Addressing the NFP Sector ‘Data Deficit’

By: Krystian Seibert   |   Policy & Research Manager, Philanthropy Australia.

A renewed effort and commitment are needed to address the Not for Profit sector’s ‘data deficit’, through initiatives such as the recent Curtin Report.

Last week I attended an event organised by the Australian Charities and Not-for-profits Commission (ACNC), which focused on the recently released Curtin Charities Report.

The report, which is the first of its kind in Australia, used data from Annual Information Statements (AIS) submitted to the ACNC to paint a picture of charities in Australia.

The release of such a detailed report, based on such a comprehensive dataset, underlined just how much we need good data on the Not the Profit sector and how one of our policy priorities must be to continue to address the NFP sector ‘data deficit’, through initiatives such as the Curtin Report.

Data on Australia’s NFP sector is pretty abysmal – it’s patchy and mostly not up to date. Let’s take the case of philanthropy as an example.

The last comprehensive examination of giving in Australia, the ‘Giving Australia’ report, was released in 2005, at the initiative of the previous Prime Minister's Community Business Partnership. So that’s nine years old.

The ‘Non-Profit Institutions Satellite Account’ produced by the Australian Bureau of Statistics (ABS) in 2012-13 and 2006-07 has data on philanthropy. Whilst these are important and useful publications, they are produced on an irregular basis.

Also, it’s unfortunate that in the case of the 2012-13 edition, the ABS points out that the data on philanthropy may not be reliable and should be used with caution.

That said, it’s not all bad news. We have good data available from the Australian Taxation Office (ATO) on Private and Public Ancillary Funds, workplace giving and individual tax deductible giving.

Whilst these are very useful, they only paint part of the picture of philanthropy in Australia.

For example, studies have shown that donations toward religious causes make up the largest proportion of giving – however much of this is not tax deductible in Australia and hence will not show up in data on individual tax deductible giving. Data on corporate giving is also not available.

Also, you can’t have an accurate understanding of the scale of philanthropy in Australia without data on all the different types of philanthropic trusts and foundations. But the ATO doesn’t have this data because unlike Private and Public Ancillary Funds, other types of philanthropic trusts and foundations don’t submit annual returns to the ATO.

So at the moment, there is no authoritative figure for the size and scale of philanthropy in Australia.

Going back to the Curtin Report, it’s particularly exciting not just because of what it tells us right now – but what analysis using AIS data could tell us in the future.

The ACNC’s 2014 AIS will include questions on what income a registered charity from donations and bequests, and what grants or donations were made by the organisation.

When this data is analysed and presented in aggregate and de-identified form, we’ll get an excellent picture of philanthropy in Australia.

Making such data available, and addressing the NFP sector ‘data deficit’ is one of the major benefits of the ACNC regulatory framework. But of course the future of the ACNC is uncertain.

Amidst this uncertainty, it’s important to re-assert the value of having comprehensive and up to date data on the NFP sector – whatever happens to the ACNC.

Some may ask the question as to why data is so important. Here are some reasons.

Firstly, as pointed out at the event last week, good data is vital to informing public policy development.

When Government develops policy impacting on other sectors, be it mining, agriculture, tourism or retail, they need good data to inform their decision making. Indeed there are Government bodies such as the Australian Bureau of Agricultural and Resource Economics and Sciences established with this purpose in mind. Why should it be any different for the NFP sector?

Stakeholders can also use this data to promote or challenge policy changes, and illustrate their consequences. Ultimately this should lead to better policy outcomes.

Secondly, and linked with the first point, is that good data is critical for understanding the health and vibrancy of the NFP sector. In the case of philanthropy, if trends showed that giving was slowing, it could prompt an examination of what factors could be leading to this and whether anything can be done. This would of course apply to other trends in key indicators across the NFP sector.

Thirdly, there’s a saying that ‘what gets measured gets done’. Again, in the case of philanthropy, if we want to grow giving in Australia, we need benchmarks to assess against.

Say that we introduced a ‘Giving One Per Cent’ campaign in Australia – where individuals and businesses were encouraged to give one per cent of their income to charity. With the data currently available, we could measure what percentage of taxable income is given as tax deductible donations by individuals. But as pointed out above, this is only one part of the picture.

The same logic applies to other objectives, such as diversifying sources of income within the NFP sector – you need accurate data to evaluate progress towards achieving that objective.

Of course, there are different ways of collecting data on the NFP sector. Using the AIS is particularly useful, because it’s not just a survey of charities, rather it’s more like a census.

Other options could include undertaking more regular surveys, either through the ABS or using the approach of the Giving Australia report.

The proposed Civil Society National Centre for Excellence could also coordinate various channels for data collection, and also possibly commission data collection to address existing gaps.

What’s important is that there’s a strong and continued emphasis from stakeholders on the importance of addressing the NFP sector ‘data deficit’, combined with a commitment from Government to work with stakeholders to address the challenge.

This opinion piece originally appeared on Pro Bono Australia, Tuesday 21 October 2014.

Oct. 21, 2014

 Tags: research & information, not-for-profit sector

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