CHAPTER 3: AS A COMMUNITY
The following characteristics within this chapter relate to how healthy development NGOs are in relation to their internal workings as organisations in Australia and how they are functioning as a community together.
Highlights from the chapter:
- There is a remarkable degree of variation in the size of the NGOs that make up Australia’s development NGO sector. The largest development NGOs have annual revenues over A$100,000,000. The smallest organisations in the sector have annual revenues less than $10,000. Smaller NGOs are much more common. Only about 35 organisations have revenues greater than $10,000,000. Nearly 300 have revenues less than $100,000.
- The age of organisations varies too. Some ACFID members are less than five years old, but a handful are over 80 years old. The most common age of ACFID members is between 10 and 20 years old. Smaller NGOs tend to be younger, but this is not always the case. Development NGOs do not always grow larger as they age.
- Total revenue and total public donations to Australian development NGOs have grown since 2002. However, neither total revenue nor public donations have grown since 2005 relative to the size of Australia’s economy. Australia is becoming wealthier, but not more generous.
- As a group, ACFID members do not spend excessively on fundraising (the median organisation spent 4.3% in 2016). Most ACFID members’ returns for their fundraising spend are more than enough to justify spending in this area.
- Large and small ACFID members have very different donor profiles. Large NGOs typically have many donors who each give comparatively modest amounts each year. Small NGOs typically have few donors, but donations are much larger. Smaller organisations typically spend less on fundraising but get more for their spend.
- Changes in revenue varied a lot between different ACFID members. While most saw their inflation-adjusted revenue increase in line with overall sectoral averages from 2013–16, some organisations saw their revenue double, while others saw their revenue completely collapse. Variation was highest amongst small NGOs.
- There is a lot of variation between different parts of Australia in terms of people’s willingness to donate. Over 16% of people in the ACT gave to large ACFID member NGOs in 2015. This is nearly three times as high as the percentage who donated in the Northern Territory
- Using ACNC data we estimate that over 6,700 people work for Australian development NGOs. Because most of the Australian development NGOs that are not ACFID members are small, more than 75% of all staff employed by development NGOs work for ACFID members.
- More than half of the staff of ACFID members are women, yet men continue to outnumber women in senior management and organisation leadership roles. The gender balance of organisation boards is closer to parity. However, board chairs are mostly men.
- Larger organisations deliver a higher development and aid spend per staff member than smaller organisations; however, the values for all groups are impressive.
- ACFID members can justifiably be called a learning community. Members (and to some extent other NGOs) participate in learning events ranging from small training meetings to large conferences.
- Although most ACFID members report that they undertake monitoring and evaluation, only a small minority publish evaluations on their websites. This is a lost learning opportunity as well as a transparency issue.
We made use of data from the ACNC dataset to report against this indicator. The introduction of the report and methodology (at Annex A) details how we worked with ACNC data. By our calculation, there were approximately 600 registered NFP organisations in Australia in 2016 that might reasonably be described as development NGOs. As discussed, only about a quarter of these organisations are ACFID members, although most medium sized and large development NGOs are members of ACFID. In 2016 there were 126 ACFID members.
Figure 3 shows the organisations we identified as development NGOs in the ACNC data, broken down by size group (as determined by organisations’ total gross income). The x-axis has a range of size categories. The y-axis shows how many organisations fall into those categories.
Nearly 80% of NGOs have annual incomes of less than $1,000,000. 50% have incomes less than $100,000. A handful of NGOs are much larger, however. In 2016, 35 development NGOs had revenues above $10,000,000 and two had a revenue above $100,000,000.
These are some of the most salient features of the Australian development NGO sector: the sheer range in size between the largest and smallest organisations, and the fact that there are many more small NGOs than there are large. Such diversity is, broadly speaking, good; different sized NGOs can fill different niches both in terms of the development work they do, and the members of the Australian public that they engage with. The current state of affairs is preferable to a sector that is completely comprised of small NGOs in frantic competition, or a sector completely monopolised by one or two large NGOs. Diversity brings with it the potential for positive spillovers too, as different sized NGOs, working in different ways, learn from each other.
At the same time, many of the NGOs in the ACNC dataset are tiny. In 2016, 77 (about 13%) had incomes of $10,000 or less. In some instances, organisations this small may want for the type of expertise needed to be effective in their attempts to help people in need. Learning the extent to which this is an issue, and whether it can be offset, may be important in the future.
Figure 3: Australian development NGOs by size (2016)
Figure 4 is based on data from the ACFID Statistical Survey. The data is for 2016. The figure shows the percentage of organisations that identified as religious or not, broken down by size category.5 Both religious and secular organisations have a long history in humanitarian and development work. This can be seen in the diversity of ACFID members in this area. The majority of ACFID members are secular organisations. However, a sizeable minority are religious.
5 For 7% of organisations no data was available on religious status in 2016 (or for earlier years). These organisations were excluded from calculations.
Figure 4: ACFID members by size and religious status 2016
Figure 5 is a histogram of ACFID members’ age in 2017 (based on those NGOs that provided their founding date when asked in the 2017 ACFID Statistical Survey).6 The chart is divided into three sections. The top section is for large NGOs, the middle section for medium NGOs and the lower section for small NGOs. Each bar in each chart is for an age group – you can see the age groups at the bottom of the chart. The height of each chart shows how many NGOs are in that age group. For example, the second bar in the chart for small NGOs is showing us that just over 15 small ACFID members are between 10 and 20 years old.
