Region Report Oceania Regional Reviewer: Susan Barker Institutional Affiliation: Sue Barker Charities Law With contributions from staff at the Indiana University Lilly Family School of Philanthropy Overview of the Region GDP Most Number of Population Official Registration Economy Capital Per Capita* Represented Registered 2016* Language Levels (US $) Religion** POs English & Christian Central & Australia 24.6 million Sydney 49,927 55,059 (1) Strayn (61%) State levels New English & Christian 4.7 million Wellington 39,426 27,428 (2) Central level Zealand Māori (48.1%) *Current US $. World Bank 2016 ** US Department of State. Bureau of Democracy. International Religious Freedom Report for 2016. (1) Australian Charities and Not-for-profits Commission (ACNC). (2) Charities Services. New Zealand. November 2017 Oceania is a region of the South Pacific Ocean that comprises multiple islands. The United Nations divides the region into four sub-regions: Australia and New Zealand (including also the Christmas Islands, Keeling Islands, Heard Island and McDonald Islands, and Norfolk Island), Melanesia, Micronesia, and Polynesia. The entire region has an estimated population of almost 39 million; Australia and New Zealand account for 75 percent of the population in the region. However, the second most populated country in Oceania is Papua New Guinea in Melanesia, with 8 million inhabitants. Australia and New Zealand are democracies that have shown significant economic progress in the last 30 years. The Index of Economic Freedom (2017) categorizes Australia as one of the wealthiest Asia-Pacific nations, competitive in services, technology and manufactured goods. New Zealand is also a prosperous democracy that has a “strong commitment to economic freedom” and places a high value on international trade. For years, the two countries have reached agreements for economic integration to cut down trade barriers between nations. The recent Pacific Agreement on Closer Economic Relations Plus (PACER Plus) in 2017 extends to the Pacific Island economies with the intention to bring sustainable development to the whole Pacific region. The latest censuses in Australia (2016) and New Zealand (2013) show that Christianity, in its various denominations is the most represented religion in both countries (41.9% in Australia and 47.6% in 1 THE GLOBAL PHILANTHROPY ENVIRONMENT INDEX New Zealand). Other religions include Buddhism, Hinduism and Islam. Educational attainment in both countries is relatively high in comparison with other OECD countries. In 2016, 43.4 percent of 25-34 year-olds had completed tertiary education in New Zealand, and in Australia, this portion was 49.3 percent. Summary Report The philanthropy environment in Australia and New Zealand is generally good. Both New Zealand and Australia enjoy stable democracies with high rankings on Transparency International’s perceptions of lack of corruption. A key issue for Australia is the growing tension around advocacy activities of environmental organizations, a surprising development given Australia’s statutory recognition of the importance of advocacy by charities in section 12(1)(1) of its Charities Act 2013. Advocacy by charities is also a key issue in New Zealand, with many charities denied registration or facing deregistration for this reason. Australia is also affected by a lack of harmonization of state fundraising legislation, creating a significant burden for charities operating in more than one state in Australia. New Zealand, by contrast, has a unicameral one-state system with fundraising largely self-regulated. Figure 1. Global Philanthropy Environment Index Overall Scores, by Economy 4.33 4.25 4.17 REGION Australia New Zealand Source: Indiana University Lilly Family School of Philanthropy, 2018 Global Philanthropy Environment Index Key Findings 1. Proportionally large and diverse philanthropic sector The philanthropic sector in Australia is rather large and mainly characterized by a high number of unregistered organizations. With an estimated population of 24.6 million (Australian Bureau of Statistics), Australia has 55,059 registered charities in the Australian Charities and Not-for-profits Commission (ACNC). In other words, Australia has one charity for every 446 people. In general, the nonprofit sector in Australia has almost 600,000 organizations (many of them small), including near 2 THE GLOBAL PHILANTHROPY ENVIRONMENT INDEX 5,000 trusts and foundations (philanthropy.org.au). Nonprofits and charities can operate under a range of legal structures. It is estimated that the number of registered nonprofits is 190,000 and the number of unincorporated organizations is approximately 380,000 (AUSTRAC, 2017). By contrast, New Zealand has a population of 4.7 million and 27,428 