Only a small proportion of the $103 billion reported as income by Australian charities comes from donations and bequests. In fact, in 2014 less than 6% of the money charities received came from donations. Charities seek donations via a range of activities such as door-knock or other appeals, holding events or raffles.
The other sources of funding for charities come from:
- charging membership fees and charging for services ($54.5 billion), and
- government grants (these may be one-off grants or ongoing funding) ($42 billion).
There is a great diversity amongst charities when it comes to income sources, as well as the complexity of their financial and other administrative systems.
Many charities are subject to significant regulation, because of the nature of the work they do or their funding providers. For example, charities may work with high-risk clients or in partnership with other agencies to provide aid overseas or they may work in highly regulated sectors such as education and health.
Meeting regulatory requirements often results in costs to a charity. It is important to remember that running professional, sustainable and effective charities costs money.