6Note that, reflecting responses to the ACFID Statistical Survey, in some instances organisations’ ages are based on the age of their international parent organisation.
On average, larger and medium sized organisations are older than smaller organisations. And there are no large organisations less than 10 years old. However, there is also a healthy spread of ages in all three groups. Most small organisations have at least 10 years’ experience, and some have been around much longer. The data shows that it would be mistaken to assume either that small organisations tend to be very new, or that the only way to grow to become a large organisation was to spend many, many years doing development work. Likewise, the data show that many small NGOs appear to have been content to stay small as the years have passed or have encountered challenges trying to scale up their organisation. While there is no optimal NGO size, this is a preferable situation to one in which all organisations are trying to grow as quickly as possible.
Figure 5: Age of ACFID members
The ACFID Code of Conduct requires all ACFID members to have their annual financial accounts professionally audited. Amongst ACFID members, compliance with this indicator is 100%; this form of financial accountability is one clear benefit of ACFID membership and the associated Code of Conduct. In addition, most development NGOs have to report to the ACNC, which forms another layer of accountability. The ACNC requires all NGOs with a total revenue greater than $1,000,000 to provide audited annual reports. Organisations with a total annual revenue between $250,000 and $1,000,000 are required to provide reviewed reports to the ACNC. Organisations with revenues of less than $250,000 are required to provide some information on financial affairs to the ACNC but this is less detailed. Except in rare instances, financial reporting to the ACNC is made publicly available through the ACNC’s website. This provides another valuable layer of reporting and financial transparency.
Combined, ACFID and ACNC reporting add an important layer of transparency to the sector. However,,most Australian development NGOs are small and are not ACFID members. Because of this, them majority of Australia’s small NGOs are not covered either by the ACFID Code of Conduct, or by the stringent public reporting requirements that the ACNC applies to larger NGOs.
One good indicator of development NGO transparency is website transparency, and particularly how well NGOs manage the webpages they devote to public appeals. During humanitarian emergencies ACFID provides a consolidated page that lists all the appeals our members have and links to the websites of those members. This provides a one-stop-shop for code compliant appeals and assurance for the donating public. It also checks for Code of Conduct compliance on the appeal webpages of those organisations that they are linked to. Figure 6 showsthe results of these checks, averaged across two recent crises (Myanmar/Bangladesh and East Africa/Yemen).7
In each crisis about 20 ACFID members participated. The picture of website transparency that emerges is largely a positive one. In all of the audited areas the majority of participating NGOs performed well. The only two areas where more than 10% of NGOs were found wanting were the (relatively) technical area of ‘explaining ratios’ and the provision of information on what excess funds would be used for.
7These two crises were chosen because ACFID member participation was particularly high for these events.
Figure 6: Verified emergency appeal website compliance
The previous indicators provide a sense of the processes that exist to help hold Australian development NGOs accountable to their Australian stakeholders. However, the most important stakeholders of all development NGOs are the people who they work with in developing countries. Under the previous iteration of the ACFID Code of Conduct, ACFID members were asked about the procedures they had in place to ensure accountability to primary stakeholders and communities incountry. Figure 7 reports on data generated from this question in 2015 (the most recent year for which data is available).8 It shows the proportion of members who gave answers suggesting procedures were fully in place alongside the proportion who still needed to make progress in this area. (An equivalent provision exists in the most recent version of the Code of Conduct; however, data is not available for reporting yet.) Reporting of this form does not guarantee optimal conduct in working with partners in developing countries. However, it provides a very useful starting point for assessing behaviour. And in this instance the picture emerging from the data is an encouraging one.
8 In 2017, ACFID released a revised Code of Conduct with an increased focus on participation, empowermentand local ownership, recognising the importance of communities and individuals being fully empowered actors in their own development process. We expect to see richer data in future years.
Figure 7: Progress in accountability to primary stakeholders 2015
Although the volume of funding that NGOs receive could never, on its own, be taken as a measure of the overall health of the sector, tracking funding amongst other indicators is important in providing a holistic picture of the state of Australia’s development NGO sector. In this year’s report we pay particular attention to the resources and sustainability of development NGOs.
Although most of the data we can draw upon in this report come from recent years (a period in which ACFID has placed particular effort in obtaining and maintaining accurate information from its members), the Development Policy Centre has retained records of the revenue of Australian NGOs for a longer period. These records are based on the revenue of ACFID members and the two largest NGOs that are not members of ACFID.9 Total revenue (from all sources) from this period is shown in nominal and inflation-adjusted dollars in Figure 8. In 2016, total revenue for the NGOs contained in this dataset was just over $1.8 billion.10 Although the funding fluctuates, including a slight dip in the 2015–16 financial year, the overall picture is one of steady increase, even when inflation is taken into account.
Results for the top 60 development NGOs11 that received the largest amount of funding from all sources in 2016 is at Annex B. Further tables detail ACFID members that received the most public donations in 2016 and those ACFID members with the highest development spend in 2016.
Figure 8: Total NGO funding over time
9 The two organisations are Compassion and Médecins Sans Frontières. Removing data associated with these two organisations does not change the trends shown in charts below. Because aggregate flows are dominated by large NGOs, including other non-ACFID member organisations would have little impact on the chart.
