Last week the Australian
Charities and Not-for-profits Commission (ACNC) shared
its first insights into the charitable sector based on the initial 3,000 Annual
Information Statements filed by Australian registered charities.
These first 3,000 returns
only give an indicative view of the sector - the ACNC is expecting about 57,000
returns in total between now and mid/late 2014.
But it’s interesting nonetheless to compare these insights to information
provided by New Zealand’s 24,321 registered charities in their most recent
returns. What stands out is how similar
the charitable sector statistics are between the two countries, based on the
limited amount of data released by the ACNC so far.
SUMMARY
Charity sizes: Australia reported that 74% of its charities fall into the small category and 11% fall into the large category, with the remaining charities falling into the medium category. New Zealand's equivalent is 81% small charities and 7% large charities, using the same criteria. The proportion of small, medium and large
charities is therefore fairly similar between the two countries – with New Zealand having
slightly more small charities and Australia having slightly more large
charities.
Beneficiaries: Both
countries list the general public and children/youth as two of their top three
charity beneficiary categories.
Australia also lists the elderly in their top three, but New Zealand lists
religious groups as the third most common beneficiary group (the elderly come
in at number seven). However, beware of the problems with capturing charity
beneficiaries on the regulator form – the approach differs markedly between the
two countries.
International assistance: 16% of Australian
charities and 13% of New Zealand charities work to help people internationally.
Charity volunteers and paid staff: By
coincidence, 42% of Australian charities and 42% of New Zealand charities reported that they solely
rely on volunteers. At the end of their
2013 reporting period, Australia’s 3,000 charities reported a total of 225,000
volunteers, along with 13,000 full-time employees and 18,000 part-time
employees. New Zealand’s 24,321
charities reported a total of 413,000 volunteers, 112,000 full time and 440,000
part time employees. However, once
again, beware of the problems with capturing information about charity
employees and volunteers. The New
Zealand information suggests that up to 16% of registered charities may be
failing to complete the “your people” questions despite engaging paid or
volunteer staff, so the aggregate totals could be materially understated.
The extent of red tape and reporting: 29% of Australian charities that have submitted an Annual Information
Statement indicated how much time per annum they spent on reporting to
Commonwealth, or state and territory departments and agencies. Small charities
indicated that they relied heavily on volunteers, with volunteers completing 70
hours of government reporting, compared to 16 hours by paid staff. Large charities, on the other hand, indicated
that they relied heavily on paid staff, with paid staff spending an average of
288 hours and volunteers spending 20 hours reporting to government. New Zealand does not ask these questions so
there are no comparable figures.
THE DETAILS
Charity sizes (based on total revenue)
The ACNC reported that 74% of
the 3,000 charities which have filed their 2013 Annual Information Statement were
small charities (with annual revenue of less than $250 000), 15% were medium (with
annual revenue of $250 000 - $999 999) and 11% were large (with annual revenue
of $1m and over).
In New Zealand the figures
are surprisingly similar if you apply the Australian thresholds to the New
Zealand charities’ gross income. Approximately
81% of New Zealand’s 24,321 filers would be small, 12% would be medium and 7%
would be large.
The only noticeable
difference is that New Zealand has slightly more small charities and slightly
less large charities than Australia.
Which is what you might expect based on Australia’s population compared
to New Zealand – Australia would naturally have more charities in the ‘large’
category.
Beneficiaries
The top three beneficiaries listed by the Australian charities were
children and young people, the general community in Australia and elderly
people. This is out of a total of 19 possible options (excluding ‘other’).
The top three beneficiaries listed by the New Zealand charities were the
general public in New Zealand, children/young people, and religious
groups. This is out of a total of 11 possible
options (excluding ‘other’ which I have mostly recategorised).
Initially this may lead you to conclude:
(1) New Zealand has a bigger charitable focus on religious groups than
Australia, and
(2) New Zealand is far less
charitable to its elderly people compared to Australia (elderly people are
actually ranked seventh out of 11 New Zealand beneficiary types).
However, on closer inspection, the conclusion about religion is incorrect. Australia’s annual charity form does not even
have a beneficiary category for religious groups. Instead, it identifies religious-related
charities through its purpose question (the advancement of religion) and its
activities question (religious activities). So we still do not know whether New Zealand is more focused
on religious groups compared to Australia, because the beneficiary data between the two countries is not comparable. [I have published more information about New Zealand's religious charities in my September 2012 blog "Religious Charities".]
The smaller proportion of charities helping older people in New Zealand
is not so easily explained. One theory
is that many elderly New Zealanders belong to religious groups, so charities
may have nominated religious groups, rather than older people, as the
appropriate beneficiary category. In any
case, it’s worth keeping an eye on how the figures compare with Australia as
more Australian charities file their returns.
There’s one final point worth noting about beneficiaries. The questions used by regulators to elicit charity
beneficiaries are likely to have a high error rate in both countries for the
following reasons:
·
Too many beneficiary options: There are a
lot of boxes to tick to identify the relevant beneficiaries (19 in Australia
and 11 in New Zealand) – so some charities may simply give up and tick one or
two, whereas more categories may be appropriate.
·
Temptation to identify the widest possible number of beneficiaries: Some charities may be tempted to
tick all of the boxes to show they are really there for the general community
(even though both countries provide a specific ‘general community box).
·
Odd beneficiary categories: Both countries suffer from odd beneficiary categories. New Zealand's category for 'family'whanau' came in as the fourth most common beneficiary, but what does it mean in the charitable context? New Zealand also has a category for "people of a certain ethnic/racial origin" - without explaining exactly what a certain ethnic/racial origin is. Are Pākehā a certain ethnic/racial origin? Who knows. But less than 2% of charities have ticked that box, so I doubt that is how charities are interpreting it. Australia also has its foibles. For example, it has separate categories for 'Children' and 'Young People' without telling us what the difference is between the two (New Zealand combined these categories). It also goes to the trouble of having separate 'men' and 'women' categories but unlike New Zealand it doesn't have a category for animals.