registered charities (Charities Services website). The nonprofit sector in New Zealand may seem comparatively small in absolute numbers, but in relation to the current population, New Zealand’s nonprofit sector is larger, with a population per NP ratio of one organization for every 171 people. This ratio is lower than in Australia, USA, Canada, UK, and Japan. This may be an indicator of New Zealand’s culture of volunteering and no doubt contributes significantly to New Zealand’s high level of social capital (Legatum Prosperity Index 2017). The total estimated number of nonprofits in New Zealand is 115,000, most of them small, unincorporated associations and often volunteer-based (JBWere, 2017). In New Zealand, 21 percent of charities provide educational services, followed by organizations dedicated to religious activities (18%), and health and social services (7.2% each). Similarly, in Australia religion (28.5%), and education & research (18.6%) represent the largest portion of charities (Australian Charities Report, 2015). The composition of giving in both economies is very similar. In general, the main source of income of the sector in both countries is self-earned income through fees and other means (45 in New Zealand and 54 percent in Australia). However, the JBWare Cause Report (2017) shows that while in Australia philanthropic income (individual donations, family trusts and bequests, corporate philanthropy) is merely 8 percent of the income, in New Zealand the percentage of philanthropic income is 24 percent. On its face, this may appear to indicate that the New Zealand sector is less reliant on government funding in absolute terms, but with a relatively nascent philanthropic sector, the New Zealand charitable sector is in fact heavily reliant on government funding. In Australia, organized philanthropy understood in terms of family foundations is slowly growing, and planned giving, such as bequests, payroll giving, and major gifts, are also slowly gaining pace. Corporate philanthropy (including sponsorships) is a large portion of philanthropic giving in Australia, while in New Zealand, the largest proportion comes from individual giving, followed by statutory trusts (family, individual and community trusts, bequests and the energy, gaming and lottery sectors). 2. Philanthropic organizations are free to operate In general, both economies show highly favorable environment to form, operate and dissolve philanthropic organizations. There is freedom of expression and association protected by law or by the constitution in both countries. People have freedom to form and operate philanthropic organizations with any lawful purpose, and donors are free to donate to whomever they choose. Registration costs are affordable and no minimum capital or assets are required to register a nonprofit organization. Specifically in Australia, the transfer of certain powers to the Australian Charities and Not-for-profits Commission reduces significantly the time for registration and for obtaining tax-exempt status. In both countries, nonprofits are allowed to operate without registration. 3 THE GLOBAL PHILANTHROPY ENVIRONMENT INDEX Figure 2. Scores on Ease of Operating Philanthropic Organizations, by Economy 4.7 4.3 Australia New Zealand Form a PO 4.0 4.5 Operate a PO 4.0 4.6 Dissolve a PO 5.0 4.9 Ease of Operating a PO 4.3 4.7 Source: Indiana University Lilly Family School of Philanthropy, 2018 Global Philanthropy Environment Index Among the most relevant regulatory barriers are the fundraising regulations in Australia. The recent report of Australian Charities and Not-for-profits Commission (2016) considers that the fundraising regulatory framework is a burden for charitable organizations. First, fundraising legislation differs significantly between jurisdictions, increasing the administrative costs of charities. Second, regulations have not kept pace with new forms of fundraising, particularly online fundraising. In New Zealand, the most significant regulatory barrier is the narrow approach taken by Charities Services and the Charities Registration Board to the definition of charitable purpose, which results in significant numbers of charities being denied access to charitable registration. An additional barrier is the appeal mechanism in the Charities Act, which requires an appeal to the High Court: mounting such an appeal is beyond the practical reach of most charities, which means that the charities regulator is effectively not held accountable for most of its decisions. Otherwise, organizations can generally decide on their purpose, internal structure and operation without government interference. Reporting, however still represents a challenge in terms of consistency of requirements between jurisdictions in Australia. In reference