During a meeting with the CEO of one of Australia’s largest corporate foundations recently, I raised the question of whether there are too many charities.
She felt the question is especially relevant in Australia today and needs to be addressed. This issue is also discussed frequently by philanthropists.
No-one stops coffee shops opening, whether there are others in the same vicinity. The best will succeed, the rest will fold. Should charities have similar freedoms? Does the private vs public funding make a difference?
This is not an article about amalgamation and creating bigger charities. Rather it is on the proliferation of new charities, some paralleling almost exactly existing charities.
Recent research by QUT Centre on Philanthropy and Nonprofit Studies highlighted that there are 21,957 charities with Deductible Gift Recipient (DGR) status and 48,000 income tax exempt charities (ITECs) in Australia, of which more than 18,000 were founded between 1990 - 2005. Half the DGRs have less than $55,304 in receipts.
In the US, Internal Revenue data shows there are over 1 million charities, including over 700 breast cancer charities. 40% of US charities were established in the decade between 1995- 2005 and most have revenues of less than $US25,000. In the UK 60% of registered charities have an income of £10,000 or less and 8% of charities receive 90% of annual income.
Per head of population, Australia has fewer charities than either the UK or the US, around one charity for every 437.5 people! Nevertheless, there is a similar trend and it’s almost inevitable that some of the international issues will surface here before too long.
In the US in 2003, for example, the number of new charities increased by 5.6% while 4.5% closed. What does this do for public confidence in charity stability and accountability?
Most growth was among organisations with a religious focus, followed by educational institutions, social services groups and arts and cultural organisations. The rapid growth in charities has meant the rise of issues such as overlapping services, challenges in differentiation and getting new causes heard above the charitable cacophony.
One to think about?
Filed under: charities, fundraising, nonprofit, philanthropy, regulation | Tagged: fundraising, nonprofit, philanthropy, regulation | 2 Comments »