10 We estimate on the basis of ACNC data that total revenue for the entire development NGO sector in 2016 was about $2 billion.
11 This list contains ACFID members and non-members
The Development Policy Centre data also provides information on donations from the public over time. Long-run trends in this area can be seen in Figure 9.
Once again, although there are fluctuations, including a particularly pronounced spike caused by the Indian Ocean tsunami, the overall trend is upwards, although a small drop occurs in the most recent year for which there is data.12
While individual spikes in donations and total funding have at times been caused by natural disasters, there is no evidence that the broader trends in the charts are a product of increases in such events. Similarly, poverty has fallen globally over the period since 2002. Need, while still acute, has not been increasing. As a result, increased funding for NGOs can be taken as a positive trend.
Figure 9: Trends in public donations
12 Total public donations include non-monetary donations, except for those which are known not to have come from the Australian public. (Some large multilateral organisations have provided non-monetary donations in some instances to one Australian NGO.)
While positive funding trends are encouraging, it is worth remembering that Australia has increased in population since 2002 and it has become a considerably wealthier country. With more money and more people, Australia ought to be able to give more to the work of development NGOs. Figure 10 shows total funding to Australian development NGOs and donations from the public, as a share of Australia’s Gross Domestic Product (GDP) over time. Charting revenue data as a share of GDP is a means of taking Australia’s increased ability to pay into account.
The trends in this chart are less encouraging. Both donations and total NGO revenue were higher as a share of GDP in 2016 than they were in 2003. However, trends post-2006 have been effectively flat (in the case of donations) or very slightly upwards (total NGO revenue). NGOs are receiving a slightly larger share of Australia’s wealth than they were in 2003. Yet trends do not point to future increases; Australia’s generosity in this area is not growing. Or, to put it another way, NGOs are not becoming increasingly effective at tapping into Australia’s rising wealth.
Also discouraging is just how small a share of Australian economic activity is being devoted to the work of development NGOs. The fact that just over one tenth of one percent of GDP is spent on development NGOs each year is sobering.
Figure 10: Total NGO revenue and total donations/GDP
International comparisons in this area are difficult. Few countries make as much data available as Australia does. And it can be difficult to compare like with like with confidence. In New Zealand in 2016, donations to members of ACFID’s equivalent, the Council for International Development (CID) amounted to about 0.04% of GDP.13 This will be an underestimate of donations to the total New Zealand development NGO sector, however, as not all New Zealand development NGOs are CID members. The underestimate would not be huge though. It is likely that the percentage of GDP going to donations in New Zealand would be very similar to that in Australia. Figures from Giving USA show that donations to the United States ‘International Affairs’ NGOs are somewhat higher as a share of GDP, at 9%. However, this may simply be because their calculations include other organisations such as think tanks in the ‘International Affairs’ category.14 Overall, the available international comparisons suggest that Australia is not an outlier, either in a positive or a negative sense, in this measure.
There are two ways that Australian NGOs can increase the revenue that they gather from donations. They can either increase the size of the average donation or they can increase donor numbers.
Unfortunately, we do not have long-term data for donor numbers. However, for the three most recent years for which data is available we know the percentage of the Australian population aged over 18 that has donated to ACFID members. This is shown in Figure 11, which is based on data from the ACFID Statistical Survey. 15 No clear trend is apparent from the chart. We would expect any dramatic trend to be visible even when limited to only three years. It is probably the case that the proportion of Australians donating to development NGOs is staying fairly steady.
In terms of absolute amounts, it is worth noting that nearly 10% of Australians give to ACFID member NGOs each year. This is a much more encouraging figure than the percentage of GDP figures given above. So, whilst only a small fraction of Australia’s wealth makes it to the work of development NGOs, in any given year a reasonable proportion of the Australian population make donations to these organisations.
Figure 11: Percentage of Australian population aged 18 and over donating to ACFID members
13 Calculations based on GDP data from the World Development Indicators and NGO data from http://www.cid.org.nz/assets/CID-AnnReport-2016-web.pdf, accessed 29 Aug 2017.
14 GDP came from the World Development Indicators. NGO data from https://givingusa.org/giving-usa-2017- total-charitable-donations-rise-to-new-high-of-390-05-billion/, accessed 28 Aug 2017.
15 The data we possess cannot address the issue of people donating to more than one NGO. Because of this, double counting may mean that the estimates in the chart are slight overestimates. Recall, however, that the absence of non-ACFID members will be contributing to underestimation at the same time. Similarly, families donating together may be recorded as individuals by NGOs. This will also lead to underestimation of donor numbers. These latter issues ought to offset the first issue leading to reasonable overall estimates.
With data on ACFID members it is also possible to calculate the size of the average amount of money given by each donor to development NGOs in any given year.
The size of the average donation received by individual NGOs varies a lot between different NGOs. This variation provides a technical challenge in that it means that the average for all NGOs is not the same as the average donation for the typical NGO. To overcome this, in Figure 12 we provide both the mean donation averaged across all ACFID members and the average donation for the median ACFID member. As can be seen, the mean is considerably higher. There is also a clear upwards trend in the mean. This trend is less apparent when looking at medians, although the size of the average donation to the median ACFID member does also appear to be increasing.
The difference between means and medians indicates that although average donation sizes increased from 2014–16, this growth was primarily being felt by a smaller subset of ACFID members.
