Understanding the sector in which we operate

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The first article of a series of commentaries on the size, shape and health of the Voluntary Sector in New Zealand

There are how many?!

Statistics on the size and shape of the sector in which we work are really only beginning to emerge in any interesting and useable fashion. However, despite the newness of available detailed information, there are some things that have been known for some time. In this first article, the numbers of organisations that operate in New Zealand will be discussed … and compared with similar jurisdictions elsewhere in the world.

Back in 1996, statistics on the sector were collected primarily by The Companies Office. This was the governmental agency which historically has been responsible for registering organisations that operate within what we generally describe as “The Voluntary Sector.” At that time, organisations existed in one of four ways:

• Incorporated Society, under the Incorporated Societies’ Act 1908
• Charitable Trust, under the Charitable Trusts Act 1957
• Under their own legislation or legal authority
• As unincorporated societies and groups.

The Companies’ Office did not keep records of the last two of those four groups.

In 1996, as we knew the sector to be, there were 22,584 Incorporated Societies and 9,265 Charitable Trusts. The sector, to our knowledge at that time therefore, comprised 31,849 voluntary sector
organisations, give or take a few.

Fast forward to 2015, the latest available data from the Companies Office reports there are 23,572 Incorporated Societies and a whopping 23,009 Charitable Trusts as at 30 June. That’s a 4% and 148%
increase in each group over that 20 year period – an average growth of 737 new organisations each year … or 14 new organisations per week, every week for 20 years.

That’s 14,732 new mouths to be fed.

It won’t surprise you to learn that the picture is not quite so simple.

Firstly, it does not represent all organisations within the “Voluntary sector” in New Zealand. Factor in all the hobby clubs and other community organisations that are not inherently charitable, but which do operate within our sector, and the number of organisations within the sector balloons out to a massive 114,000 (as of 2103 by the way, so the equivalent 2015 number will be larger again). That is the size of the sector reported by Statistics NZ in their Non-profit institutions satellite account .

That number of organisations is up from 97,000 in 2004, meaning that the wider sector has grown by 17,000 organisations in 9 years … or by 1,888 annually … 36 weekly … or more than 7 daily on a 5-
day week basis.

Stunned? You could rightly be. It means that we currently have 1 community organisation for every 39 men, women and children in New Zealand. That ratio is down from 1 in 42 back in 2004 (adjusting for population growth).

So, here’s a thought: if we’re really diligent we could conceivably have one community organisation for at least every adult New Zealand citizen by the time we celebrate New Zealand’s bi-centenary!

And here’s another way at looking at the size of the sector. Since 2005, organisations wishing to benefit from tax exemptions must comply with the Charities Act. At the time of writing, New Zealand has 27,800 or so Registered Charities. That’s more than nearly 5000 more organisations than there are Charitable Trust numbers quoted above, Well, here’s the thing. You don’t have to be a Charitable Trust to be registered as a Charity these days. You may be a Charitable Trust, an Incorporated Society, a Private Company or indeed any other legal entity that meets the criteria of “charitable purpose’ defined in the Charities Act 2005.

In fact, trying to compare the sector now with the sector 20 years ago is pretty complicated. Schools and Churches have joined the realms of “charities.” There are also various statutory bodies that qualify. And on the other side of the coin, some Charitable Trusts may elect not to register as a Charity.

Notwithstanding these differences, we do start to have a basis upon which to compare our sector in New Zealand with similar jurisdictions overseas. And here’s what the figures look like:

New Zealand has the densest population of Charities in the world. At one Registered Charity for every 169 men, women and children, we outstrip everywhere else by a country mile.

It is true that there is no form of organisational contraception in New Zealand. If you don’t like the Charity you have, you simply find someone and you can go out and make yourself another one.

So, the question is “should we rationalise?” The answer is “yes,” wherever and whenever it is possible. Does it mean we should stop creating new Charities? The answer is “no.” The sector represents responsiveness to need and opportunity to innovate, so that a moratorium would be both counter-productive and counter-spirited to the nature of the sector.

But, teaching the value of contraception could certainly be a good idea.

To be fair, our sector in New Zealand includes Churches, whereas that is not the case in the USA. And some other differences can and do exist which might paint a slightly less dramatic picture for New Zealand. But, the picture would not be that significantly different.

So, if in your fundraising career, you feel that your job has been getting just that little harder year on-year, this article might just give you some confirmation that your gut-feel has indeed been 
accurate.

In the next article in this series, we will look at Charities that fail and the potential causes for that.

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