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Alarming environmental disasters, prolonged human conflict and displacement, and a cost-of-living crisis are just a few of the major issues that charities globally are responding to. In fact, the services of charities and not-for-profits (NFPs) are being called upon at increasing rates to meet the needs and solve the social and environmental issues that are ever growing. At the Be BlueRock Foundation, we love funding charities who are innovating their models and solutions to meet the needs of today and tomorrow and we love when charities collaborate with others in the sector to broaden their impact. In this article, we take a look at the state of charities, charity giving and philanthropy in Australia.
The Australian Charities and Not-for-profit Commission (ACNC) was established in 2012 to register and regulate Australian charities. Charities who repeatedly fail to submit their annual reports risk losing their registration.
The ACNC produced their 10th Australian Charities Report in 2023 analysing almost 50,000 charities' self-reported financials and annual statements. This reporting period fell during the early 2020 Bushfires and the COVID-19 pandemic and allows us to look back at how charities helped communities during this dire time.
Firstly, there are almost 60,000 registered organisations on the ACNC! A great way to measure the size of the sector is to look at employment. The Australian charity and NFP sector makes up 10.5% of the Aussie workforce, or 1.4 million jobs – that’s the same size as the construction and retail industries!
Total revenue in the 2023 ACNC Charities Report shows a revenue rise to $190 billion – an increase of $14 billion on the previous year. Revenue includes government funding, grants, bequests, donations and fundraising and for those on the path to self-sustainable models, revenue from products and services.
These ACNC-registered charities and foundations include grant-makers – one fifth of the ACNC registered organisations are funders, like us at the Be BlueRock Foundation. Philanthropy is increasing and plays a huge role funding a number of the charities on the ground providing services to people in need and creating sustainability solutions.
Organisations that are endorsed by the Australian Taxation Office (ATO) as deductible gift recipients (DGRs) are entitled to receive donations that are deductible from the donor's income tax. This means when a donor makes a gift or contribution to a DGR endorsed charity, they may be able to access various tax benefits of donating to charity. 41% of Australian charities have Deductible Gift Recipient (DGR) status.
Australian charities range from tiny, volunteer-run groups with no funding or revenue, to very large organisations with complex business structures and operations.
XS charities (<$50k revenue) make up a third of the charity sector while small charities (<$250k revenue) are the majority, making up 65%.
The charity sector is a diverse one that works across Australia and internationally in a broad range of areas, including health, education, social welfare, religion, culture, human rights, the environment and animal welfare. Religious & faith-based activities make up the most programs and receive strong revenue.
Most Australian charities are supporting people and causes close to home, with only 6% of charities operating internationally – the most common countries are India, Cambodia, Philippines, Indonesia and Kenya.
Australia saw a significant increase in donations around the Bushfires of early 2020. Then the 2020-2022 pandemic led to a sharp decline globally as 2000 charities ceased operating in 2021 and fundraising halted. Volunteering has also declined, which could be partly blamed on the pandemic. Aussies are volunteering less and less, with a drop by half from 2018 to 2021
On the plus side, structured giving is on the increase over the last 20 years, through Ancillary Funds (PAFs and PuAFs) such as the Be BlueRock Foundation, among others. Philanthropy in general is increasing through high net wealth individuals, with popular causes being universities, the arts, medical research and the environment. Corporate giving is also trending upwards as businesses combine purpose and profit.
Bequests are predicted to increase in number and value as we see a large flow of funds coming through to Australian charities from the wills of the Baby Boomer generation.
Australia ranked 4th on the latest World Giving Index which compares countries on the three giving behaviours below. But just like the US and UK, Australia is hitting a plateau in giving as of June 2023. Indonesia has been ranked the most giving country 5 years in a row.
Choosing the right charities to support requires careful consideration. Ask yourself what social or environmental issues keep you up at night or spark a fire in your belly?
Then, look for the Registered Charity tick and search the ACNC Charity Register to confirm the organisation is registered, the charity meets the required compliance and governance and (most have to) publicly report their financial reports.
There’s no standard accounting practice so how charities report their admin % varies; instead we encourage you to assess the charity’s impact, not just their spend. Think effectiveness, not just efficiency.
You can start your giving journey now! Simply learn by doing. Talk to charities, find out what they’re doing and donate directly. You can also explore the sector for yourself with this latest ACNC Charity Data explorer and research charities on the ACNC Charity Register.
When you’re ready to formalise your giving strategy, get in touch with our BlueRock Philanthropy Consulting team to help you decide what causes you want to focus your resources on, how to help charities, what charities to help, how to engage your family or business and how to set up a giving legacy for years to come.
Sources:
ACNC Charities Report (2023) https://www.acnc.gov.au/tools/reports/australian-charities-report-9th-edition
ACNC Charity Data explorer (2023) https://ow.ly/qUTg50PqxOP
AICD (Aug, 2023) https://www.aicd.com.au/regulatory-compliance/acnc-governance-standards/reporting/acnc-cracks-down-on-nfp-reporting-requirements
CAF (2022) World Giving Index https://www.cafonline.org/about-us/publications/2022-publications/caf-world-giving-index-2022
Institute of Community Directors (2023) https://communitydirectors.com.au/articles/australians-more-generous-to-the-tune-of-676-million-acnc-report
JBWere (August 2023) John McLeod, Australia’s Big Ticket Philanthropy Trends, Philanthrocrat August 2023 Webinar