Figure 12: Average donation sizes averaged across NGOs and for the median NGO
Different NGOs have very different donor profiles. Some depend on large donations from a small number of donors; others are dependent on many donors who each give small amounts. Figures 13 and 14 show this difference across different ACFID member size groups. We have used 2016 data; the value of the median NGO is used for each group.
The differences are striking. The median large ACFID member had nearly 50,000 donors in 2016, who each gave $481 on average. The median small ACFID member on the other hand had only 150 donors. But the size of the average donation was much larger: $1,701. The explanation for these differences is probably that large NGOs have professional fundraising teams that are able to bring in many donors. Smaller NGOs, on the other hand, often draw on personal networks to a greater extent, and these are more effective in eliciting larger donations.
Figure 13: Number of donors for median NGO in 2016 by size group
Figure 14: Size of the average donation to median NGO by size group (2016)
Eliciting donations comes at a cost. Most Australian development NGOs spend money on fundraising.16 Fundraising is an essential element of NGO work, although spending heavily on fundraising is something that appears to be disapproved of by donor publics (Rutley & Stephens 2017).
Figure 15 shows the mean fundraising spend as a share of total spending for all ACFID member NGOs, as well as fundraising for the median NGO. Means and medians are similar, although mean values are somewhat higher. Research looking at longer time periods for a smaller group of NGOs suggests that the share of spending devoted to fundraising by Australian development NGOs is increasing (Wilson et al. 2015). However, for the years that we have data the trend is very, very slight at best. Fundraising does not consume a large share of the spending of the typical Australian development NGO, and if fundraising is laying claim to an increasing share of spending, this increase is barely perceptible across the years from 2013 to 2016.
Figure 15: Percentage of total spending devoted to fundraising
Figure 16 shows the percentage of total spending devoted to fundraising for the median NGO in each of the different size groups. The share of spending devoted to fundraising is considerably higher amongst larger NGOs than it is amongst small NGOs. This is understandable when one considers that large NGOs rely on large professional fundraising teams, while smaller NGOs are often better able to take advantage of personal networks for their fundraising efforts. Personal networks bring in fewer donors but, as we showed above, they also bring larger donations, in most instances.
16 By fundraising in this section, we are referring to fundraising designed to elicit funds from the public. Some organisations also devote resources to raising funds from government or multilateral sources. This type of fundraising is excluded from our analysis; we have data on it though. In practice, it is only a very small share of organisational spending for the small number of organisations that spend in this way. If government and multilateral fundraising was added into these charts they would not change appreciably.
Figure 16: Percentage spending on fundraising for different sized NGOs (medians)
Another measure of interest when discussing fundraising is its yield. That is, the number of dollars that organisations elicit in donations for each dollar spent on fundraising. Yield, for the median organisation in each size group, for the year 2016 is shown in Figure 17. By the standards of NFP fundraising (including for domestic organisations), the yields for each size group appear fairly good.17 At this point in time, there is no evidence the typical Australian development NGO suffers from inefficient fundraising.
In line with previous charts, the fundraising yield for small NGOs is much better than that for medium and large NGOs. Once again, this probably reflects the fact that many small NGOs do not have to make use of large professional fundraising teams but can, instead, draw from informal networks of donors. Networks of this kind appear, from the charts above, to deliver larger donations at a lower cost, which translates into a higher yield. Such networks, it should be noted, probably do not scale. It would be unrealistic to expect the typical large organisation to easily adopt the same approach. However, we did encounter at least one example of a larger church-based NGO that appeared able to fundraise very effectively through church networks. And it is possible that larger organisations may be able to more readily emulate a network approach to funding in the future in a world of internet-based communications.
17 Specifically, Ryan and Irvine (2012, p. 180) review literature based on a slightly different measure. When we converted yield to this measure, the averages of each size group compared favourably to the recommendations from the literature they cited.
Figure 17: Yield for median NGO in different size groups (2016)
One issue that is sometimes raised in discussions of fundraising is the outsourcing of fundraising to commercial third parties. There have been some examples of commercial fundraisers using questionable tactics to get donors to commit to regular ongoing donations. This can seriously affect public goodwill and not only the charity’s reputation, but the sectors. Figure 18 draws on 2015 Code of Conduct reporting data and shows the percentage of ACFID members by size group that use thirdparty fundraisers.
As can be seen, the practice is very common, particularly amongst larger NGOs. This does not necessarily mean that fundraising practices are an issue, although it highlights a potential issue that the sector should continue to watch.
Figure 18: Use of third-party fundraisers (2015)
Through data provided to the ACFID Electorate Snapshot Survey we are able to obtain some sense of where donors are most common. Electorate Snapshot data comes from larger ACFID NGOs only. As a result, it will understate donor numbers somewhat. However, we can think of no reason why this limitation will bias relative comparisons between different parts of Australia. The data we have to work with isimperfect, but as an approximation of the geography of giving they provide a helpful start. Figure 19 shows comparisons of the percentage of the adult population of each state or territory, broken down into rural and urban areas, that gave to NGOs in 2015.18
In almost every state the share of the urban population who gave to NGOs is higher than the share of the rural population. The only exception to this is South Australia and here the exception may be an artefact of difficulties in determining whether areas on Adelaide’s periphery are properly considered rural or not.
