Wide Ranging Reforms Needed to Strengthen the Not-for-Profit Sector

There is a need for wide-ranging reforms to remove unnecessary burdens and costs faced by the not-for-profit sector and improve its accountability. This is the key message of a research report released today by the Productivity Commission. Better regulation, improved funding arrangements and enhanced opportunities for innovation would improve outcomes for the community and the public's confidence in the sector.

Putting the Commission's case for reform, Presiding Commissioner, Robert Fitzgerald, said 'the proposed reforms would directly address concerns about the multiplicity of regulatory requirements, poor collaboration between the sector and governments and emerging capacity constraints. They would thereby create a much stronger foundation for this expanding sector'.

To consolidate regulatory oversight and enhance transparency, the Commission proposes a 'one-stop shop' for Commonwealth-based regulation in the form of a Registrar for Community and Charitable Purpose Organisations. An Office for Sector Engagement should also be established to drive reform and policy development at the Commonwealth level.

Associate Commissioner, Dennis Trewin, said 'Australia has 600 000 not-for-profit organisations which contributed $43 billion to Australia's GDP, growing at an annual rate of 7.7 per cent since 2000. If you count the contribution of 4.6 million volunteers, with an imputed value of $15 billion, this would make it a similar contribution to the retail industry'.

The report makes a number of other recommendations aimed at:

• building a better knowledge base, through a national measurement framework and a Centre for Community Service Effectiveness   to act as a clearinghouse to promote 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 charities
• promoting giving through broader scope of gift deductibility, the promotion of planned giving and nationally harmonised fundraising regulation
• facilitating innovation and sector development through a variety of initiatives
• reforming government purchasing and contracting arrangements.

The research report was submitted to the Australian Government at the end of January 2010.