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ACNC’s Annual Charities Report provides a window into the sector in Australia

The Australian Charities and Not-for-profits Commission (ACNC), in conjunction with The Centre for Social Impact and The Social Policy Research Centre, released the Australian Charities Report 2014 earlier this month.

The Report offers a comprehensive analysis of data for the 2014 year collected from 37,241 registered charities through their Annual Information Statements (AIS) lodged with the ACNC.

The Report also provides ‘sub-sector’ summaries, including ones for Health, Religion, Education and Research.

An extract of the high-level summary of the Philanthropic sub-sector data is shown below. Interestingly, this shows that only 27.9% of entities in this sub-sector hold DGR status.

These summaries, and the deeper details and insights that can be found as you drill further into the report, are likely to offer ideas, opportunities, and questions that could be useful in your planning and also in thinking about your day-to-day efficiency, tax effectiveness and impact.

Overall highlights
Some findings in the Report include:

  • Income: Charities have combined total income over $103 billion. Significantly, only $6.8 billion is from donations and bequests, with the major sources of revenue comprising $42 billion in government grants and $54.5 billion from other income, including investments and self-generated income. On average, donations contribute 13% of total income for large charities, compared to 32% for charities classified as small.

    The relative scale of income from each sector in 2014 is shown in the chart below.

  • Location: 85% of charities operate in one State only.

  • Deductible Gift Recipient (DGR) status: Around 40% of charities have DGR status. This compares to the previous estimate of approximately 50% estimated in the Final Report of the Not-for-Profit Sector Tax Concession Working Group in May 2013. The percentage of charities that have DGR status falls quite significantly as the average size of the charities fall.

  • Employment: Charities employ over 1 million staff and 1.8 million volunteers. These numbers indicate the significant economic and social contribution of the sector as an employer.

  • Legal Structure: In general, larger charities are more likely to be Companies, Incorporated Associations or Public Benevolent Institutions. Smaller charities are more likely to be Unincorporated Associations.

Does the report reflect all the Charities and Not-for profits in Australia?
No, the data in the Report does not include data from basic religious charities which are not required to provide financial information (most churches), nor does the Report include data from charities which were recently established and not yet required to report.

The Report is a welcome ‘first’.
The Report provides the first in-depth analysis, including financial data, of Australia’s charity sector. It represents a basis for many of the policy related debates in the charity sector, allowing discussion to continue beyond anecdotes. ACNC Commissioner Susan Pascoe AM stated that “the report will help us further understand the state of the charity sector in Australia and its needs, concerns and challenges. It also provides a rich source of data for new lines of research and analysis”.

The Report provides charities and not-for-profits a look into the sector as a whole, as well as an opportunity to glean some industry standard as well as benchmarks for your specific charity ‘sub-sector’, size or location.

The interactive ‘data cubes’, summary reports, and the full Report itself may be accessed and downloaded at http://australiancharities.acnc.gov.au/download/

Prolegis Lawyers advise exclusively in the charities and not-for-profits sector. Our services include charity establishment and governance, applications for DGR status and other taxation matters, charitable fundraising, employment law, disputes, mergers and other re-structuring. If you have any further questions in relation to the ACNC Report, or any areas of interest or concern that may arise from your review of it, please do not hesitate to contact Anne Robinson or Jon Cheung on +61 2 9466 5222 or by reply email.