The Australian Charities and Not-for-profits Commission (ACNC) has released the Annual Australian Charities Report 9th Edition (the Charities Report), analysing the activity of 49,402 charities for the previous reporting period. In this period, 3,083 new charities were registered and 1,699 entities had their charity registration revoked (15 of which were revoked by the ACNC due to compliance issues).

The Charities Report provides insights into the landscape charities are operating in and highlights issues facing the sector as a whole. It covers the 2021 ACNC reporting period, which includes the financial year of 1 July 2020 – 30 June 2021 and the calendar year of 1 January 2021 – 31 December 2021.

Key takeaways

Overall revenue increased, with significant increases in revenue from donations and bequests, investments and government

• Total revenue increased by 7.9% from 2020 to $190 billion. Comparatively, over the 2021-2022 financial year the Australian economy grew by 3.6%.
• Revenue from donations and bequests rose to $13.4 billion, a 5.3% increase from 2020.
• Revenue from investments rose by 28.5% from 2020 to $6.4 billion. This significant increase was attributed by the ACNC to the poor performance of the financial markets in 2020 as a result of COVID-19, and their subsequent recovery in the 2021 reporting period.
• Revenue from government (including grants) increased by 9.5% from 2020 to $97 billion.

Expenditure and costs continued to rise, but at a slower rate compared to previous years

• Expenses increased by $7.1 billion (4.2%) from 2020 to $174.8 billion, against the Consumer Index Price rising by 3.8% over the 2020-2021 financial year. The rate of increase for expenditure of 6.4% however, was less than previous reporting periods.

An increased focused on giving and philanthropy

• Nearly 20% of all charities reported being grant makers of some type, including public or private ancillary funds, other types of structured trust and charities which classified a program as grant-making or reported grants and donations expenses (in Australia or overseas) of more than 70% of their total expenses.
• Sector wide, charities reported spending $9.7 billion on grants and donations in the 2021 reporting period ($7.5 billion of which was spent within Australia and $2.2 billion of which was spent outside Australia).
• The total spend on grants and donations marks an increase of 5% on the previous reporting period, a continuation of the upward trend in spending in this area over the last three years. Though this data precedes the Albanese Government, this increase is a good sign for the Australian Government’s pledge to work with the sector to double philanthropic giving by 2030.

Employment in the sector continued to steadily increase, but the number of volunteers dropped, continuing a trend of volunteer participation declining downwards for the past three years

• The charity sector employed 1.42 million people in the 2021 reporting period, a total increase of approximately 111,000 people over three years.
• The charity sector accounts for 10.5% of the Australia workforce (comparable to that of the construction industry and retail trade industry (employing 1.2 and 1.4 million respectively).
• Half of charities reported no paid staff in 2021, meaning they relied on volunteers alone, demonstrative of the importance of people contributing time, as well as funds, in the charity sector.
• Despite this, numbers of people volunteering for charities decreased within the reporting period, with a reported 3.2 million volunteers, continuing the downward trend identified in 2020. Since 2018, there has been a loss of more than half a million volunteers.

Approximately 4% of charities declared they were not operating in the reporting period, with just under half of these charities citing COVID-19 as the reason

• The number of charities not operating in the reporting period rose to just over 2,000. Of the charities not operating, 43% cited COVID-19 as the reason why. Other reasons cited included lack of funding, insufficient staff and volunteers and conducting activities in the name of another charity.

Approximately 6% of charities operated overseas

• These charities reported operations in 199 different countries or regions, the most common countries being India, Cambodia, the Philippines, Indonesia and Kenya.

What the Charities Report tells us?

The Charities Report looks at how charities handled the second year of the COVID-19 pandemic, which came with its own set of unprecedented circumstances, including vaccinations, continued lockdowns and remote working adjustments. While the financial markets began to recover and revenue was not significantly impacted, a number of charities remained shut as they waited out the pandemic. However, new charities were registered and employment across the sector remained steady. This Charities Report demonstrates the resilience of the sector in its ability to withstand evolving challenges to keep delivering essential services for the community.

For more information, you can access the full report on the ACNC website, and the Charity Data Explorer which provides all the datasets which may be directly relevant to your charity.