Report Reveals Biggest Charity Earners
Tuesday, 20th September 2016 at 11:31 am
Australia’s top 25 charities had a total annual revenue of $25.2 billion in 2014 – the same amount as the combined annual revenue of the country’s bottom 44,891 charities, according to a major analysis of financial data held by the charity regulator the ACNC.
Accounting for Good examined ACNC data focussing on the financial statements of charities which completed reports for the 2014 financial year.
The figures show the top 25 Australian charities (excluding universities) had revenue of $17.9 billion in that financial year. The top charity was the Catholic Education Commission of Victoria with revenue of more than $2 billion.
Goodstart Early Learning came in at eighth on the list with an annual revenue of $875.2 million, World Vision came in at 18th with $380 million in annual revenue and Mission Australia at 21 with $284.5 million.
In terms of revenue from government grants, the top 25 charities (excluding universities) received $10.46 billion, being 75 per cent of their total gross income of $13.94 billion.
Accounting for Good (formerly Matrix on Board) CEO Morri Young commended the ACNC on making the data publically available.
“For the Not for Profit sector there are some benchmarking issues that can come out of this data such as the ratios of assets to liabilities and what is considered a reasonable amount,” Young said.
“There isn’t really any comprehensive benchmarking data available and whilst it is really quite early days this is going in the right direction for giving people some sense of what is reasonable around an amount of surplus, what is a reasonable level of assets to hold.”
Young said one of the surprises from the data was how big the numbers were.
“There are big numbers in the top couple of hundred organisations. I was surprised at how high the government funding was for those large players, about 75 per cent of their revenue. Given that they rely so much on philanthropy and donations it is probably only a small proportion of their income. There are implications for that funding reliance and the [analysis] probably raises more questions than it answers,” Young said.
“I think there is also the theme of the large players being so large and the myriad of small players in the charity sector without even getting into the Not for Profit sector generally.”
The analysis found that in regard to a surplus in 2014, the top 25 charities (excluding universities) made over $2 billion, similar to the bottom 46,300 charities. On the other hand, 11,250 charities reported deficits totalling $1.79 billion, ranging from $1 to $63.6 million. A further 304 charities reported deficits of more than $1 million, and 15 had losses of more than $10 million.
The top 25 charities held assets totalling $46.3 billion in value. Of these 25,18 were universities. Excluding the universities, the top 25 charities hold $24.2 billion worth of assets – same as the bottom 45,825 charities.
254 charities (excluding universities) had assets of more than $100 million, and nine had more than $1 billion in assets.13,966 charities reported zero asset values.
“For the smaller providers there are questions about the cost of doing business really. And whilst it isn’t really clear in those numbers, [it seems] the small players are struggling to hold assets, to hold surpluses and hold reserves really,” Young said.
“Small to medium charities and Not for Profits need to be brave and build their reserves.
“We have a strong view that small to medium organisations need to build their reserve and they come in for a lot of criticism for making surpluses and we want to dispel some of that criticism and help them feel comfortable about strong reserves and show them that the big players have no trouble and are not embarrassed at all by their strong reserves. It is often the small to medium charities that get criticised for building any kind of reserve.”
Young said part of the analysis included the proportion of employment costs to overall expenditure.
“I think that is important for the small to medium to know what is a reasonable…spend on employment and so we want to try analyse that a bit more.”
The analysis showed that the aged care sector spent the greatest proportion of revenue on employment costs – at 66 per cent. This was followed by social services at 63 percent.
Download the analysis here.