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The not-for-profit sector 2023 in numbers
As we begin a new year, we thought we’d explore the numbers in the not-for-profit sector in 2023 a bit more.
We look at how it’s performed over recent years and what the $176 billion not-for-profit industry may look like for Australia in the future.
The not-for-profit landscape
The Australian Charities and Not-for-profits Commission (ACNC) is the national regulator of charities and conducts a comprehensive research report based on the information it collects from Australian charities as part of their required annual reporting.
The NFP sector employs just over 10% of the Australian workforce. Its most recent report, the 8th edition Australian Charities Report, illustrates the contribution of Australia’s charities to the economy and thousands of communities, locally and abroad.
There are currently around 60,000 registered charities in Australia classified as either small, medium or large based on their annual turnover, ranging from under $250,000 for a small charity to over $1 million for a large charity (as at 30 June 2022 – thresholds for small/medium/large changed on 1 July 2022).
According to the report’s executive summary, small charities make up approximately two-thirds of all charities (65.3%), with large charities at 19% outnumbering medium charities at 15.7%.
Amongst the ‘traditional’ registered charities across the country, some organisations and services commonly found in towns all over Australia are also registered charities.
These include universities, aged care services, childcare centres, non-government schools, local parish churches, rural fire services, animal welfare organisations, environmental groups and cultural institutions such as museums and galleries.
A look at some of the numbers
Revenue for the 2019 reporting period was $166 billion. This figure showed consistent growth to $176 billion for the 2020 reporting period, despite nearly 2,000 charities not operating for the year, with 650 citing COVID-19 as a reason.
Australia ranks as the fourth-most charitable country in the world, behind New Zealand. We have the eighth-highest rate of people donating to charities at 68% and the ninth-highest rate of people helping strangers at 64%. Based on the World Population Review survey findings, our giving level has remained stable over the past decade at between 55% and 60% calculated by how many of us help a stranger, donate to a charity or volunteer.
In Australia, the NFP sector is well supported by the government, with revenue at $88.8 billion in 2020, up $10.7 billion from the previous period, largely due to JobSeeker and other government stimulus measures related to COVID-19. According to the report’s findings, revenue from the government accounted for more than half (50.4%) of the total revenue for the sector.
The report suggests that religious and primary and secondary education were the most significant common charity activities. Charities focused on advancing education employed the most staff, over 330,000 people. Volunteer contributions remained high (3.4 million volunteers in total) but decreased by 220,000 in the 2020 report, with the charity subtype of advancing the natural environment reporting the most volunteers at 810,000.
What defines a charity
The Charities Act clarifies that to be a recognised as a charity, an organisation must:
- be not-for-profit
- have only charitable purposes that are for the public benefit
- not have a disqualifying purpose
- not be an individual, a political party or a government entity.
The Charities Act also confirms that an organisation must only have charitable purposes. In her latest column, acting commissioner of the ACNC, Deborah Jenkins, said of a discussion she and ACNC Advisory Board member Heather Watson were having with a frustrated industry stakeholder around Deductible Gift Recipient status:
“He was telling us with passion about what he was doing for a sector of the community through the lens of a product – in this case an app. At exactly the same time, Heather and I had a lightbulb moment. We both said, ‘Describe your purpose, not your app,’ and bingo, he had a lightbulb moment too – the app was a means by which he could achieve his purpose, but not the purpose itself.”
Some organisations consist of multiple separately registered charities. These individual organisations may fall under a larger parent body, but they each have their own Australian Business Number (ABN) and separate charity registration. The ACNC lists examples of these charities:
- The Salvation Army – around 30 separately registered charities
- University of Melbourne – more than a dozen separately registered charities
- Surf Life Saving– more than 300 separately registered charities
- Lifeline – more than 20 separately registered charities
- Returned and Services Leagues (RSLs) – more than 800 separately registered charities.
The not-for-profit focus on purpose for 2023
Deborah Jenkins believes a key focus for the not-for-profit sector must be “staying true to the charitable purpose.” She believes “this is critical to delivering on an organisation’s mission and ensuring they stay on track and meet their regulatory obligations.”
In the ACNC’s 2022 – 23 Corporate Plan, Jenkins emphasises that a “clear purpose supports innovation [which is] especially important during times of disruption such as the sector has experienced in recent years. She further highlights the importance of supporters and donors being loyal to charities with a clear purpose close to their hearts and aligning with their values.”
We know not-for-profit accounting
Get in touch with our team of not-for-profit accounting specialists who understand the NFP sector and are committed to supporting NFP organisations.
