ACNC Strategy A more visible charity market Gary Johns ACNC Commissioner Collins & Co 2019 NFP Conference 14 March 2019 KW intro DR intro

Charity registrations grow by 3.9% per annum* DGR *The calculation of an annual rate of change assumes: 1. same number of annual registrations post DGR as occurred in the preceding years, 2. that revocations remain low as for 2018-2019, and 3. discount the one-off DGR cohort

New website to improve public engagement* * Section 1.56 ACNC Bill 2012 (Explanatory Memorandum)

Future direction The Act directs the Commissioner to have regard to… ‘the need for transparency and accountability of the…sector to the public (including donors, members and volunteers…) by ensuring the public has access to information” * Section 1.89 ACNC Bill 2012 Explanatory Memorandum.

Provide useful information Visibility – provide a common language for charities and donors Bring 2nd Object to life – publish sector-wide annual statistics

The acnc register is a public resource… 15 webinars - 3,106 webinar registrations, 207 registrants per webinar Charity Chat podcasts - 13 episodes, 13,000 downloads Commissioner’s Column - 11,000 subscribers Commissioner’s Quarterly - sent to every registered charity 11 per cent increase in Twitter followers, 10 per cent increase in LinkedIn group members, and in Facebook ‘likes’

1. Visibility The Holy Grail of useful information is a common language based on programs, which charities, donors and beneficiaries may find useful in their decisions * Section15-10 ACNC Act 2012.

Donors ask, ‘what do charities do?’ Search the register to find… What Who Where Cannot find this on the register… Only if these are input by charities can they produce the output sought by donors…

Ais – new answers to old questions

Program marketplace Map programs using a taxonomy of charitable causes, developed by Our Community,* to drive a search function on the Register An option for charities to answer the AIS ‘activities’, ‘beneficiaries’ and ‘where’ questions and improve their visibility Questions 9, 11 and 12 answered for each program *CLASSIE system that was developed by Our Community.

Further refine programs… Type of charity work Finance/resourcing of other charities Provision of buildings/facilities Providing services Advocacy/awareness Representing other charities Providing information to the public Conducting research

2. Bring 2nd object to life (1)(b) to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector* The concepts, robust, vibrant, independent and innovative, are not defined in the Act, the Explanatory Memorandum, or the Second Reading Speech To support and sustain these elements, it is essential to understand how they can be measures and the results reported What statistical series could the ACNC publish to bring these concepts to life? *Section 15-5 ACNC Act 2012 The Minister’s Second Reading Speech, 23 August 2012, contained the phrase; ‘The government is dedicated to supporting a strong, vibrant, diverse and independent NFP sector’, and also repeats the words in Object 2.

Measures for 2nd object…annual series part 1 Specification Previously published? Vibrant Revenue Percentage growth in each relevant revenue element (collected in AIS) by subtypes and size   Australian Charities Report 2016 (not subtypes or size) Net income ratio 1 Australian Charities Report 2016) Asset ratio 2 Current ratio 3 Registrations Compare number of new registrations for financial year by subtypes and size 4 Growth and Change in Australia’s Charities 2014 to 2016 (not by subtypes) 1 Did charities make a surplus or deficit? 2 Are charities’ assets worth significantly more or less than their liabilities? 3 An indicator of short-term financial capacity. 4 Look at charities a year after registration to analyse size.

Measures for 2nd object…annual series part 2 Specification Previously published? Robust   Revocations Number of revocations each year by subtype and size Or number of revocations divided by number of registered charities Annual Report (not by subtype or size) Longevity Age of registered and revoked charities by subtype and size5 No Assets Total asset holdings by subtypes and size Australian Charities Report 2016 Return on assets 5 Snapshots if age of revoked charities is too narrow a group.

Measures for 2nd object…annual series part 3 Specification Previously published? Independent 6   Source of funds Percentage of funds by revenue element (collected in AIS) by subtypes and size Australian Charities Report 2016 (not subtype) Highly regulated charities 7 Percentage of all charities by sector and size No Closely held organisations Charities controlled by family members or same address 8 Legal structure No (ACNC has data on a charity’s legal structure) 6 May analyse more information on ACNC approved reporting groups 7 Draft definition of highly regulated charities include DET, ORIC and other sectors. 8 At this point, a charity will be defined as being closely held if 50% or more of all active responsible persons have the same surname/address.

Measures for 2nd object…annual series part 4 Specification Previously published? Innovative Mergers and acquisitions Number of voluntary revocations (due to mergers and acquisitions) by subtypes and size 9 The Growth and Change in Australia’s Charities 2014 to 2016 (details on voluntary revocations, but not subtypes or size) Potential for new AIS question Responsible persons Turnover of responsible persons 10   No Annual series to be a guide to performance of the market on the concepts in 2nd Object The measures should be simple and robust Prefer data already gathered, some new ‘activity’ questions … Take time to educate, and explain the measures … Measures are sector-wide, not charity-specific 9 It would be good to have a profile of merged charities, it would provide further insight as to developments in the sector. 10 Charities are already required (under their duty to notify obligations) to notify the ACNC of changes to responsible persons.

KEEP IN TOUCH AND CONNECT WITH US acnc.gov.au 13 ACNC (13 22 62) 9.00am – 5:00pm AEST facebook.com/acnc.gov.au @acnc_gov_au youtube.com/ACNCvideos ‘Aussie Charities and NFPs’ There are currently over 56,000 registered charities in Australia