The commission issued yesterday its 515-page draft report on the contribution of the not-for-profit sector, which now rivals the retail industry.

Associate Commissioner Dennis Trewin said Australia had 600,000 not-for-profit organisations involved in activities ranging from performing arts to running cemeteries.

The groups contributed $43billion to Australia's gross domestic product in 2007 up from $21billion in 2000.

''If you count the contribution of 4.6 million volunteers with an imputed value of $15billion, this would make it a similar contribution to the retail industry.''

The commission concluded the not-for-profit sector sometimes called the third sector, voluntary sector or social economy faced significant issues that hampered their work.

Major donors increasingly preferred organisations that provided ''robust business cases'' for investment.

But they were often unwilling to fund the cost to prepare such information.

The shift to competitive tendering for government-funded services had potentially resulted in ''restrictions on innovation, reduced trust between the parties and unnecessary tensions''.

Some organisations struggle to attract volunteers and retain workers when they could earn more in the public sector. ''The problems of workforce retention are compounded by uncertainty associated with short-term contracts,'' the report states.

For more, pick up a copy of today's Canberra Times