There is also considerable variation between different parts of Australia. The proportion of the population in the Australian Capital Territory who donate to NGOs is nearly three times that in the Northern Territory. Financial support of Australian development NGOs is not evenly sourced from around Australia.
18 Because the data used in this chart came from electorate level figures (from the Electorate Snapshot Survey) percentages were calculated as donors/registered voters in each electorate, with registered voters being the most readily available electorate-level approximation of electorates’ adult populations. Registration on the electoral roll is compulsory for all Australian residents eligible to vote and aged over 18. As a measure, the number of registered voters is similar to, but slightly less than, the total population aged 18 and over. This small difference explains why donor percentages are slightly higher in this chart than in the previous chart that presented national totals.
Figure 19: Percentage of states’ rural and urban populations who donated (2015)
Research by the Development Policy Centre has attempted to find explanations for the variation in donations between different parts of Australia (Wood et al. 2016b). This work has involved electoratelevel donation data and regressions to identify the correlates of differences in donation levels. The key findings of the work have been that, allowing for other factors, a higher share of the population donates in:
- Electorates with older populations
- Electorates with wealthier populations
- Electorates with more people who have a university education
- Electorates with more Green party supporters and more Coalition supporters.
Surprisingly, the regression results also showed that donors were less common in electorates where a higher proportion of the population was religious. It may be that this was the case because religious people give via other means (such as tithes) or focus on domestic charity. Interestingly, research on government aid has also shown religious Australians to be less favourable to aid than secular Australians are. However, this finding was driven by nominally religious Australians, and regular attendees of religious services were actually more favourable of government aid than other groups (Wood 2015). Possibly more detailed data on development NGO donations would reveal similar patterns.
For many NGOs donations from the public are not the only source of funding. Figure 20 draws on data on from the ACFID Statistical Survey to compare where funding comes from for the mean NGO in each size group.
Unfortunately, data only exists for the most recent four years. Analysis of trends over the four years shows an almost complete absence of change. There is, as Figure 20 shows, some difference between the different size groups.
In all groups, the average organisation receives more than half of its revenue from public donations. However, large NGOs receive somewhat less funding from this source, and somewhat more from the Department of Foreign Affairs and Trade (DFAT). Larger organisations also tend to receive more from overseas.
Although there are downsides to being dependent on public donations – most notably fundraising costs – as we have already discussed, most development NGOs are quite efficient fundraisers, and public donations have been increasing. Also, for most NGOs, particularly larger ones, public donations come from many different donors. This fact comes with a lower degree of exposure to the type of risk associated with being too dependent on any one donor. Reflecting this point, our own testing showed that, of the different revenue sources that individual NGOs have, overall funding from public donations was marginally less volatile than government funding.19 At the same time, institutional donors, particularly DFAT, provide valuable resources for NGOs and in the Australian case have generally proven to be quite stable partners. For these reasons the funding portfolios of the average Australian aid NGO appear, at this point in time, to contain a healthy diversity and a healthy mix of funding sources.
19 Specifically, we looked at the coefficient of variation for different funding sources for individual NGOs from 2013–16
Figure 20: Funding sources for ACFID NGOs (2016)
Figure 21 is based on ACFID Statistical Survey data from 2016 and looks at another aspect of NGO funding. It shows accreditation with the Australian NGO Cooperation Program (ANCP) run by DFAT. The ANCP is an important part of the partnership between the Australian government and Australian development NGOs. The ANCP stands as evidence of the Australian government’s support of development NGOs. Through it the government matches funding that accredited NGOs raise through donations from the public. The ANCP is discussed in more detail later in the report (with particular attention paid to changes over time and different ANCP funding categories). For now, Figure 21 provides a basic picture of the share of ACFID members of different sizes that draw on ANCP funding. As can be seen, larger organisations are much more likely to make use of the ANCP scheme than smaller organisations. This reflects the institutional capacity of larger organisations and their ability to meet scheme requirements. It also reflects the larger benefits the scheme offers larger organisations based on their higher absolute revenue from public donations.
Figure 21: Accreditation with the ANCP (2016)
Earlier in the report we showed trends in total revenue for all development NGOs. Such overall aggregate information need not necessarily be present for all individual NGOs or even broad groups of NGOs.
Figure 22 shows total inflation-adjusted revenue for the last four years for ACFID member NGOs, broken down by size group.20 The figure shows both how much larger NGOs dominate overall revenue trends, and how growth in their revenue drove overall revenue growth for the sector from 2013 until 2016, while a fall in revenue for these organisations saw revenue fall slightly from 2015 to 2016.
20 To ensure that apparent trends were not simply a product of inconsistent reporting, or of organisations joining or leaving ACFID, the data in the chart comes only from organisations that provided ACFID with data for all four years for which we have data. Also, a small number of organisations were excluded as a product of them appearing to have provided erroneous data.
Figure 22: Total revenue by NGO size group (2016)
One drawback of Figure 22 is that the size of large NGOs’ revenue is such that it drowns out changes in revenue in medium and smaller NGOs. Figure 23 overcomes this limitation by showing revenue for each group for each year as a ratio of the revenue that all NGOs in that group earned in 2013. Once again, data is inflation-adjusted. Values greater than one mean that the NGO size group in question had a greater collective revenue in that year than it did in 2013. Values less than one indicate less revenue than in 2013.
