Too Many Charities in Australia? Regulator Says No

With over 54,000 charities currently registered in Australia the national charity regulator has been wrestling with the question of whether there are too many charities and decided there aren’t – but there is room for mergers where there is duplication.

The Australian Charities and Not-for-profits Commission (ACNC) has published a factsheet which it said explains the law and compares Australia to other jurisdictions and its position on the number of charities.

The ACNC said the factsheet, Are there too many charities in Australia?, provides background and context to the number of registered charities, and clarifies some common misconceptions.

ACNC commissioner Susan Pascoe AM said the issue of charity numbers has been discussed widely in recent months and has elicited a range of views.

“This is a complex topic and we feel that the new factsheet provides a good grounding for reasonable discussion,” Pascoe said.

Pascoe said that while she did not agree that there were too many charities in Australia, she recognised that there were instances of duplication in the sector where efficiency and effectiveness could be improved.

“As I have stated publicly and written about in the past, the ACNC does not believe that there are currently too many charities in Australia,” Pascoe said.

“However, this is not to say that there aren’t areas in which charity work could be more efficient or effective.

“Where there are instances of duplication of charity efforts and funds, the ACNC recommends that charities consider their effectiveness and options for achieving better outcomes.

“This may mean considering collaboration, or even mergers, with other charities.”

In 2015 World Vision’s Tim Costello and the Community Council for Australia’s David Crosbie called for hundreds of charities to merge or shut down because too many of them were wasting valuable resources competing with each other.

Crosbie said at the time while many charities were running off the “smell of an oily rag” and relying on volunteers, this frugal approach was not always the best way to save money and serve the community, and collaboration and possible mergers should be a part of future planning for all organisations.

“Self-interest can be a hard thing for charities to put aside, however we are in the business of serving communities, not ourselves,” Crosbie said.

“Charities and not for profits serving the same communities may need to work much harder at collaboration and possible merges, not just because it is in their interests but in the interests of the communities they serve.

The merger call however split the opinions of those in the not-for-profit and charity sector.

Recent research published by the Australian Institute of Company Directors (AICD) showed that the sector was focused on effectiveness and efficiency.

“The AICD’s 2016 NFP Governance and Performance Study found that in response to changes in the operating environment, 35 per cent of not for profits have discussed a merger in the past 12 months,” Pascoe said.

“Eight per cent are currently involved in a merger, and 6 per cent had completed a merger.

“I can say confidently that the overwhelming majority of charities are run by good people, have sound financial management, good governance practices, and are adaptable to change.”

The new information sheet and FAQs can be found on the ACNC website.