Information and frequently asked questions for charities and the public
Whether or not there are too many charities in Australia is a question that elicits a range of perspectives both from within the charity sector and the public more broadly. The Australian Charities and Not-for-profits Commission (ACNC) takes the view that there are not too many charities in Australia. This information sheet and set of frequently asked questions explains why.
What these FAQs cover
- Background on the number of charities in Australia
- How many charities are there in Australia?
- How does Australia compare to other countries?
- Isn’t 54,000 charities too many?
- What types of organisations make up Australia’s 54,000 registered charities?
- How big are the majority of Australia’s charities?
- Where are the majority of charities based?
- Are there too many charities doing the same thing?
- Are there too many charities competing for the same donations?
- Should charities that do the same work merge?
- If I want to start and register a new charity, does it matter if there is already a similar charity registered?
- If people keep starting new charities, won’t the overall number keep growing?
- What are the benefits of having such a diverse charity sector?
In Australia there are approximately 54,000 registered charities. They make up a diverse sector working across Australia and internationally in a broad range of areas, including health, education, social welfare, religion, culture, human rights, the environment and animal welfare. The precise number of registered charities changes from day to day as new charities are registered and others wind up, merge, or even have their status revoked.
As a total, 54,000 sounds like a large number, but when you consider all the different types of organisations that make up Australia’s registered charities, it begins to feel more understandable. Australia’s registered charities include many organisation that people may not think of as charities: universities, aged care centres, child care centres, surf life-saving clubs, non-government schools, and religious institutions, to name a few.
Interestingly, per capita, Australia’s 54,000 registered charities is actually a lot less than other similar countries. For example, New Zealand’s 27,000 charities works out to be 1 for every 170 people, more than 1 million charities in the US gives a figure of 1 for every 268 people, while Australia has 1 registered charity for every 440 people.
The law in Australia does not set a limit on the total number of charities that can be registered, or the number of charities that can be registered with the same or similar purposes. Citizens have a right to freedom of association and this is something that we value in our society. Charities and not-for-profits are often the vehicles that citizens use to form associations and undertake activities. They are rightly independent of the state and a cornerstone of civil society. As the regulator, the ACNC needs to have legitimate grounds on which to refuse a charity application. If an organisation applies to be registered as a charity and it is eligible, the ACNC must register it.
Discussions about this issue show that it is not only the total number of charities that concerns people. In many cases, the underlying concern that people have is with the number of charities they feel are doing “the same thing”, duplicating efforts and competing for the same donations and funding.
The ACNC understands that there are instances where charity resources could be used more effectively for better outcomes. The ACNC supports an effective, sustainable and innovative charity sector, and recognises that there is often room to improve. Charities should regularly assess their efficiency and effectiveness, which may mean collaborating on projects or even merging with other charities to achieve better outcomes. Such decisions, though, should be made by the charities themselves, rather than being dictated by the regulator.
However, there are also benefits in having a diverse charity sector comprising many charities.
One of the important facts to note is that around two-thirds of Australia’s registered charities are small organisations with an annual revenue of less than $250,000 and operations in only one state. Having a large number of such charities can lead to innovation, new ways of tackling complex issues, local solutions to local problems, and specialised expertise for niche issues. Also, small charities are often effective fundraisers through local networks and can engage local volunteers eager to help their community.
A diverse charity sector also brings consumer choice and competition. While some commentators refer to competition for funding as a negative thing in the charity sector, competition may encourage better evaluation of outcomes, increased transparency, and more effective performance. Competition in the private sector is encouraged and accepted; similarly, competition can benefit the charity sector.
Research shows that charities, in general, are adaptive and capable of responding well to changes in funding, donation levels and market forces. In August 2016, the Australian Institute of Company Directors (AICD) released its 2016 NFP Governance and Performance Study which found that close to half of not-for-profit directors surveyed had either been involved in merger discussions in the preceding year, were currently involved in a merger, or had just completed a merger. The research also found that 70% of those surveyed reported collaborating with others to advocate for the sector or beneficiaries, 43% subcontracted some services, and 39% had arrangements to refer or service clients. These figures illustrate an awareness in the sector of the need to adapt to use charity dollars efficiently and effectively to continue to achieve outcomes.
In October 2016, there were approximately 54,000 registered charities in Australia. However, this figure changes from day to day as new charities register, others wind up, merge or have their status revoked.
This total figure is lower than the approximately 56,500 entities originally registered as charities when the ACNC was established in December 2012. In recent years, approximately as many charities are winding up or closing as new charities are forming, and the figure of 54,000 has remained fairly static.
Australia has fewer charities per person than comparable countries, as demonstrated in the table below. Charities must also cover a greater geographic area in Australia than in many of the comparable countries.
Number of charities (approx.)
Number of people per charity (approx.)
England and Wales
How do we determine what the optimum number of charities is? Each one is different – they do different things, in different places, in different ways, for different people. There may be some overlap, but there are also plenty of gaps to fill.
As Commissioner Susan Pascoe AM has previously written, we can only say that there are enough charities when we are confident that we are efficiently and effectively meeting community needs not covered by the government across the entire country. It may be impossible to know what this number of charities would be.
The charity sector is made up of many types of organisations which differ in size, location, reach, purpose and methods. In reality, what we call the ‘charity sector’ isn’t really a single homogenous ‘sector’ at all; it comprises a variety of industries, causes, services and organisation types. Charities range from tiny, volunteer-run groups with no funding or revenue, to very large organisations with complicated business structures and operations.