No group saw revenue ratios change by more than 0.3; the years in question were not ones of radical change for the groups as a whole. As can be seen in Figure 23, as a group, large NGOs’ revenue rose until 2015 before falling slightly. The pattern for medium sized NGOs involves growth between 2014 and 2015 accompanied by two years where revenue fell very slightly. As a group, the revenue of small NGOS fell from 2013 and 2014 before growing slightly in the next year, and then increasing rapidly. Further analysis shows that the decrease in total large NGO revenue from 2015 to 2016 appears to have been driven by fewer public donations for humanitarian disasters in 2016. This fall did not, it should be noted, affect all large organisations equally; some continued to see their revenue grow between 2015 and 2016. The changes for small NGOs as a group appear to have been driven by the beginning or ending of large grants for a few organisations.
Figure 23: Total revenue by NGO size group as a ratio of revenue (2013)
Even trends for size groups hide variation amongst development NGOs. Figure 24 offers the most finegrained picture of revenue changes. It is a histogram, broken down by NGO size groups, that shows change in (inflation-adjusted) revenue (from all sources) between 2013 and 2016. The x-axis plots the percentage change in revenue. (An NGO that saw its revenue grow by 100% would have seen its revenue double over the years in question. An NGO that saw its revenue fall by 100% would have seen its revenue collapse to zero.) The y-axis of the chart shows the number of NGOs that whose revenue changed by the amount indicated on the x-axis.21
All three size groups contain both development NGOs whose revenue grew, and development NGOs whose revenue fell. However, there are clear differences. Three times as many large NGOs saw their revenue grow than saw it fall, while just over twice as many small NGOs saw their revenue grow than saw it fall. The balance was closer amongst medium NGOs (18 grew, 14 fell). There was also much more variation in the fortunes of smaller NGOs. Many saw their revenue either fall substantially or grow significantly in percentage terms. This is clearly different from large NGOs, where there were no organisations whose revenue changed by more than 50%.
The ultimate picture that emerges from this disaggregated analysis is one of very different fortunes for individual development NGOs. For many, the years since 2013 have been years of growth. But other organisations have seen their revenue fall sharply over the same time.
21 Data is limited to those ACFID members who provided data for all four years. In a small number of instances, organisations were removed from the dataset when revenue values appeared to be erroneous.
Figure 24: Percentage change in inflation-adjusted revenue (2013–16)
One final financial area of importance is the extent to which NGOs are spending more than they are earning in revenue. While it is sensible for NGOs to spend more than they earn in individual years as a means of preventing funding fluctuations from unduly affecting work in the field, any organisation that persistently overspends runs the risk of rapidly depleting capital.
Figure 25 is a histogram that shows on its x-axis the number of individual years (over the period from 2013 to 2016) that organisations had expenses greater than their revenue. Because the period in question is four years, values on the x-axis range from zero (organisations that never spent more than they earned) to four (organisations that spent more than they earned in all four years). The y-axis shows, for each size group, the number of development NGOs that overspent for the number of years in question.
The overall picture is a healthy one. In all size groups the most common situation was overspending in only one year, and almost all development NGOs overspent in only two or fewer years. Across all size groups, only three organisations overspent in all four years; 13 organisations did not spend more than their total revenue in any years.
Figure 25: Number of years in which spending exceeded revenue
ACFID’s Communities of Practice (CoPs) are a significant form of collaboration both within and external to the ACFID membership. They are held together by a common interest in a topic and are driven by a desire to solve problems together and develop a body of knowledge. The infographic below provides a detailed picture of engagement through the CoPs from 2016. Organisations of all sizes engaged through the CoPs and engagement was not just limited to ACFID members. There are currently 34 established CoPs, though not all of them are active all of the time. Activity within the CoPs depends on a multitude of facets, including the time availability of members and strategic need.
Learning from experience is a crucial aspect of successful aid work. The chances of success are greatly enhanced if development NGOs have monitoring and evaluation systems in place, and if they are learning through them. A section of the ACFID Code of Conduct covers monitoring, evaluation and learning. ACFID members’ self-reported progress against this aspect of the Code of Conduct in 2015 provided a measure of activity in this area. The data is not perfect, but it does provide a gauge of the extent to which organisations are undertaking some degree of monitoring and evaluation.
Figure 26 is based on Code of Conduct data and shows the percentage of organisations that stated that they have monitoring, evaluation and learning systems in place, and the percentage that stated that they were still working to improve in this area. As can be seen, all large ACFID members stated that they have these systems in place. Even amongst small development NGOs, having such systems is the norm – exceptions are rare.
Figure 26: Monitoring, Evaluation and Learning amongst ACFID members (2015)
Undertaking evaluations is crucial and it is encouraging to see that most ACFID members claim to be doing this. The benefits of evaluations can be enhanced if development NGOs place evaluations on their websites. Not only does this serve as a form of transparency, but it also increases the learning opportunities that come from evaluations. Other organisations working in the same country or sector can learn from published evaluations, and published evaluations can serve as a resource that informs interested members of the public about the complexities of aid. There may be a small number of instances where protecting the identity of people and communities render it impossible to place evaluations online, but such circumstances are rare.
At present, Australian development NGOs (including ACFID members) do not systematically provide data on the publication of evaluations. Because of this, we searched for evaluations on a sample of ACFID member organisations’ websites.
