Australia / From the Founder
Charity in the 21st Century

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by Phil Ruthven, IBISWorld Founder and Chairman
Jul 25 2018

Charity, in one form or another, is a big part of our economy, valued at some $400 billion in this new fiscal year to June 2019. However, its composition has undergone a metamorphosis over the past century or more:

  • During the 20th Century (which began in 1901), our society slowly converted private charity into institutional charity via taxes (socialisation, if not socialism) as our economic growth and rising standard of living gave us the wherewithal to do so.
  • In 2018, approximately 96% of charity comes from our taxes. In 2018-19, this will total around $383 billion.
  • $40 billion of this will be delivered in the form of community services, which are heavily government-subsidised.
  • Only 4%, or $17 billion, will be in the form of private charities, and even then, a substantial part of that will be government-subsidised.
  • All up, charity will account for 20% of the nation’s GDP. And that doesn’t include volunteerism, which is uncounted in our GDP but is worth nearly $45 billion, lifting total charity towards $445 billion in 2019.

As shown above, private charity, whether religious or community-based, now accounts for only 4% of the officially measured charity’s contribution to the economy. However, if we include volunteerism, private charity accounts for 13% of the above-mentioned $445 billion.

While private charity—supported by philanthropists, benefactors, and government subsidies—makes up only 4% of all official charity, it deals with the hard stuff: family relationship breakdown, drug addiction, young people who have been incarcerated, destitute families, the vulnerable elderly, those with disabilities and many more categories of need.

But, as mentioned earlier, the vast bulk of our charity these days is automatic and derived from taxes.

A snapshot of private charity is shown below, augmented by a snapshot of volunteerism further below.

Clearly, our taxes and our organised volunteerism have taken the place of religious-based charity and other private charity.

Those stating they have no religious adherence now make up a third of the population (which is possibly understated), as shown in the chart below. Just 7.5% of the population attend a church weekly, and only 15% of Christians are regular churchgoers. And fewer citizens are entering religious orders to provide the sort of charitable services seen in yesteryears.

So, clearly, charity is alive and well—through our taxes and volunteerism. However, in this century, we have now institutionalised charity to improve the odds for those in need. We need to give a special thanks to the religious groups that carried the day for so long. But we should also rejoice in the socialisation that has mostly taken their place.

For a printable PDF of this release, click here.