Many people would be surprised to learn that a significant proportion of the 54,000 registered charities are organisations that they would not ordinarily think of as charities. In fact, many of the organisations and services commonly found in towns all over Australia are likely to be registered charities: from local religious groups, rural fire services and Returned & Services Leagues (RSLs), to surf life-saving clubs, child care groups and private hospitals.
These are just some examples of the types of organisations registered as charities in Australia:
- religious organisations
- parents and citizens committees or associations
- universities and research organisations
- non-government schools
- animal welfare organisations
- international aid agencies
- family violence support organisations
- aged care centres and child care groups
- cultural institutions such as museums and galleries
- environmental protection groups
- legal aid centres.
It is also worth noting that some organisations consist of a number of separately registered charities. These individual entities may fall under a larger parent body, but they each have their own ABN and are registered as separate charities. Some examples include:
- The Salvation Army – 33 separately registered charities
- Melbourne University – 10 separately registered charities
- Surf Life Saving Australia – 264 separately registered charities
- Lifeline – 32 separately registered charities
- RSLs – over 500 separately registered charities
Almost two-thirds of Australia’s registered charities (63%) are classified as small, with annual revenue of $250,000 or less. Of this majority, approximately one-third is very small, with annual revenue of less than $50,000. Also, just under half of Australia’s registered charities (44%) employ no staff and are entirely volunteer-run.
Only a minority of charities are medium (17%) with annual revenue between $250,000 and $1,000,000, or large (19%) with annual revenue of over $1,000,000.
Many charities are small, grassroots organisations comprising volunteers that have come together to service a local or specialised need; for example, groups undertaking conservation work near a local creek, or services for a local religious congregation. In most cases, these charities are not competing for the same funding dollar as others.
Australia is a large country, with a geographically dispersed population – 31% of Australians do not live in one of the major cities. Some charities feel that they better meet the needs of the community if they are located in remote, rural or regional areas.
The distribution of charities is similar to the population – just under two-thirds of charities are located in major cities (65%), while a substantial proportion (31.2%) are registered in regional locations, and a smaller minority (3.8%) are based in remote areas.
Most charities are meeting a community need and generally not doing the same thing in the same area as another charity. However, there are instances where there is duplication.
Undertaking the same charitable activities to serve the same beneficiaries in the same area can be inefficient and a duplication of effort and funds. In such cases, it may be best for the charities involved to consider whether it would be beneficial to collaborate, or even merge. A charity’s committee or board should always consider the best ways to fulfil its purposes. It may be that continuing to run the charity is still the best way for it to fulfil its purposes, or it may be more effective to merge or wind the charity up and transfer the funds and assets to another charity.
No one stops coffee shops from opening if there are others in the same area – the best ones will succeed and the rest will fold. Should charities have similar freedoms? Does the difference between private and public funding make a difference?
There is a difference in that charities are the stewards of donated funds, philanthropic grants or government contracts which are provided to be spent for the public good. However, charities also raise their own funds through trading, fees and investments. There is an onus on a charity to be able to demonstrate efficient and effective use of its money which can lead to continued or increased support. In this context, competition for donations or grants is not necessarily a bad thing as it is likely to motivate a charity to better demonstrate its impact and effectiveness.
There has been much debate about whether charities that do similar work in the same area should merge. In some cases merging will bring efficiencies and expand the breadth of a charity’s service, but it may be not be the right answer for every charity.
The responsibility to decide to merge sits with a charity’s responsible people (its committee or board). There are no requirements or conditions which dictate that a charity must merge or consider merging. When charities merge, it is often to consolidate resources or take advantage of new funding arrangements or contracts. In some cases, charities may collaborate on projects or share resources as a way to improve efficiency and effectiveness.
For more comprehensive guidance on charity mergers, read our tips at acnc.gov.au/merge.
If I want to start and register a new charity, does it matter if there is already a similar charity registered?
Before starting and registering a new charity, we strongly recommend checking the ACNC Charity Register to see what charities are already operating for similar purposes. It is likely that there will be a registered charity already doing what you are thinking about doing. In such a case, giving funds to the established registered charity may be the best thing to do.
You may be able to give funds to a charity on ‘special trust’, for example, in the name of a loved one, and you may even be able to have a steering committee for the trust. You may be able to set up a subfund within a community foundation to help pursue your goals. There are a range of ways you can contribute to a cause without necessarily starting a new charity. Starting and running a new charity is hard work, and raising funds is difficult. This may not be the best way to achieve your objectives.
No. The experience of charity regulators in other countries shows that as new charities register, a similar number wind up. The ACNC’s experience over the first few years of its operation tells a similar story. When the ACNC was established there were approximately 56,500 registered charities and in August 2016 there were approximately 54,000. The ACNC has seen this number remain relatively steady over the past couple of years.
Cutting back on charity services for the sake of arbitrary numbers does not serve communities well. And there are a number of benefits of having a diverse charity sector.
Local charities may be able to engage their communities in ways that national or international charities cannot. We see this in the ability of smaller, local charities to recruit volunteers and collect donations from people who may not otherwise get involved or donate. For example, parents and citizens committees are generally run by local parents, and their funds are raised through fundraising drives in their neighbourhoods.
Each charity approaches its goals in its own way. Where there are several charities working towards similar goals, there is capacity for innovation which can lead to new solutions. While one charity may take the conventional approach to addressing an issue or a need, another may research new methods, and a third may address the issue at a legal or political level.
Charities focused on particular purposes often inspire people affected by that purpose, particularly if the charity is operating locally. For example, a person who experienced bullying may be more motivated to volunteer or donate to a charity that works to prevent bullying in schools than to support a charity focused on general community welfare.
- ACNC Charity Register
- Australian Charities Report
- Australian Institute of Company Directors: 2016 NFP Governance and Performance Study: Raising the Bar