More Than Charity

Victoria’s community sector charities work to support and connect people, strengthen communities and advocate for a fair and just society. More than charity, they also make a significant economic contribution to the state, forming an $11 billion industry that employs more than 135,000 people. In regional centres, community sector charities often act as the key employer.

These findings turn on its head any perception that the community sector is a cost to society. Rather it is a key asset.

The sector is made up of a vast range of organisations, both in terms of their size, and the services they provide. They also generate income from a wide range of sources. These organisations face a myriad of reporting requirements, which in many cases are becoming ever more complex, time-consuming and costly.

This report details the economic contribution of Victoria’s community sector charities, analysing the data these organisations have provided to the Australian Charities and Not-for-profit Commission (ACNC) in 2014 Annual Information Statements. It also details the reporting burden being borne by organisations. In the future many of these reporting obligation issues could be addressed through state and Commonwealth governments working together with the community sector to streamline reporting and accountability mechanisms.

 

Key findings

• Victoria’s community sector charities form an $11 billion industry.
• Victoria’s community sector charities draw on a diverse range of funding sources, with just over half their income (54%) derived from sources other than government funding, including donations, bequests and other revenue generation activities.
• Just over half (52%) of Victoria’s community sector charities receive income from government grants and the vast majority (86%) generate income from other revenue sources (including service fees and charges).
• Employee expenses make up the majority (54%) of community sector charities’ expenses.
• The majority of community sector charities operate balanced budgets (68%). A further 21% operate surplus budgets.
• Victoria’s community sector charities employ 134,958 workers across the state.
• Almost a quarter (22%) of community sector workers are employed casually, and therefore face an insecure employment situation.
• Victoria’s community sector charities make a strong economic contribution in regional areas, and provide significant employment in these areas.
• ACNC and case study data show Victorian community sector charities face a range of reporting and compliance challenges including:
  • Spending on average 291 paid staff hours and 47 unpaid hours a year reporting to either Commonwealth or state government agencies.
  • Large organisations on average spending 523 paid staff hours and 80 unpaid hours on reporting obligations.
  • Social services and other health service delivery subsectors spending the most time and bearing the greatest cost meeting reporting obligations, spending far more time and money meeting reporting obligations than, for example, the aged care subsector, despite having far lower annual incomes than the aged care subsector.
  • Spending an estimated $23 million across the sector to fulfil reporting obligations.
  • Multiple and duplicated reporting and auditing requirements.
  • Inconsistent auditing requirements of the same standards from different funding bodies.
  • Being required to provide information to funding bodies that is irrelevant to service quality improvement and delivery.
  • Financial reporting requirements that do not equate to the level of funding or the risk associated.
  • Inconsistency in funding acquittals and reporting formats.
  • Inconsistency in definitions between funding streams.
  • Frequent changes in reporting requirements.