Podcast: Regulator ready to support new charities amid surge in numbers

Australian Charities and Not-for-profits Commission (ACNC) commissioner Sue Woodward, speaking in a wide-ranging podcast interview about the latest Charities Report, said charity numbers had remained steady for many years at the 60,000 mark.

(Scroll down for the full podcast)

But the Australian Taxation Office’s requirement for non-charity not-for-profits to lodge a “self-review return” to demonstrate their income tax status was the trigger for an estimated 4,000 organisations to seek registered charity status, thus avoiding the requirement.

“It was very steady at almost 60,000, and then incrementally over the last couple of years there’s been an increase. That’s really reflected by the number of organisations that had thought they could self-report for income tax assessment purposes, but have now realised that they’re eligible to be a charity. And if they want to retain that tax concession, they’re now registering with us. So that’s really the main driver of that increase,” Woodward said.

The commissioner said many Australians underestimated the charity sector’s economic contribution, particularly its role in employment.

“It’s one of my favourite facts because it’s not what people expect. We’ve seen an increase this year from 10.5% of the workforce to 10.7% being in registered charities. So, almost one in 11 working people are working for a registered charity. That’s not something people often realise. … It’s bigger than the construction industry. It’s bigger than manufacturing. Hopefully, when the public sees it in those terms, they’ll take the sector more seriously.”

Woodward said the ACNC’s priorities for the coming year included:

• addressing any “fluctuations in demand”
• supporting new organisations that have joined the charity register in lodging required information
• working with other government agencies to streamline reporting obligations and other processes
• working closely with the new state-based members of the ACNC’s advisory board.

Asked about the key signals that the ACNC would be closely monitoring to assess the sector’s health, Woodward said the regulator would examine a combination of revenue, expenses, volunteer numbers, diversity of funding sources, and organisational size.

But she stressed that “it’s not a homogenous sector” and that while the latest Charities Report showed a “headline” revenue increase of $20 billion to $222 billion, a closer reading would also account for the demand side of the equation.

“We know that this sector can't just put its prices up ready to meet increased revenue. It’s revenue for a purpose and that's what's the most important thing for this sector.”

Woodward encouraged all not-for-profits to read the report, which she said was designed to be “easy to read” and included infographics to explain sector trends.

More information

Report summary: Charity sector revenue hits record high

Self-review tax return is changing the NFP landscape: ATO