Charities report reveals covid-era volunteering drop could have been worse

Posted on 26 Jun 2023

By Chris Borthwick, thinker in residence, Our Community

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Our Community thinker in residence Chris Borthwick delivers his take on the recently released Charities Report.

The Australian Charities and Not-for-Profits Commission (ACNC) has just produced its ninth Australian Charities Report, covering the information it collected in 2021.

It’s a useful and informative guide to the state of the not-for-profit (NFP) sector – well, as informative as it can be given the extreme variability of the sector.

The basic problem is that Australian charity law bundles a whole lot of very different things under the same definition, and you can’t work out what it all means without sorting out which bits are doing what.

On one level, the main difference between organisations is size. Leaving out the unknowns (a lot of charities aren’t required to give figures), 78 per cent of Australian charities are extra small, small, or medium – meaning their revenue is less than $1 million per year – and 22 per cent are large, very large, or extra large (universities and churches).

I’d estimate, based on the figures in the income bands, that the 78 per cent of small ones bring in 2.5 per cent of the income and the 22 per cent of large ones catch the 97.5 per cent left over. There is surely some question as to whether these stats are really comparing the same sort of things.

It’s also seriously misleading to take overall averages.

ACNC Charities Report

The report says: “The 2021 reporting period showed that, on average, each charity holds approximately $8.7 million in assets – an increase of more than 9 per cent on the previous reporting period and over 23 per cent on the 2018 reporting period.”

That’s the kind of average that says if Elon Musk boards a rush-hour train in Sydney’s Cabramatta then the worth of the average passenger is over half a billion dollars. It’s true mathematically, but largely irrelevant (unless the passengers get together and hold him to ransom).

The report apparently notices this, pointing out in the next line: “However this figure differs greatly according to charity size, with extra small charities holding, on average, nearly $300,000 in assets.”

There’s also a serious distinction to be made between the charities that are trying to raise money and the charities that are trying to spend money. Service charities want more money than they have: grant making foundations want to get money out the door. Lumping the income and expenditure of both in the same tables is confusing.

The ACNC, to do it justice, has noticed this, and has broken out the foundations – 19 per cent of all charities – into a separate table.

Some 11,400 grant makers hold some $51.2 billion, an average of around about $5 million in the kitty each (though for averages, see above), which does quite a lot to distort averages that include those charities that have to do lamington drives to raise money rather than just write cheques from a deceased estate (not that there’s anything wrong with that, of course).

And of that $51 billion, in 2021 they gave away $9.7 billion in grants and donations, an increase of 5% on the previous reporting period (not allowing for inflation).

Lastly, there’s the religious divide: “Basic Religious Charities (17 per cent of all charities) are not required to answer the financial questions in the Annual Information Statement, nor submit annual financial reports or comply with Governance Standards.”

Of the ten Australian charities with the highest number of employees (over 11,000), six are churches or church-linked organisations, so this is a potential weakness.

ACNC Charities Report graphic
A visual snapshot of the state of the Australian charities sector. Source: ACNC Australian Charities Report.

I’d also rather like to know the names of the 15 charities whose registration has been revoked by the ACNC, and why, but that’ll apparently have to wait till the Act is amended to water down its privacy provisions in favour of a little transparency.

“On average, these organisations had been operating for 16 years (compared to an average of 14 years in the previous reporting period). The youngest organisation had been operating for four years, the oldest for 41. … These organisations held assets of approximately $10.5 million according to the most recent Annual Information Statements they had submitted.”

Still, let’s stop kibitzing and look at what 2021’s figures are telling us.

Financially, on the surface, good news: “Charities generated approximately $190 billion in revenue – an increase of nearly $14 billion from the previous reporting period, and an increase of $34.5 billion from the $155.4 billion reported three years earlier.”

With the substantial reservation that “… expenses also increased by $7.1 billion from the previous reporting period.”

So the balance is up by about $7 billion, of which – and here really big congratulations to the ACNC for asking and answering the question – “ACNC-registered charities received JobKeeper payments totalling around $7.6 billion.”

So actually half a billion down, overall, in ongoing terms.

On the plus side, again, “Charities also reported more than $422 billion in assets, an increase of nearly $31 billion from the previous reporting period” – though that’s not adjusted for inflation, and for the first time in years that’s relevant. $11 million of that $31 million is illusory.

In any case, no grounds for panic. Yet.

Until we come to the volunteering rate, which doesn’t look good, “with charities reporting that 3.2 million volunteers helped deliver services in the 2021 reporting period. While the total number remains high, it is a decrease of approximately 180,000 on the previous reporting period and of approximately 596,000 from 2018 when charities reported 3.77 million volunteers. “

That’s quite a drop, and it’s another point on a graph that’s shown volunteering numbers dropping since 2010. The makeup of Australian socialising is changing, and charities are drifting out of contact. That’s a real worry.

ACNC Report volunteers graphic

On the other hand, while the financial news isn’t as good as it first looked, the volunteering news isn’t quite as bad, either.

The drop in employment was overwhelmingly in the larger charities, the ones that had many employees – universities, probably. They went down by 21,000, while small cuddly charities actually went up by 9,300. If there has to be a drop,

I’d rather have this kind – though, on the other hand, small charities probably had to get more volunteers to make up for the fact that their number of employees dropped by 3,100.

However, on the other hand– and I promise that this is my last hand – things could be better, but you also have to remember that this result was during the worst of covid.

If volunteering exists at all in those figures, that’s actually pretty surprising. Early estimates suggested that it was going to be a whole lot worse. About 2 per cent of all charities did go into hibernation, in fact, and if they come back post-COVID then next year’s figures may look better.

Overall, then, mixed signals, and no clear guides to action, if only because it’ll take another two ACNC reports before we get to see whether the more benign attitude to charities under the present government is reflected in the hard statistics.

ACNC Australian Charities Report - 9th edition

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