Report Slams Australian Charities Over Fundraising

Seven high-profile charities “spent more than 40 per cent of donations on the cost of fundraising”, according to a report in Brisbane's Courier Mail on Australian Not for Profit (NFP) organisations that spend large amounts of their donations on administration costs.

Examples of fundraising activities can include telemarketers, street fundraisers and events such as dinners and balls.

According to the report, the NFP organisations that spend 40% or more of their fundraising revenue on the cost of fundraising are:

• Surf Life Saving Foundation – which uses 62 per cent of its $23.8 million fundraising revenue on administrative costs
• CareFlight (NSW) Ltd – 51 per cent of $11.2 million
• Make-A-Wish Foundation – 51 per cent of $11.9 million
• Days of Difference Foundation – 48 per cent of $1.5 million
• SIDS and Kids NSW – 47 per cent of $1.15 million
• Children’s Medical Research Institute – 46 per cent of $6.7 million
• Barnardos – 40 per cent of $4.49 million.

Australian NFP organisations that spend less than 10 per cent of their fundraising revenue on the cost of fundraising:

• Diabetes Australia – Just 2 per cent of $1.4 million
• Royal Flying Doctor Service of Australia – 3 per cent of $4.7 million
• Alzheimer’s Australia NSW – 3 per cent of $5.2 million
• Arthritis Foundation of Australia – 7 per cent of $2.3 million
• Australian Cancer Research Foundation – 7 per cent $7.6 million
• Guide Dogs NSW/ACT – 9 per cent of $18.5 million

The Gillard Government’s $53.6 million reforms of the NFP sector include the establishment of a national, one-stop regulator for the Not for Profit sector – called the Australian Charities and Not-for-Profits Commission (ACNC).

The Courier Mail says one of the first tasks of the ACNC – which commences operations from July 1st, 2012 – “will be to implement a "one-stop shop" information portal that will force charities and benevolent trusts to disclose financial records like never before.”

Rob Edwards, CEO of the Fundraising Institute of Australia, told the Courier Mail that a 2004 FIA (Fundraising Institute of Australia) study found that “too many factors determined the cost of fundraising, which made ratios "meaningless"."

The new regulator, to be called the Australian Charities and Not-for-profits Commission (ACNC) will commence operations from July 1st, 2012, and will initially be responsible for determining the legal status of groups seeking charitable, public benevolent institution, and other NFP benefits on behalf of all Commonwealth agencies.

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