22 Figure 27 shows the percentage of organisations that published numerous evaluations on their websites.23
As the figure shows, few organisations make a significant number of evaluations available online. Larger organisations were somewhat more likely to make evaluations available.
Some organisations did not regularly publish many of their evaluations online but occasionally made evaluations available. Figure 28 shows the percentage of sampled NGOs that either published numerous evaluations or, if they did not publish numerous evaluations, at least published some evaluations online. Performance improves quite a lot when assessed against these less rigorous criteria, although many organisations still fall into the ‘no evaluations available’ category.
In some instances, other NGOs mentioned evaluations, typically in their annual reports. However, mentions were usually brief and insufficient to convey in-depth learnings.
22 We searched the websites of 62 ACFID members. Although the size of this sample was quite small, it was large compared to the overall population of interest (49% of all members). This meant that finite population corrections are appropriate, and that the standard errors of all estimates were small. As a consequence, uncertainty around our estimates is small. Sampling was conducted on 3 January 2018. To search for evaluations, we first tried to find them using website menus. We then used websites’ own search functions to search for the term ‘evaluation’. This was followed by a Google site search for the term ‘evaluation’.
23 In practice, ‘numerous’ meant a high proportion of our estimate of the total number of projects in which an NGO operated. Some small organisations only have one or two projects in operation at any particular point in time. For organisations this small, one or two evaluations online were sufficient to have them scored as ‘numerous’. To be classified as ‘numerous’, evaluations also had to either have a dedicated location (a page or sub-page) or be situated in some other manner that made them easy to find.
Figure 27: Share of organisations who published numerous evaluations online (by size group)
Figure 28: Share of organisations who published any evaluations online (by size group)
One important way in which aid and development NGOs work collaboratively is through their membership of ACFID. Because we have already detailed the percentage of development NGOs that are ACFID members, we do not return to this form of collaboration here. Rather, we look at specific manifestations of collaboration.
The infographic below shows participation in learning events and conferences. Whilst this information does not capture a multitude of other learning events that would take place, it does demonstrate a learning culture within the sector.
Conferences are an important means for learning and sharing of information. There are three significant conferences within the sector each year. They are:
- Development Policy Centre Australasian Aid Conference
- ACFID National Conference
- Research for Development Impact (RDI) Network Conference.
The data displays participation by year and type and shows that:
- All three conferences are growing (which is a likely indicative of quality)
- NGO participation is growing in all of the conferences
- The conferences all involve a range of participants from NGOs, government departments and academia, contributing to the potential for knowledge sharing.
The RDI Network is a network of practitioners, researchers and evaluators working in international development. The Network exists to foster collaboration between Australian universities and NGOs in order to promote high quality and ethical development research, translated as evidence and applied to effective policy and practice.
Whilst the RDI Network organises multiple learning events (as seen in the previous infographic), it also engages through its monthly newsletter and via its LinkedIn group. Figure 29 shows subscription rates to these over FY16/17.
Figure 29: Subscription rates to RDI newsletter and LinkedIn Group over (FY 2016–17)
Figure 30 shows the total number of corporate and private sector donors to all ACFID members in 2016. The Australian Bureau of Statistics estimates that there were 2.17 million actively trading businesses in Australia in 2016. Based on this figure, we estimate that about 0.6% of businesses donated to ACFID member NGOs in 2016.24 This is much lower than the percentage of the adult Australian population who donated in 2016 (reported on previously). It is true that many of the Australian businesses counted by the Australian Bureau of Statistics would not have been in a position to donate. (Many businesses are very small: if we assume that only businesses with revenues above $50,000 could donate, the percentage that donated would be almost 1%.) Also, many business owners may donate as individuals and their donations will not be reflected as donations from businesses in ACFID member data.
Even taking these factors into account though, it still appears as if private sector donors are underrepresented. Possibly, businesses are groups who could be more actively engaged with as Australian development NGOs seek donors.
24 This estimate is based on the unavoidable assumption that all recorded corporate donations are from Australian organisations. A small number of corporate donors will be from overseas, meaning that this number is, if anything, a slight overestimate.
Figure 30: Total number of private sector donors to ACFID members (2016)
Larger NGOs tend, on average to have more business donors. Figure 31 shows the number of business donors to the median NGO in each size group in 2016.
Figure 31: Number of private sector donors to median ACFID member in each size group (2016)
While donation data is useful, reporting on the number of private sector firms donating to development NGOs only captures one aspect of private sector engagement. There are other ways that NGOs interact with Australia’s private sector. To learn more about private sector engagement ACFID conducted a Private Sector Engagement Survey in 2014. The findings of the survey indicated more intensive engagement than might be inferred on the basis of donations alone.
Extent and nature of existing engagement
- There are extensive partnerships between development NGOs and the private sector. Although larger NGOs may have more private sector donors on average, overall engagement with the private sector appears to be fairly equally spread across NGO size groups.
- NGOs found private sector engagement easier to facilitate with Australian companies.
- Partnerships are most common for health, education and agriculture projects.
- Partnerships are formed by both NGOs and private sector organisations taking the initiative.
Facilitating further and more effective engagement
- There is potential for more partnerships that focus on shifting business practices and building shared value.
- There is potential to capitalise on synergies between private sector organisations and specific areas of development.
- There is a need to build private sector actors’ interest in, and understanding of, development.
- There is a need to build skills and understanding within NGOs of how they can engage with private sector organisations.
