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Surge in charities prompts warning over donations

In 2011, Australians donated $2.2 billion to charities, twice as much as 2004.

In 2011, Australians donated $2.2 billion to charities, twice as much as 2004. Photo: istock

Australians registered more than 2000 tax-exempt charities last year, growth that some philanthropists warn is becoming counterproductive.

The Australian Charities and Not-for-profits Commission (ACNC) has added about 2300 charities to its register since December 2012, compared with 1200 the previous year, when the register was run by the Tax Office.

Some philanthropists argue the increase is duplicating good intentions and could fracture donations into smaller and less effective pieces. ''Members of the public are constantly saying there are too many people calling and stopping us in the street,'' said National Breast Cancer Foundation chief Carole Renouf.

The new registrations bring the number of charities eligible for tax concessions to 60,000, about 10,000 more than in 2007.

''If charities are going to be set up at this rate, what they're [spending on] operational costs concerns me,'' said Louise Walsh, the head of Philanthropy Australia. She said charities needed help to pool resources and reduce administration and technology costs.

A recent analysis by John McLeod of JBWere Philanthropic Services found the average charity received about $75,000 in tax-deductible donations each year.

''Charities like World Vision are getting over $100 million,'' he said. ''The small ones are getting between five and 10 [thousand dollars a year]. That's not to suggest that a particular one should close down, but a lot of people should rethink their operations.''

The new figures follow a Fairfax Media investigation that found almost half of donations to some popular charities are spent on fund-raising. In 2011, Australians donated $2.2 billion to charities, double the 2004 figure.

Myles McGregor-Lowndes, director of the centre for philanthropy nonprofit studies at Queensland University of Technology, said the increase in registrations last year might owe to changes in the administration of the government register.

The ACNC said it encouraged ''prudent use of resources to achieve charitable goals … this may mean … working through existing charities, mergers and collaborative arrangements''.

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