A new ACNC report has reaffirmed the vital role of not-for-profits, but there are still some compliance concerns.
Australian charities come in all shapes and sizes, operating in key areas that include health, education, religion, and providing general support to the needy. The sector is not only significant in size, but in its contribution to society.
Until recently, however, detailed information about its financial and other assets had not been publicly available.
Given the sector’s heavy reliance on the generosity of the Australian public and government support through grants and tax concessions, such lack of transparency had long raised concerns.
That changed in 2012, with an Act that established the Australian Charities and Not-for-profits Commission (ACNC), which is a Commonwealth regulator tasked with overseeing and providing guidance to Australian charities.
The ACNC gathers financial and other data from registered charities and publishes it at www.acnc.gov.au. In addition to making the data publicly available and using the information to help ensure regulatory compliance, the watchdog undertakes extensive analysis to identify key trends in the sector and other significant facts and figures.
Indeed, in December 2015 the ACNC released its landmark Australian Charities Report 2014 australiancharities.acnc.gov.au, which for the first time revealed high-level, detailed financial and operational information on charities.
Prepared by the Centre for Social Impact (CSI) in partnership with the Social Policy Research Centre at the University of New South Wales, the report examines the data provided by some 38,000 charities which lodged a 2014 Annual Information Statement (AIS) by 31 July 2015.
Notably, however, around 54,000 charities were registered with the ACNC at the time, meaning approximately 16,000 failed to meet their obligation to lodge an AIS.
Highlights from the report include:
Charities had combined total income of just over $103 billion in 2014, with $95 billion in outgoings.
The sector employs over 1 million people.
Four out of five charities engage volunteers while 44 per cent operate without paid staff.
Organisations have on average been established 33 years, although six per cent have existed for more than a century.
The vast majority (85 per cent) operate in only one state or territory, with 17 per cent involved in work overseas.
Reporting standards and disclosures in the NFP sector – Learning manual: this course covers the most commonly used Australian Accounting Standards for not-for-profit entities.
Charities overdue on lodging their AIS at risk
It is significant that for the 2015 reporting period, around 19,000 charities are still to file their AIS, which is due to the ACNC by 31 January 2016.
Further, the regulator has indicated that some 3,200 have been identified as “double defaulters”, having failed to yet lodge either a 2014 or 2015 AIS. It has warned that such parties are at risk of losing their registration, including associated Commonwealth tax concessions, as these are only available to charities registered with the ACNC.
Last year, it deregistered close to 6,000 organisations because they defaulted twice.
Before the 2013 federal election, the Coalition promised to disband the ACNC and when in government introduced an abolition bill. However, many charities have since expressed strong support for the ACNC and want it retained. A large number of senior business leaders have also thrown their weight behind the regulator.
Ram Subramanian is CPA Australia’s policy adviser – reporting.