Charities can't afford to gamble on pokies

The RSL was born between the great wars when the ebbing tide of national purpose exposed the human wreckage left behind. It provided a meeting place for people who'd been through the horror and could understand, a place where the toast to the fallen every evening was more than empty rhetoric.

The RSL was a mass movement, perhaps the largest community organisation ever conceived in Australia. To a surprisingly large extent, it was the community. In 1945, about one Australian man in every three had served in the forces in some capacity.

When they met together, they needed lots of land and lots of buildings and a branch in every suburb and country town, and they had no problem finding the money for them.

After that, though, the ones who were left did grow old. There were no more mass armies and few new recruits. In Australia today, one man in 500 is in the armed forces (and one woman in 2000), and perhaps one man in 100 has served.

The point of being a not-for-profit is that you're supposed to know what your point is and stick to it against all distractions and temptations.

Those buildings hang loose around their shoulders. To fill them the RSL has had to water down its membership to the point where only one member in seven has served; to fund them they've turned to poker machines.

In Victoria, a group of younger veterans are making a push to change the RSL's business model, arguing, according to a recent Nine newspapers article that "young veterans were either not interested in the clubs, or were struggling with post-service mental health issues, and were prone to problem gambling. This made the presence of pokies in many RSL clubs a welfare problem.

The problem - and it's by no means confined to the RSL - is that you begin with an ideal, build an institution to house it, and end up working for the institution rather than the ideal. Any not-for-profit organisation faces that temptation at every board meeting.

And that's not the worst of your problems, either. As the original ideals become muffled under layers of administrative convenience there's a tendency for the people at the top to see their task less as a sacred charge and more as a chore for which they deserve compensation.

A former Victorian state president who was given his company car as a gift told the ABC, "When you think of the contribution that was made by myself over 15 years, and the hours that were put in which were mostly unpaid ... and it was seen by the people that made the offer for the gifting to be an appropriate recognition for what I had done."

A former NSW state president made that look comparatively restrained by spending $475,000 on his official RSL credit card between 2009 and 2014. It's a general pattern: in South Australia, Queensland, NSW and Victoria the Australian Charities and Not-for-profits Commission (ACNC) has had to pull RSL governing bodies into line and remind them that it's not the board's money.

None of that would raise an eyebrow in corporate circles, of course, but that's the point; if you're a business you work under different standards to different ends.

If you're a not-for-profit board that thinks it's entitled to all the perks of a business and none of its responsibilities, then you end up with what one investigation into the NSW RSL described as "sheer ineptitude and cronyism".

The current Victorian RSL executive has been required by the ACNC to undertake governance training, which doesn't speak highly of its work to date. This may or may not lead to changes at the next round of elections.

I wish the Victorian reform team well, but they're pushing uphill; veterans haven't been a majority of the membership for decades, and veterans' interests may not rank highly in the priorities of the average parma-and-pot member.

Unless something changes, the RSL will soon have about as much to do with servicemen as the Freemasons have to do with the building trade.

On the whole, it's best to address these issues before it's too late. The point of being a not-for-profit is that you're supposed to know what your point is and stick to it against all distractions and temptations. That's what your board is for: to point the way. Everything else is paperwork.

Denis Moriarty is group managing director of OurCommunity.com.au, a social enterprise helping the country's 600,000 not-for-profits.