Australia

ACNC Activities | August

Release of The Australian Charities Report 2018

Australian charities’ revenue grew by more than 6 per cent in 2018, more than triple the Australian economy’s counterpart figure.

This is a key finding of the just-released ACNC’s Australian Charities Report 2018.

The report documents the contribution of Australian charities to the economy and communities both at home and abroad.  It analyses information in charities’ annual information statements.

Key findings include:

  • In the 2018 reporting year charity revenue grew by more than 6 per cent, significantly more than the Australian economy in the same period (1.9 per cent)
  • Australia’s charities, overall, operated at a surplus, supported by substantial assets
  • Revenue was up by $9.3 billion, from $146.1 billion in 2017 to $155.4 billion in 2018
  • Donations rose to $10.5 billion, an increase of $600 million from the previous year
  • The largest charities (0.4 per cent of all charities) reported revenue of more than $100 million
  • Assets increased by $18.7 billion to $323 billion
  • Almost half of charity revenue came from government (47 per cent), and more than a third (34 per cent) was generated by providing goods and services (some of which were subsidised by government funding)
  • Most charities were small (66 per cent) generating less than $250,000 in revenue, followed by large (18 per cent) with revenue of more than $1 million, and medium (16 per cent) with revenue of $250,000 or more but under $1 million
  • Charities employed more than 1.3 million people
  • Volunteer numbers across Australia’s charity sector increased to 3.7 million, up 12 per cent on the previous year’s figure of 3.3 million
  • Half of all charities operated without any paid staff
  • Charities spent $81.1 billion on employee expenses, up 8 per cent on the previous year’s figure of $74.8 billion, and
  • The most common activities for charities included religious, primary and secondary education, grant-making, social services and aged-care services.

The  Australian Charities Report 2018, the sixth edition, provides fascinating insights.

Governments | Using scholarship funds

Many non-government schools have asked the ATO if they can use DGR-endorsed scholarship funds to provide fee relief to enrolled students during COVID-19.

The ATO has advised that DGR-endorsed scholarship funds may be used only to award scholarships for reasons of merit or equity and must be open to individuals within a region of at least 200,000 people.

A scholarship fund cannot be used to provide fee relief to families that are unable to pay their school fees, even if only for a limited period.

Scholarships can be awarded only in a way that is consistent with tax law and the governing document of a fund.

Amendments to encourage increased grants

Assistant Minister for Finance, Charities and Electoral Matters Zed Seselja has announced that the federal government is creating an incentive for philanthropic funds to support charities in times of need.

A recent JBWere report estimated that charitable giving might decrease by 7.1 per cent in 2020, and by a further 11.9 per cent in 2021 because of the pandemic.

‘I will be amending the ministerial guidelines for public and private ancillary funds to provide a credit for funds that make total distributions in 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions.  The credit – equal to half the percentage points by which the distributions exceed the minimum – may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until [it] is exhausted,’ the minister said.

Mr Seselja also declared COVID-19 a disaster for the purposes of establishing Australian disaster-relief funds as DGRs, allowing them to receive tax-deductible donations.

‘This declaration will allow funds that are established for the relief of people affected by the COVID-19 pandemic to receive tax-deductible donations, and greater assist their communities.’

Donations to the funds will be tax-deductible when made within two years.

Disaster-relief funds will need to apply for formal endorsement with the ACNC.

For further information click here.

Bodies coordinate philanthropic response

The Australian Communities Foundation and Philanthropy Australia have partnered to provide a national funding platform to coordinate the philanthropic response to COVID-19.

NFPs are encouraged to register their COVID-19-related funding needs so that philanthropic funders can understand the granting opportunities available and respond to the critical needs of the sector. Register here.

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