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Response to Review of the SA Associations Incorporation Act

The Associations Incorporation Act is the governing legislation for many community organisations in South Australia. While a review of the Act was long overdue, the SACOSS response to proposed draft amendments to the Act argues that there was a need for greater consultation or co-design in the review, and that contrary to the stated intention, some of the proposed amendments would increase red-tape or threaten the autonomy of the sector.

Download: SACOSS response to the Proposed Amendments to the Associations Incorporation Act

One of the issues that arose in the SACOSS submission, and in subsequent discussion with the Consumer and Business Services, was whether Associations should be required to have members. In an informal further submission, SACOSS acknowledged that in many cases organisations without members were not appropriate if there was no real legal “association”, but went on to argue for the possibility of associations without members as follows:

The perceived importance of membership rests on a number of assumptions,

  • That people can only “associate” as members
  • That associations should be democratic, and
  • That democracy is achieved by members with voting rights.

The examples below challenge the first assumption, while the latter two are arguable. If people chose to join an organisation that is not democratic, should the government stop them or withhold incorporation from that organisation? Further, the third assumption does not necessarily follow from the second. Democracy as a function of members voting (usually only once a year at best) is a fairly shallow form of democracy, and membership may hinder other processes of participation. Either way, the better governance and regulatory questions around associations are not about democracy, but whether the organisation has a legal presence, a clear management structure and a level of transparency and accountability. These can all be achieved without membership.

The following are a couple of examples of associations without members where I believe the association is legitimate, transparent and accountable.

One example would be the Performance & Art Development Agency (PADA), who I helped develop a constitution to ensure that they were accountable to the artistic community they worked with, rather than simply a narrow subset of people paying nominal membership fees. PADA was established by two well-known artistic directors in South Australia, received government funding and was accountable for that, and contracted a range of artists to develop works. This was their community of interest, and the constitution allowed those artists they had worked with to elect the management committee. I am not sure what PADA is doing now, but their model of an organisation accountable to the community of engaged stakeholders was innovative, democratic and did not need formal members – indeed,  establishing membership may have undermined that participatory structure.

Another example may be where organisations have a substantial presence and activity, and extensive fundraising and supporter lists, but no or a small membership. The accountability to their stakeholders is in some senses a market one – if people don’t like what they do, they don’t donate money, or conversely, when the organisation is reacting to its supporters’ concerns, they raise funds more easily to work in those areas. Many years ago this was the model adopted by Greenpeace and a number of the community organisations pioneering database-based fundraising. In these circumstances it is not clear why the supporters who are crucial to the organisation’s existence are out-ranked in governance terms by a group of people who contributed less but signed a membership paper. While the example is old, the structures have probably evolved so that people’s affiliation with an organisation like GetUp! for instance, is via their activity and support – not membership. In this context, the requirement to sign-up members is arguably old-fashioned. Again, there does need to be some structure with a real and legal presence, and a legally accountable management structure,  but it is not clear that this should require membership in the old-style.

A third example may be associations with structures more akin to trusts, where a management committee is established and replaces committee members as they leave. In these circumstances, the organisations are real, appropriately and legally managed, and in circumstances where they are government-funded they are accountable for that funding and not in need of members to run or to fulfil their mission. Presumably these management committee members could become members of the organisation to satisfy some legal requirement, but that complicates governance and succession processes. I know of at least one government-funded arts body with this model, and again, it is similar to a trustee model except that there is incorporation to provide the convenience of legal personhood and protection.

All the organisations in the examples above are real organisations, with clear governance structures and transparency. In some cases they are more participatory and democratic than organisations with formal memberships. Moreover, their purposes meet the eligibility requirements for incorporation and all are not-for-profit entities so that incorporation as cooperatives or businesses would not be appropriate. They should be able to incorporate under the Associations Incorporation Act.

Author: Greg Ogle


Published Date: 
Wednesday, 23 June 2021