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Strong Diverse Charities Are Good For Australia

There are 54, 000 charities registered with the Australian Charities and Not-for-profits Commission (ACNC). I am usually met with surprise when I quote that figure, and more often than not people respond by asking if we really need so many charities.

I have said it before and am happy to repeat that Australia is well served by its vibrant charity sector. Competitive and innovative charities benefit the community and the economy in the same way that competitive and innovative businesses benefit consumers.

Charities exist to benefit the community. They form under the principles and precedent set out in four centuries of charity law and with a right to freedom of association. We should pause before we suggest restricting the right of citizens to form civil society organisations across the vast landscape of the Australian continent. A quick view of their locations illustrates that they are located roughly in parallel to the spread of the Australian population.

Notwithstanding their right to association, it is important that charities operate effectively and make good use of donor, government and grant-maker dollars. In fact, the data shows that sector is proactive in the face of changing market forces and open to mergers with almost one in three not-for-profit boards discussing the possibility of a merger in the wake of a drive for effectiveness.

Sharing resources to meet common goals, fundraising for collaborative projects and the constant drive for innovation are just some of the ways that charities are rising to the challenge of operating in a competitive environment.

A recent report by the Australian Institute of Company Directors, the 2015 not-for-profit Governance and Performance Study, found that over 40 percent of not-for-profits subcontract some of their services to other not-for-profits and over a quarter of them share resources. Initiatives such as these demonstrate that this sector is actively working to make the most of their resources.

The not-for-profit sector has a proud history of innovating -- sometimes compelled by scarce resources, but always driven by a passion to improve the circumstances of others. By looking at the finalists for Google's Impact Challenge, you can see a selection of innovative projects, bred out of our competitive not-for-profit sector, that rival technology innovations developed by their for-profit counterparts. Initiatives like these show that the sector knows how to adapt, is harnessing new technology and is continuing to produce excellent outcomes for the greater good.

A vibrant and competitive not-for-profit sector that is not afraid to take prudent risks is good for charities and ultimately, good for the world in which we live.

In considering the number of charities, it is worth investigating their purpose, geographic spread, and impact. The Australian Charities Report shows that charities make a significant contribution to the economy. In 2014 charities had a combined income of $122.6 billion, they employed over 1 million workers (10 percent of the workforce), and they had over 2 million volunteers supporting their efforts.

The report also shows that almost 30 percent of registered charities are religious charities, such as churches, temples and mosques -- this is by far the largest subsector of charities. The next biggest group is education and research, which includes independent schools, universities and child care centres. The sectors most commonly associated with charities, such as health, social services and development and housing only comprise between six and eight percent of the charity sector respectively.

In any Australian town, local charities may include the community's neighbourhood watch program, community centre, churches, support groups, the scouts and guides, childcare centre, the RSL and even not-for-profit aged-care facilities.

An international comparison provides evidence that Australia has fewer charities than similar countries around the world. In Australia there are approximately 444 people per charity, whereas in the USA the figure is 274 and in New Zealand it is 174.

Australian charities deliver wide ranging services both here and abroad. They enhance the fabric of our society and their work makes the world a better place. The not-for-profit sector is crucial to our culture, economy and society -- and I am confident that it will continue to adapt, innovate and evolve.

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