Australians Give Less as NFPs Move to Find New Revenue

Australians are donating less to charity – by about $1 billion a year –  as not-for-profit organisations move to find new ways to raise the funds to deliver community services, according to a new report by the national charity regulator.

The Australian Charities Report 2016 examined the 2016 annual reports of more than 52,000 charities submitted to the Australian Charities and Not-for-profits Commission (ACNC).

The report, launched by Assistant Minister to the Treasurer, Michael Sukkar on Wednesday, found that Australian charity revenue jumped to $142.8 billion in the last year with charities reporting an overall increase in revenue but also a fall in donations.

Pleased to launch the @ACNC_gov_au Australian Charities Report 2016 with representatives from the charities and NFP sector pic.twitter.com/tTVIp5hxhk

— Michael Sukkar (@MichaelSukkarMP) December 6, 2017

Acting ACNC commissioner Murray Baird said the Australian Charities Report 2016 found that charities had increased their revenue not through donations but through other income sources.

“While revenue was up, we did see donations and bequests fall from 11.2 billion to 10.5 billion over the last year,” Baird said.

“The Australian charity sector is vibrant and innovative, which has allowed them to diversify the way they raise the funds necessary to deliver vital services to the community.

“The Australian Charities Report 2016 found that nearly half of all charity revenue in 2016 was generated through membership fees, user-pays services, and other income sources.

“By not relying on one income source, charities have ensured they can deliver services to the community in a more sustainable and robust manner.”

Baird said Australians were still “incredibly generous”.

“The 2017 World Giving Index ranked us as the sixth most generous nation in the world,” Baird said.

“Pleasingly, the report found that charities have 2.9 million volunteers, and this number has remained high compared to last year.”

Some of the key findings from the Australian Charities Report 2016 include:

• registered charities had a total revenue of $142.82 billion;
• charities that provide education services, such as universities and non-government schools had the largest annual revenue. This group makes up 18.6 per cent of the total number of charities, but accounted for 45 per cent of the sector’s total revenue;
• charity revenue was generated through membership fees, user-pays services, and other income sources (49.7 per cent); government grants and contract payments (43 per cent) and donations and bequests (7.3 per cent);
• the most common type of charity is religious groups (31 per cent), however, this group of charities only takes in 6.6 per cent of the sector’s total revenue;
• most registered charities are small (67 per cent) with annual revenues under $250,000;
• 10.6 per cent of all Australian employees are employed by charities;
• 49.6 per cent of charities have no paid staff;
• on average, each charity has 58 volunteers and in total there are 2.9 million volunteers;
• more than half of all charities operate in either New South Wales (39.7 per cent) or Victoria (31.1 per cent); and
• only a small number of charities help communities overseas (8.4 per cent).

CEO of Fundraising Institute Australia, Rob Edwards told Pro Bono News that the decline in donations seen in the ACNC report and other recent reports were the result of a combination of issues including “relentless negative media” and “charity brand clutter”.

“I think there has been relentless negative media over the past 12 months in regards to fundraising, some of it around the cost of fundraising –  the Shane Warne case, the RSL case in Sydney and we have had Choice Magazine attacking telemarketing,” Edwards said.

“Only last week we had the ACCC release a report attacking the cost of face-to-face fundraising telling people they should give directly to a charity. So the degradation in trust in charities has to have a knock-on effect for charity giving.

“Clearly there are a number of government inquiries into the activities of face-to-face fundraising and when the ACCC takes a very strong position in the media, then that is going to have people questioning charities as well.”

He said the sector was also up against the misguided belief that charities should have little or no fundraising costs.

“That’s a story we find hard to counter because the media does not want to hear the good side of it,” he said.

“The other issue is also the clutter in the marketplace. With the roll-out of the NDIS there are a lot of charities that [previously] did rely solely on government funding that are also now in the marketplace trying to raise funds from a pool of donors that’s not actually growing all that much.

“There is brand clutter and confusion in the market.”

When asked for his advice to fundraisers in the wake of the ACNC report Edwards said: “At the end of the day I think they’ve got to be out there doing the job as best they can in a difficult marketplace.

“We are here to defend the interests of fundraisers and we will continue to do what we need to do to improve fundraising practice.That’s what we are here for.”

The Australian Charities Report was produced in partnership by the ACNC and the Centre for Social Impact and the Social Policy Research Centre at the University of New South Wales.

The full Australian Charities Report 2016 and interactive datacube can be found here.