An income surge for Australia’s not-for-profits has led to an increase in paid jobs across the sector, despite the overall number of charities in the country falling, according to a newly released report by the Australian Charities and Not-for-profits Commission (ACNC).
Growth and change in Australia’s charities: 2014 to 2016, a sub-report of the Australian Charities Report 2016, assessed the annual information statements of more than 45,000 charities from 2014 to 2016 to identify trends in income, workforce, location and activities.
The figures were produced by the ACNC in partnership with the Centre for Social Impact and the Social Policy Research Centre at the University of New South Wales.
Income surge creates jobs
The report shows total gross income for the sector increased by 10% from $110.7 billion in 2014 to $121.8 billion in 2016.
The average (mean) income per charity increased from $3.5 million in 2014 to $3.9 million in 2016. Over the same time period, the median income per charity grew from $153,721 to $159,066.
Income growth for the top 1% of charities (by income) slightly outstripped the overall growth rate for the sector (11.3% compared to 10% overall), although smaller charities received a much larger proportional increase in income, at 25.5%.
This new income allowed not-for-profits to create more jobs, with the number of charities with paid staff growing by 6.4% to 3,296 charities in 2016. The total number of paid employees increased by 4.4%, with a large proportion being casual roles (up 10.7%).
However, while around one-third of charities experienced an income increase of over 20%, roughly one-in-five (19.1%) saw their total gross income falling by 50% or more over the same time period.
By size, smaller charities were more likely to report a drop in income, with almost 30% reporting a decrease compared to only 12.5% of large and 19.4% of medium charities.
The report divided not-for-profit income sources into three categories: government (covering federal, state and local level), donations and bequests, and other (which includes produce sales, raffles, lotteries, non-government grants, memberships, sponsorships, interest, rental income and dividends).
Income from government grants grew by 10.9% to nearly $53 billion, accounting for a good proportion of the sector’s total $121.8 billion income. This was accompanied by a 2.2% increase in the number of charities receiving government grants.
While donations and bequests are the smallest of the three income categories, it grew by 14.8% to $7.6 billion, reflecting the increasing generosity of donors and givers.
There was also an 8.7% increase in the broad ‘other’ category to $61.2 billion. However, the number of income sources it covers prevents a more detailed breakdown of whether this growth was due to improved fundraising techniques, more generous funders, or other income sources.
Decline in charity numbers
The overall number charities fell slightly, with the number of charities that were revoked from the register outnumbering new registrations. During the period, the ACNC revoked the charity status of 11,698 organisations and registered 9,044 new organisations.
A major reason for the high number of charities being deregistered is because they ‘double defaulted’, meaning they failed to submit their annual information statements to ACNC for two consecutive years.
A series of projects by ACNC to ‘clean up’ the register in the 2014/15 financial year led to more than 5,000 charities being removed from the register for double defaulting.
There were also a smaller number of charities that voluntarily deregistered themselves (including following mergers) or were removed as a result of failing to meet ACNC Act or governance requirements.
Additionally, the report noted that the number of new charities being registered is falling each year.
In a statement, ACNC Commissioner Gary Johns welcomed the research and its insights into the sector, adding that it is the “first comparative report, analysing changes over multiple years” produced by the ACNC.
“The key takeaway from this report is the incredible generosity of the Australian community. Between 2014 and 2016, which covers three reporting periods for registered charities, the value of donations and bequests increased by $1 billion,” Johns said.
“Overall, charity income increased from $110 billion in 2014 to $121 billion in 2016, providing an additional $11 billion for charitable activities here in Australia and abroad.”
The full report can be downloaded from the ACNC website here.