Charities squeezed as rising costs outpace revenue growth

By the Australian Charities and Not-for-profits Commission (ACNC)

Australia’s charities are feeling the impact of the cost-of-living crisis as demand for their services continues to rise.

New data from the Australian Charities and Not-for-profits Commission (ACNC) shows charity expenses grew faster than revenue in 2024. The findings come from the 12th Australian Charities Report, which analysed 53,641 Annual Information Statements lodged by charities.

ACNC Commissioner Sue Woodward AM said the results highlight mounting pressure on both the sector and the communities it supports.

The charity sector employed 1.6 million people (11% of the workforce) and engaged 3.9 million volunteers, the highest number recorded.

Smaller charities continue to have fewer financial resources, while extra-large charities generate a significant share of total revenue.

Donations and bequests reached $14.8 billion, the second-highest total ever, while government funding remained the largest revenue source at $118 billion.

“Our data shows yet again that the sector is a major economic force – a contribution in addition to the sector’s vital social role as the connective tissue for communities across Australia and abroad,” Woodward said.

Analysis by Catherine Maxwell, General Manager, Policy & Advocacy, Governance Institute of Australia.

Significant numbers of Governance Institute members either work or volunteer in the charitable and not-for-profit sector. As the employer of 11% of the Australian workforce, this sector is vital not only to those receiving services and support but also to the broader economy.

The latest ACNC report reflects what we are hearing from members in the sector. Rising costs are increasing pressure on the delivery of services. Pleasingly, volunteer numbers, which dropped markedly during the COVID-19 pandemic, appear to have recovered. But that alone will not resolve the sector’s challenges. Strong governance, sustainable funding and effective workforce planning will be critical if charities and not-for-profits are to meet growing demand while maintaining service quality.