Billion-dollar drop in donations to charity

Education charities had the largest annual revenue (Bigstock)

Australians are making fewer donations to charity, despite ranking as the sixth most generous nation in the world, The Age reports.

The Australian Charities Report 2016, released yesterday, shows charities are relying more on membership fees and user-pays services for income.

Donations and bequests have dropped almost $1 billion, from $11.2 billion to $10.5bn over the past year, the report showed.

Even with donations falling, the country's 52,000 charities increased their revenue to $142.8bn in the past year.

Nearly half of all charity revenue (49.7 per cent) was generated through membership fees, user-pays services and other sources, the report showed.

Government grants and contract payments accounted for 43 per cent of revenue, while donations and bequests generated just 7.3 per cent of the sector's income.

The news follows a call by the Australian Competition and Consumer Commission last month for charities to be more transparent about their use of third-party, commission-based fundraisers.

The unsolicited face-to-face fundraising commonly called "chugging" or "charity mugging" is widely acknowledged in the industry as the most cost-efficient way to obtain large volumes of new donors, the ACCC said.

But it's also a practice many people find annoying because of the high-pressure tactics that can be used.

The ACCC said 26 per cent of charities relied on donations and bequests for more than half of their total annual income in 2015.

With more than 50,000 registered charities in Australia – one for every 478 people in 2016 – donations remain a significant source of charity income.

The Australian Charities and Not-for-profits Commission said it did not attribute the drop in donations to street collectors.

The ACNC said it was certain total revenue had increased but was unable to say by how much given new reporting procedures for small charities since the 2015 report.

Charities that provide education services, such as universities and non-government schools, had the largest annual revenue.

The group makes up 18.6 per cent of charities, but accounted for 45 per cent of the sector's total revenue.

The most common type of charity is religious groups (31 per cent). However, these collect only 6.6 per cent of the sector's total revenue.

FULL STORY

Australians making fewer donations to charity, report finds (The Age)

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