Vic community charities boom, despite crippling red tape burden

Victoria’s community sector charities are contributing billions to the state’s economy and creating thousands of jobs, despite suffering under convoluted and expensive reporting requirements, a VCOSS analysis has determined.

More Than Charity analysed financial data for more than 3,500 community sector charities operating across a range of service areas, including aged care, emergency relief, mental health services and domestic violence services.

It found that, on average, organisations spent about 300 hours to meet government reporting obligations at a cost of more than $23 million each year.

“That’s the equivalent of having one person working exclusively on reporting for nine weeks straight, each and every year,” VCOSS CEO Emma King said.

“These are organisations that help the vulnerable and disadvantaged. It’s time and money that would be better spent actually delivering better services.”

The report indicates the financial cost of compliance would actually be more than $23 million if other factors—such as the costs of auditors, software systems and staff time entering data into client management systems—were also taken into account.

Ms King acknowledged reporting to governments is important to ensure taxpayers get value for money, but warns balance is desperately needed.

“The cost of reporting could be cut by streamlining reporting requirements within and between government agencies,” she said.

“Definitions regarding the delivery of services, how outcomes are measured and even basic accounting terms should also be standardised.”

The report also highlights the immense economic value of Victoria’s charitable sector. The sector generates about $11 billion of new economic activity annually and employs 135,000 people. That’s more than the state’s mining, automotive manufacturing, media, IT, telecommunications and utility sectors combined.

In regional centres, community sector charities are often the key driver of local employment too.

“These findings turn on its head any perception the community sector is a ‘cost’ to society,” Ms King said.

“Rather, the sector is a key social and economic asset. It runs efficiently under immense pressure, and delivers considerable value.”

“Community sector charities should be valued and supported, not buried in red tape.”

CASE STUDY — A CRIPPLING BURDEN FamilyCare offers family, carer and disability support services in the Shepparton region. It receives significant funding from the Victorian and Commonwealth Governments. The organisation complies with five separate quality standards in order to retain its funding One of these standards is then audited by both the state and federal governments. Reviews of those standards often cover the same areas, are not coordinated and sometimes produce conflicting recommendations about compliance.