We all know that Australia’s charities are run by dedicated people who provide vital services and support to our communities and abroad. As the CEO of UNICEF Australia and the Chair of the Australian Charities and Not-for-profits Commission (ACNC) Advisory Board, I see this first hand every day.
Australia’s charity sector is vast, however the public’s perception is often much more narrow, usually focussing on the large social welfare charities.
As a sector we need to change this perception by shaping the conversation.
When we discuss the charity sector, we don’t usually consider it as an economic contributor, in terms of growth and job creation. To this end, the ACNC Advisory Board has encouraged the ACNC to undertake research to investigate the charity sector’s contribution to our economy. We hope to be able to report back on the findings in late 2017.
We are a large sector, encompassing over 54,000 organisations across the country, and we have often faced the question from the public and the media – are there too many charities?
The ACNC Commissioner, Susan Pascoe AM, has tackled this complex issue on a number of occasions, and my thoughts on the matter are similar – it is not government’s place to dictate how many charities are too many. Citizens have a right to freedom of association, and a regulator should not be asked to determine charitable status based on the concept of a quota.
The more important question for us to ask ourselves is; are our charities effective and efficient?
When we talk about running a charity, the inevitable discussion of administration costs and reserves arises. This is a difficult subject for many charities and NFPs as demonstrated in the AICD’s 2016 NFP Governance and Performance Study. As stated by the AICD in this report – NFPs must aim to be financially strong, and most importantly we must acknowledge to ourselves, and to the public, that running a professional, sustainable and effective charity costs money.
However, as a sector, we must always be working to be increasingly streamlined, agile and efficient as donor dollars and government grants become harder to secure.
The introduction of the ACNC has certainly helped in this regard - it has a mandate to support the sector through education and guidance, and to also reduce the burden of unnecessary red tape. Significant red tape reduction initiatives are already in place, and I am confident further announcements are not far away.
The ACNC has also supported good governance, accountability and transparency in the sector. With the introduction of the ACNC, registered charities are now required to meet a set of five minimum governance standards.
If the ACNC finds that a charity is not meeting these standards, it will investigate and may revoke charity status (where appropriate). According to the ACNC’s latest compliance report, Charity Compliance 2015 and 2016, the ACNC was forced to revoke the charity status of two dozen organisations since 1 January 2016.
While 26 organisations lost their charity status during this period, the ACNC received over 1,800 concerns about charities, illustrating that the ACNC is committed to working with charities to help them get back on track.
The ACNC is also helping charities become more transparent and accountable to their donors by publishing the information charities provide. This has given members of the public an unprecedented amount of insight into the charities they support.
Charities are also showing their commitment to transparency by submitting these reports accurately, and on time – with the submission rate for the 2016 Annual Information Statement reaching 94%.
This increased level of accountability and transparency will undoubtedly have a positive impact on the public’s trust and confidence in the sector.
While much of the focus is on helping those in need, as it should be, there’s another side to our sector that is often overlooked.
The charity sector is a significant contributor to our nation’s economy, making it a unique source of economic growth.
The Australian Charities Report 2015 found that the combined income of Australia’s registered charities is over $130 billion annually - the equivalent of 8.3% of Australia’s GDP.
This puts the charity sector in the same conversation as the mining, transport, and energy industries.
Australia’s registered charities also employ over 1.2 million people, approximately 10% of the total workforce, which is second only to the retail industry. This figure doesn’t include the 3 million volunteers, who provide an enormous contribution.
When you put this all together, you find that we are a well governed sector, a transparent sector, an accountable sector, and a significant sector in terms of what we contribute economically and to the social fabric of this country.
Having worked in the private sector for many years, I am now very proud to be a part of Australia’s vibrant charity sector, and I’m sure you are too. Together let’s continue to deliver vital services to the community, and in doing so, change the conversation to ensure our sector receives the respect and support it deserves.