Donations held up during the pandemic – but it came with a rise in expenses for charities

The eighth Annual Charities Report released on Tuesday shows revenue, donations and expenses were all up in 2020.

Charities’ revenue increased by more than $10 billion in 2020 but this was accompanied by a rise in expenses to the tune of $10.2 billion, the latest Australian Charities Report shows.

Released on Tuesday, the eighth annual report is based on the annual information statements of more than 49,000 charities from the 2020 reporting period. 

In good news for the sector, the report showed donations rose by 8 per cent, to $12.7 billion over the period.

However this was concentrated mainly in the largest charities, with the top 10 charities accounting for 17 per cent of the entire sector’s revenue from donations. 

Dr Gary Johns, Australian Charities and Not-for-Profit Commission outgoing commissioner, told Pro Bono News the increase in donations came in response to the 2019/20 bushfires.

“The aftermath of the bushfires brought out the best in charities and public support for charities,” he said. 

“We saw charities step up and do what they do best: provide essential services to thousands of people in need. And we saw the public step up and help this effort with hundreds of millions of dollars raised for bushfire relief.”

He said 2020 had been “a landmark year for the sector”.

“Pleasingly, the report shows that we do have a resilient charity sector. It remains hugely important economically and employs more than 10 per cent of Australia’s workforce,” he said.

But the data also points to the struggle that many charities faced during the pandemic.

It shows that 650 charities did not conduct activities during the year because of COVID-19.

Johns told Pro Bono News that many charities also joined forces with changes in reporting showing that there were quite a few mergers and acquisitions.

“This was clearly to deal with the multiple issues of the pandemic and has worked well for many charities, combining administrative and knowledge resources,” he says.

Overall, charities’ revenue during the period was $176 billion – an increase of more than $10 billion, which came predominantly from government. However, expenses also increased by $10.2 billion, with the disruption of the pandemic leading to charities incurring additional costs.

Approximately half of the sector’s expenses were employee expenses – with the report also revealing that the proportion of staff employed part time and full time increased in the 2020 reporting period, while the proportion of staff employed in casual roles reduced.

This was accompanied by an increase in government support.

The report shows JobKeeper payments to ACNC registered charities supported an estimated 331,000 individuals in the period between April 2020 and September 2020. This reduced to approximately 128,000 individuals between October 2020 and December 2020, and 86,000 individuals between January 2021 and March 2021.

In total, revenue from government increased by more than $10 billion over the year, bringing the total to nearly $90 billion – more than half (50.4 per cent) of the total revenue for the sector.

Coming alongside this, there was also an increase in the proportion of charities that reported receiving revenue from government – rising to 47 per cent in the 2020 period.

Other major revenue sources were goods and services (32.5 per cent) and donations or bequests (7.2 per cent).

See the full findings here.