The massive size of the charity and not-for-profit sector has, for the first time, been revealed in a report by the sector's regulator.

The Australian Charities and Not-for-Profits Commission (ACNC) has released the Australia's Charities in 2014 report, showing the sector is a $103 billion industry employing almost one in 10 Australians.

Key points: Report also shows Australians are among the biggest givers to charity in the world

Report also shows Australians are among the biggest givers to charity in the world Shane Warne's charity under fire but policy analyst says donation figures not low

Shane Warne's charity under fire but policy analyst says donation figures not low Charity sector welcomes report, says it helps consumers know how their charity dollar was spent

ACNC commissioner Susan Pascoe said the top 5 per cent of charities attracted 80 per cent of the sector's total income.

"They're the very large charities, like the universities and hospitals and aged care providers and the like," she said.

More than two-thirds of charities in Australia were small, with an annual income of less than $250,000.

"We've got an extraordinarily diverse sector in Australia," Ms Pascoe said.

The report also revealed that Australia's charities spent $95 billion in 2014.

This consisted of $51.8 billion on employee expenses, $4.5 billion on grants and donations, and $38.7 billion on other expenses.

Sarah Davies from Philanthropy Australia said levels of high spending were not necessarily an indicator of dysfunction.

"There a couple of things that worry me when we say make bold statements, like 'the cost of fundraising is too high' ... those kinds of generic statements can be quite harmful," she said.

"It's like going to a restaurant and having the most wonderful meal, fabulous food, great environment, beautiful music ... and then at the end of the meal going, 'that was awesome, but I only want to give the money to the chef'."

Australians among biggest givers

The report was the first time the ACNC, established in 2012, had analysed data relating to the charity sector.

Charities have been required to lodge reports with the regulator since 2013.

The report showed that there were more than 54,000 charities in Australia and they reported a combined total income of $103.4 billion in 2014.

Of that, $42 billion was made up of government grants, and $6.8 billion was donated income. A further $54.5 billion came from in other income and revenue.

The report followed a transparency push across the non-for-profit sector which has expanded rapidly during the past 20 years.

Australians are among the biggest givers to charity in the world.

ACNC Commissioner Susan Pascoe said the details would benefit the public.

"This report means the broader community can get a really good indication of the money in the sector, the activities in the sector, the purposes of those charities and the beneficiaries that those monies are being used for," Ms Pascoe said.

"In effect we're close to a census of charities in Australia, because all registered charities are required to report annually.

"This is the first time that we will be able to say empirically how much money is in the charity sector in Australia."

A long-time lack of reliable data that analyses how the charity dollar hits the ground in Australia has resulted in what those in the sector have said was a crude model of analysis that focused on the cost ratio, or calculations of the cent in the dollar given to beneficiaries.

Warne under fire but no evidence of wrongdoing

Cricketer Shane Warne's charity, the Shane Warne Foundation, came under fire recently for reportedly only giving an average 16 cents in the dollar to its beneficiaries between 2011 and 2013.

The information was contained in a series of reports published last week in Fairfax newspapers.

Warne launched a spirited defence of the foundation, arguing that it had donated more than 50 per cent of more than $7.8 million it had raised since the foundation's establishment a decade ago.

Centre for Independent studies policy analyst Helen Andrews said the average 16 cents in the dollar reportedly handed on to beneficiaries by the Shane Warne Foundation was a relatively low figure, but Ms Andrews said such figures could vary greatly over years.

"It may turn out to be the case after investigation that there has been wrongdoing at the Shane Warne Foundation," Ms Andrews said, "but based on the information that has been released so far, I don't see anything that proves wrongdoing."

The analyst, who last year published a report on regulation of the not-for-profit sector, said the first publication of detailed data by the commission was a welcome move and would help the sector move beyond analysis of charities' effectiveness based on crude cost ratio calculations.

"This report is ... an unprecedented breadth of information on the not-for-profit sector that we just haven't had before," Ms Andrews said.

"Just about everything in the report is good news.

"It's a $100 billion sector — we hadn't realised it was of that magnitude before, and that's really interesting."

Charity sector welcomes transparency

Starlight Foundation chief executive Louise Baxter also welcomed the report's release, saying it would help consumers who were interested in knowing whether their charity dollar was spent well.

The Starlight Foundation lifts the spirits of thousands of children in hospital each year via its Captain Starlight and Starlight Express rooms in paediatric wards around the nation.

Ms Baxter said the sector welcomed greater transparency, and that the Starlight Foundation undertook careful research to map the benefit of each charity dollar donated.

She said many members of the public who donated to charity were interested in knowing their chosen charity had a strong track record.

But focussing on the cost ratio of a charity — a figure found in which the charity's overall expenditure is divided by the amount of donations it passes on to beneficiaries — was not a useful measure.

"I've moved between the corporate sector and the for-purpose sector, and one of the things that's interesting is that it's really acceptable in the commercial sector to invest in something that's really going to deliver you a long-term cost benefit," Ms Baxter said.

"But it seems if we just keep our eye on one number in this sector, it will prevent that, and actually stop the sector from becoming more efficient."

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