Charities report increasing revenue growth but volunteer numbers continue to decline

The Governance Institute’s 2023 Not-for-Profit Governance Forum taking place this month brings together some of the leading thinkers and practitioners from not-for-profits and charities across Australia to discuss the challenges and solutions for the sector. Around a quarter of our membership comes from NFP organisations.

The event’s key speakers including The Hon. Dr Andrew Leigh MP, Assistant Minister for Competition, Charities and Treasury, Helen Stephenson CBE, CEO, UK Charities Commission and ACNC Commissioner Sue Woodward AM will provide the latest updates on, regulation, standardising fundraising, charities advocacy and tax reform for NFP entities. The Australian Charities and Not-for-profits Commission recently released its 9th edition of the Australian Charities Report which delivers a snapshot of the state of the charities sector.

The latest official data shows Australia’s charity sector generated $190 billion in revenue and employed 10.5 % of the workforce, highlighting its significance to the Australian economy and community.

Commissioner Sue Woodward AM said it shows charity revenue, assets and donations grew in the 2021 reporting period.

‘This is a project close to my heart as I believe data makes an important contribution to understanding the depth and breadth of the sector, and provides insights that can help guide policy development,’ Ms Woodward said.

‘We can see the sector is a major employer. There were 1.42 million employees in the 2021 reporting period, and revenue growth was strong, up by nearly $14 billion on the previous period.’

Donations increased by $676 million to $13.4 billion, and charities reported more than $422 billion in assets, an increase of nearly $31 billion.

However, expenses also went up by $7.1 billion to almost $175 billion. Liabilities rose by $4.1 billion to $141.7 billion, with a 40% increase over three years. Further, the report confirms the widely observed decline in volunteering, with numbers dropping to 3.2 million, down from 3.4 million previously.

‘The picture is more sobering when we look at the decline over a longer time frame. There was a loss of around 596,000 volunteers between the 2018 and 2021 reporting periods,’ Ms Woodward said

‘This decline is of concern as we know volunteers are vital across the sector, and overall, 50% of charities operate with no paid staff.’

‘Behind the top line figures are thousands of small charities operating with mostly volunteers. In fact, 65% of charities are small, with annual revenue under $250,000, and a third of all charities have less than $50,000 annual revenue.’

As philanthropy is part of the current national conversation, with a Productivity Commission review taking place, the report includes a ‘Focus on giving and philanthropy’, which looks at Australian grant-making charities.

The data shows $13.4 billion (7 per cent) of charity revenue is made up of donations and bequests. That compares with $97 billion (51 per cent) of revenue from government, including grants.

Charities distributed $9.7 billion in grants and donations.

‘Our data confirms not only that philanthropists are significant in number — nearly one-fifth of registered charities are grantmakers – but they also play a very significant role in funding those charities we regulate,’ Ms Woodward said.

The Governance Institute is a signatory to a joint #fixfundraising coalition submission to the Productivity Commission review calling for the implementation of a single national framework and implementation of the national principles no later than July 2024. You can find out more here.