World Vision chief executive officer Reverend Tim Costello says the pressure is greater than ever for charities to spend donations wisely.
World Vision chief executive officer Reverend Tim Costello says the pressure is greater than ever for charities to spend donations wisely.

It’s merge or die for Australian charities

NORTHERN Rivers charities struggling to stay afloat have been told to pool resources into a "regional back office" to share the load of day-to-day pressures.

Community Council of Australia CEO David Crosbie said hundreds of charities across Australia should close or merge to avoid competing with other not-for-profits and duplicating services.

The sector's turnover has more than doubled since 2007 from $46 billion to $105 billion.

Mr Crosbie said saturation point had been reached and regional NSW charities should, at the very least, share and standardise their resources.

"It's very hard to keep the doors open when you have to run your own office, IT system, payroll, cars and transport and employ staff," he said.

"Just running the organisation takes a lot of work.

"There should be more scope for regional back office support. Hubs where all charities can buy in to use one IT system and a single payroll system.

"It would take pressure away from running the organisations and allow them to focus on what they do well."

Mr Crosbie said smaller charities should take on a similar business model to a large corporation with branches and small offices.

"Even for fundraising at a local level, why wouldn't five charities get together instead of having five different people knocking on doors and sending out mail?" he asked.

"They need to find new ways to collaborate.

"There's a significant amount of wasted effort."

The number of charities in Australia grew by 10% between 2011 and 2014, and now employ 1.1 million people - 9% of the country's workforce.

World Vision CEO Reverend Tim Costello said all charities needed to ensure they were spending their donations wisely.

"Most people do not care whether it is one kind of organisational structure or another that does the work," he said.

"They do care whether their money is being used as effectively as possible to address their issue of concern."

Mr Crosbie said making the change would require tough decisions.

"Merger is still a dirty word in our sector. The idea of stepping aside for others to operate is still considered incredibly difficult," he said.

"Some charities say they run on an oily rag, use volunteers and are incredibly spendthrift, so how could there be waste?

"But sometimes the effort to not spend money can detract from providing good quality services."

Large federated organisations were told they had to justify having "eight different CEOs, eight different finance and human resources teams and eight competing fundraising teams".

Mr Crosbie pointed to the recent merger of Good Beginnings Australia and Save the Children Australia as an example of a smart decision devoid of ego.

"Here you have two CEOs and two boards willing to put aside their own personal and professional interests to ensure they better serve the needs of disadvantaged children in Australia," he said.

"This kind of merger should not only be commended, but should also be replicated across a significant number of organisations."


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