Calls for stricter charity approval process

Fundraisers are calling for a deceleration on new charity approvals, saying the hundreds of new organisations being registered each month is resulting in more competition for funding, and causing confusion among funders on where best to spend money.  

According to the Australian Charities and Not-for-profits Commission (ACNC), Australia currently has 57,000 registered charities, with the number growing by four per cent each year.

Katrina Hosie, head of fundraising and philanthropy at Very Special Kids, told Pro Bono News after 12 years in the sector, it was becoming increasingly difficult to secure funding, which she put down in part, to the fact there were so many charities now vying for the same, limited amount of money.   

“With so many new charities coming in at such a rapid rate, the increase in competition for finite government and philanthropic funding is noticeable,” Hosie said.  

“You can put in so much effort and produce a high quality submission, but the return on your effort can be very low in actual dollars.”

She said it was a problem that so many organisations were working on the same issue, making it hard for effective programs to be funded properly.           

“This makes it really confusing for funders as to who they should support, and to work out which ones are running the most effective programs,” she said.

An ACNC spokesperson told Pro Bono News it took the view that there will be the right number of charities in Australia, when those who want to support charitable causes have enough information to decide whether and who to support.

“We strongly recommend that people who are considering starting a charity do some background research to see if setting up a new charity is the best way to achieve their goals,” the spokesperson said.  

“Before starting and registering a new charity, applicants should search the ACNC Charity Register to see what existing charities are already operating for similar purposes.”

They also said that charities were free to form and re-form to achieve their charitable ends efficiently.

While Hosie said merging was a great way to achieve shared outcomes, it was an expensive and timely exercise that wasn’t always guaranteed to work.

She said organisations like the ACNC, or the funders themselves, could facilitate collaboration between similar organisations.

“Charities are doing the best they can to identify other charities doing similar things, and have those conversations but there is limited time to be able to do that and also a limited view on the landscape,” she said.

“The funders themselves and also the ACNC have a fantastic view to look and identify which charities are focusing on what issues, where.”

Last financial year, the ACNC received 3,320 new applications from organisations wishing to register with the commission as a charity.

Of the applications received in the last financial year, 73 per cent of applicants were successfully registered as a charity.

Hosie said it was the job of the ACNC to better evaluate the charities it was approving.

“I think they really need to take a very solid stocktake of the NFP sector, and work out exactly who’s doing what, and identify gaps before approving new charities,” she said.

But the ACNC spokesperson said it assessed applications for charity registration against the ACNC Act and Charities Act, and did not set the requirements for registration.  

“A change to the requirements for charity registration would involve a change to the legislation, and is therefore a matter for government,” they said.

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