This study examined the ACNC data provided by charities headquartered in Western Australia.

Summary and Key Findings

There is strong evidence of service contraction and financial pressure being faced by WA’s charities in the 2018 ACNC data with negative impacts on service mix and a greater risk to service users.

This is the second report in our series. This study examined the ACNC data provided by charities headquartered in Western Australia. These data relate to the 2018 Annual Information Statement submissions and we compared them with the 2015 AIS data reported on in our first report in 2017.

Key findings

  • There was a net increase in the number of charities of 10.5% or 356. 743 charities wound up and 1,099 were established, with a loss of 9,356 employees by head count.
  • Services are likely contracting as evidenced by:
    • The service mix contracted by 45 – charities provide less service types.
    • The beneficiary mix contracted by 53%.
  • Job quality has reduced as aggregate Full- and Part-time jobs have fallen in total by 1,136 or 1.33% while casual employment is up 21.39%.
  • Aggregate profitability has fallen by 49% highlighting funding levels are likely insufficient to recover costs of service

These top line results raise concerns that the sector is under significant financial pressure, is reducing service types offered and, so, changing the service mix.

Therefore, there is likely growing unmet demand for services and supports.

Because of very poor data assets and the lack of a co-designed industry plan, this contraction is highly unlikely to be recognised or managed effectively.

Changes in aggregate service mix do not occur uniformly across the aggregate service offering. Rather, organisations that read the economic signals being created out of funding policy are incentivised to focus their efforts in areas where economic resources are commensurate with the economic cost of service delivery.

As such, any unplanned and unmanaged contraction in the service mix and beneficiaries supported are likely to be borne by particular beneficiary sub-groups with others not impacted.

Sustainability of the sector is also important, not for individual organisations but for service users and the public purse. Where there is a reduction in service delivery, ultimately, government must meet the need at an increased cost to taxpayers. Rebuilding sub-sectors after the fact also costs—this sector is not replaceable.

Frustratingly, a more erudite and closer examination of the nature and performance of WA’s charitable sector still eludes us as quality data assets remain wanting.

The recent difficulty experienced by government in making even rudimentary decisions relating to COVID-19 is an example of the impact of a lack of data.

There is a real need for a data investment and management plan to be co-designed between government and the sector in order to ensure appropriate data assets are available and appropriate resourcing is provided to the sector to contribute quality data in a timely fashion.

Without appropriate data analysis, the risk borne by people who rely on the services and supports of WA’s Not-for-profit and charitable sector and the public purse are placed in greater risk. This risk is evident and a longer-term view required to ensure adequate investment.

Download and read the full report.

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