Types of Nonprofits in Australia

Australia has a robust and diverse nonprofit sector known to cater to the good of the public. A large number of the various types of nonprofits are small and unincorporated entities. For the past 30 years, the sector has recorded tremendous growth. This is largely resulting from the government’s enormous investment in the sector during the mid-1990s.

It should however be known that the vast number of nonprofits in Australia are driven by neoliberalism.

In this article, we will outline the various types of nonprofits in Australia and their legal structure.

• Australia is estimated to have 257,000 nonprofit entities in the country

• Two-thirds of this number comprises small, unincorporated organizations with no legal status

• Nonprofits employ over 1.3 million citizens in the country

What are the types of nonprofits in Australia?

The legal forms of nonprofits existing in Australia include:

1. Incorporated associations: These types of nonprofits are known as membership-based NPOs established under state or territory legislation. They include society, clubs, or institutions. 

Incorporated associations are not created for pecuniary gain or trade and are required to venture into lawful courses. These types of nonprofits in Australia comprise over 136,000 organisations. Small sporting clubs and community organizations are good examples of associations that employs this form of legal structure. 

2. Charitable trusts: Trust nonprofits engage their assets and property to provide and improve religion, education, poverty and other useful purposes in the community. These types of nonprofits serve the benefit of the public. 

Australian common law enables the creation of charitable trusts alongside certain modifications given by the trust legislation of a given state. Also, the company’s legal framework allows a company limited by guarantee to act as the trustee of a charitable trust.

3. Companies limited by guarantee (CLG): These types of nonprofits model the English structure of CLG. Also, they are majorly not-for-profit entities. Companies limited by guarantee have no shareholders. Rather, members pledge to disburse a particular sum in a situation where the company can not pay its debts upon dissolution.  

CLGs was known to be a renowned corporate and not-for-profit structure before the incorporated association came to being in the 1980s. Australia has about 12,400 of these organizations in existence. 

How many nonprofits are in Australia?

Australia is estimated to have 257,000 nonprofit organizations in the country. In contrast, less than 60,000 of these companies are registered. Also, two-thirds of the total nonprofits comprise small, unincorporated organizations with no legal status.

Basically, small nonprofits have annual revenue below $50,000. Over 50% of these entities employ no staff and all activities are based on volunteer efforts. They however play a crucial role in society.

Also, Australia’s not-for-profit sector is known for its large, diverse and unique contributions to the community. The sector’s annual revenue stands at $143 billion making up 8% of Australia’s GDP. Nonprofits employ over 1.3 million citizens and 3 million Australians volunteer their time and effort to help people in the community. 

Conclusion

Although Australia continues to tackle the many challenges posed by neoliberalism, the country nonetheless maintains a healthy civil society.  Several types of nonprofits in the country actively share and are involved in the life of the community. Albeit, a large portion of them are known to depend on government funding while the few others source funding through other voluntary means. 

However, the Australian Communities 2020 Report showed that less than a third of Australian citizens are satisfied with the financial transparency of nonprofits.  Hence, there is a need for more clarity and openness in the financial activities of the sector. 

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