating sporting events for surf life saving clubs, it is now a mini-corporation serving it’s own needs first but saying and believing the opposite.

It’s not much better than your local happy clapping church with the evil pastor raking it in.

How did this happen?

Essentially charities are soft targets for the lazy and greedy. It’s pretty easy for the ruthless to sidle on in and take control and then argue for expansion via marketing and increased charitable donations.

Because of the increasing abuse of this sector by the inherently greedy I would argue for a few changes: I would get rid of all tax concessions (even for donations) and just leave with them the ability to carry over profits without being taxed.

Indeed I also think there should be a new class of limited liability company; one that also has the ability to carry over profits without being taxed, with a quid pro quo that it doesn’t have the ability to pay dividends. Shares would have to be 100% owned by Australian entities or individuals and there would be a 50% capital gains on the proceeds of selling shares.

That option would entice the rent seekers out of the charities and into this new category of companies. It’d be too attractive for them to resist especially if all those benefits were taken off the charitable organizations.