Contribution of the not-for-profit sector

• Productivity Commission

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14 October 2009There is a need for wide-ranging reforms and a reduction in compliance costs faced by the not-for-profit sector, according to this draft research report.
The Commission's proposed reforms would bring together the multiplicity of governance, taxation, and fundraising regulatory requirements to create a much stronger foundation for this expanding sector. Proposed changes to government funding arrangements would reduce compliance costs and burdens, leading to significant gains in service delivery efficiency and effectiveness.

To consolidate regulatory oversight, and enhance public transparency, the Commission proposes a 'one-stop shop' for Commonwealth-based regulation in the form of a Registrar for Community and Charitable Purpose Organisations.

Australia has 600,000 not-for-profit organisations which contributed $43 billion to Australia's GDP in 2007 up from $ 21 billion in 2000. Adding the contribution of 4.6 million volunteers, with an imputed value of $15 billion, makes it a similar contribution to the retail industry.

The report makes a number of other draft recommendations aimed at:

•    building a better knowledge base through a national measurement framework and a Centre for Community Service Effectiveness for the promotion of best practice evaluation

•    smarter regulation including a more coherent endorsement process for tax status to be administered by the proposed Registrar and a new definition of charitable purpose

•    promoting giving through broader scope of gift deductibility, the promotion of planned giving and national harmonised fundraising regulation

•    facilitating social innovation and sector development through a variety of initiatives

•    reforming government purchasing and contracting arrangements

•    building more effective relationships with governments, including through the establishment of an Office for Not-For-Profit Sector Engagement to implement reforms.

The draft research report has been released to encourage public discussion and to inform the Commission's Final Report. Submissions are due by 24 November.