·
Excessive use of the ‘other’ beneficiary category. Perhaps one of the advantages of
Australia’s long list of beneficiaries is that charities are less likely to
create their own ‘other beneficiaries’ category. In New Zealand almost 4,000 or 16% of
charities listed an ‘other beneficiary’ as their main beneficiary (though well
over half of these unnecessarily repeated one of the official beneficiary
categories). The remaining “other”
categories described by New Zealand charities are specific and varied. There are common themes, some of which tend
to match the additional Australian categories.
For example, a lot of charities which used an "other" category identified their main beneficiaries as:
-
“school
children/students/university students”
-
“schools/universities”
-
“artists/musicians”
-
“women/women and children”
-
“hospital/hospice patients/people with cancer”
-
“offenders/ex-offenders”
-
“the local community”
-
various sports club members (such as golf,
tramping, deerstalking, bowling, croquet, canoeing, squash, bridge, rowing,
triathlon, equestrian, football, and motorsport)
-
commercial industries (such as deer farming, dairy
industry, pastoral farming, fruitgrowers, and oil and gas).
There is also the occasional unusual beneficiary category, such as “income
accumulation” or “land owners” or some rather annoying references to other
documents such as “see section 4.1 of trust deed”. Income accumulation is unusual if it is at
the extreme end of the scale. For
example The Charitable Foundation Of The Bishop Of Dunedin listed its main
beneficiary as “Nil current beneficiaries - still establishing capital
base”. The foundation had $11m gross
income in 2012, assets of $152m and equity of $119m, so potential beneficiaries
may well be left wondering when its
capital base will be established so it can start helping the community.
·
No use of “main beneficiary” or “date of change” box in Australia: The New Zealand charity regulator seems to take the beneficiary
question very seriously – not only do charities have to identify their
beneficiaries but they also have to identify their ‘main’ beneficiary and if
any of the beneficiaries changed, or if the main beneficiary changed, they must
specify the effective date the beneficiaries changed (they have three months to
notify the regulator after they become aware of this change). Australia takes a much more relaxed approach
and only requires charities to identify who was helped by the charity – there
is no ‘main beneficiary’ category and no date of change required.
International assistance
16% of Australian charities
said they worked to help people internationally. Over 150 countries were
listed, with New Zealand, the US, India, the Philippines and Papua New Guinea
the most popular.
New Zealand is not far
behind with 13% of New Zealand charities saying they either sent a percentage
of their funds overseas, made grants overseas, conducted international
activities or had an overseas area of operation (or a combination of these
factors).
The New Zealand regulator
asks charities to list the continent they operate in, rather than a specific
country (note to the New Zealand regulator: it would be great if that could
change in the future – country information provides more useful insights!) The continents listed in order of frequency
are Oceania, which includes Australia and the pacific islands (1,139
charities), Asia (995 charities), Africa (542 charities), Europe (405
charities), North America (297 charities), South America (282 charities) and
Antarctica (45).
The most unusual insight
here is that Australian charities list the US as the second most common country
that they operate in, whereas it might be reasonable to expect poorer countries
to rank above the US. New Zealand’s
priority list is less surprising, with North America ranking behind Oceania,
Asia and Africa, as you might expect.
Volunteers and employees
42% of Australian charities reported that they solely relied on
volunteers. At the end of their 2013 reporting period, these 3,000 charities
reported a total of 225,000 volunteers, along with 13,000 full-time employees
and 18,000 part-time employees. These figures will increase as more Annual
Information Statements are submitted.
By coincidence, 42% of New Zealand charities also reported that they
solely relied on volunteers. That is,
they did not record any paid (full time or part time) employees, but they did
record one or more volunteers or volunteer hours. However the surprise statistic from New
Zealand is that 18% (4,491) of total registered charities recorded that they
had neither volunteers nor paid employees.
Out of the 4,491, 3,900 still received some type of income. For example, Rescare Homes Trust recorded no
details about employees or volunteers, but disclosed gross income of $9m (and a
salary expense of $7m) for the year ending 31 March 2013. It is therefore likely that up to 3,900 (16%
of total charities) are not completing the volunteer and employee statistics
when they should be, so aggregate employee and volunteer numbers on the
register could be materially understated.
A further 591 charities (2%) appear to be inactive with no income and no
paid employees or unpaid volunteers.
The New Zealand register shows an aggregate of 413,000 volunteers,
112,000 full time and 440,000 part time employees. But as mentioned above, these figures are
likely to be understated due to a significant number of charities not
completing the “your people” questions on the annual form.
The extent of red tape and reporting
29% of Australian charities
that have submitted an Annual Information Statement indicated how much time per
annum they spent on reporting to Commonwealth, or state and territory
departments and agencies. This is an
optional section in the form, so 29% seems to be a good response rate.
Large charities indicated
that paid staff spent an average of 288 hours and volunteers spent 20 hours
reporting to government. For medium charities these figures were 135 hours by
paid staff and 94 hours by volunteers. Small charities relied much more heavily
on volunteers, with non-paid staff completing 70 hours of government reporting,
compared to 16 hours by paid staff.
How does New Zealand
compare? We don’t know because the New
Zealand regulator doesn’t ask the question.
Perhaps that’s where Australia’s regulator really stands out compared to
New Zealand. The ACNC is focused on
reducing red tape for charities, so it has an interest in measuring what the
burden is today and how it changes over time.
Or is there simply an assumption by the New Zealand government that
charities do not have a red tape problem?
It would be interesting to know the answer.