Arguably, cuts to the Australian government aid budget represented the greatest short-term challenge to Australian development NGOs, and to their shared interest, in recent years. While it would be unrealistic to anticipate that all of Australia’s development NGOs would collaborate in their response to the budget cuts, the absence of any form of combined response would indicate a worrying inability within the sector to cooperate on shared issues.
A collective response to the aid cuts emerged in the form of the Campaign for Australian Aid. As of early 2018, 49 NGOs, as well four umbrella organisations and campaigning bodies, had publicly endorsed the campaign. Most organisations that endorsed the Campaign were ACFID members, but a small number were not. Figure 32 shows participating organisations by ACFID size category. It is based on data from the Campaign’s website (gathered in 2017).
Small organisations are under-represented. But generally, the figure points to broad collaboration across a diverse group of organisations. Collaboration was not limited to large professionalised organisations, or organisations heavily dependent on government funding. At the same time, however, only about one third of ACFID members participated in the Campaign. (The share of total development NGOs is smaller again.) Moreover, not all participants contributed significant amounts
of time or money into the Campaign. To some extent, non-participation reflects unavoidable differences in views about strategy or differences in beliefs about aid. The costs of joining the Campaign may have also been prohibitive for some organisations. However, it is surprising that a larger number of organisations did not decide to become at least nominally involved in the undertaking. It also seemssuggestive of a sector with some limits in what it can undertake collectively. Perhaps this is inevitable: a broad set of views and priorities can be found amongst Australian development NGOs; and the Australian development NGO sector is far from being alone in struggling with collective action. Nevertheless, the sector’s ability to serve as a force for policy change would be enhanced if higher levels of cooperation could be brought about.
The Campaign has only been active for slightly over three years. Prior to this, Make Poverty History was initiated in 2004 and this campaign helped build a public support base for aid increases under Prime Minister Kevin Rudd in 2007. So, whilst it is clear that the project of repairing the Australian government’s aid budget will be a long-term project, a clear challenge for Australian development NGOs will be finding a campaigning model that can be kept active over the long term.
Figure 32: Participation by organisation size in the Campaign for Australian Aid
Figure 33 is based on ACNC data from 2016. It shows the number of staff employed for international development work in all of Australia’s development NGOs combined. Staff numbers are broken down into staff employed in ACFID members and staff from other NGOs, as well as whether they are full time employees or not. The figure shows clearly the extent to which ACFID members dominate the sector. By our best estimates, nearly 75% of all employees working in the sector work for ACFID members.
Figure 33: Development NGO employees by ACFID membership
Figure 34 draws on ACFID data and shows the total number of staff employed by ACFID members in each of the size groups with data from 2014, 2015 and 2016. The chart shows that large ACFID member organisations employ the majority of staff. It also shows that staffing in this group is growing rapidly. (Further analysis shows, however, that this growth is not universal amongst organisations in this size group – growth has been driven by three large organisations.)
Figure 34: Total staff by size group
Figure 35 makes use of data from 2016 and shows the amount of money spent on aid and development work divided by the total number of staff in an organisation. (By ‘spent on aid and development work’ we mean money sent to international programs, rather than total spending. This category excludes spending items such as overheads, advocacy and domestic programs.)
Taking advantage of economies of scale, larger organisations deliver a higher aid spend per staff member than smaller organisations do. However, for all groups the values suggest a good degree of efficiency in getting money overseas.
Figure 35: Spend on aid and development spend per staff member
Indicators: Percentage of staff who are female, percentage of senior managers who are female, percentage of CEOs/directors who are female, gender composition of board, rules about gender composition of board
The following infographic is based on 2016 Statistical Survey data and shows:
- The average (mean) percentage of the workforce in ACFID members who are women
- The percentage of senior managers in the average ACFID-member NGO who are women
- The percentage of ACFID-member NGO directors (or people in an equivalent role) in each size group who are female
- The percentage of the board of the average ACFID-member NGO in each size group that is female
- The percentage of ACFID members with a female board chairperson
- The percentage of boards with a gender quota.
The majority of the staff of ACFID members are women. Yet, as the infographic shows, women are under-represented in senior management, leadership, and governance roles. Under-representation tends to be less in smaller organisations although the issue is still present. For larger organisations the contrasts are stark.
Further analysis showed some trends of improvement; however, these were modest at best. Since 2013, ACFID has been collecting and displaying data to its member regarding female representation, and two years ago passed a resolution on women’s representation in leadership and governance roles in in the sector. Despite this, there is still a clear need for further action within the sector on this issue.
In comparison to other industries, according to the data released by the Workplace Gender Equality Agency in 2016, ACFID members (72%) sit with the two highest industries that employ women, those being the healthcare and social assistance industry (78.3%), and education and training industry (70.9%), and far outweigh the total workforce composition in Australia which comprises 46.2% women and 53.8% men.25
One means of potentially remedying gender imbalances is the use of gender quotas. In some of the areas that we have looked at, quotas are probably not appropriate. However, quota-type rules can easily be applied to the composition of NGO boards. In 2016 (but not previous years) ACFID collected data on whether its members had any rules in place that mandated the percentage of their board
members who had to be female. This is also charted in the infographic. As can be seen, in all size groups gender quotas for boards are the exception rather than the norm.
25 Source: Workplace Gender Equality Agency | Gender composition of the workforce: by industry, April 2016.