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NZ non-profit sector worth $20bn annually

NZ Newswire logoNZ Newswire 12/03/2017

While New Zealand non-profits are big business, generating $20 billion annually, there are also too many of them and some should merge, the first in-depth study of the sector has found.

Released on Monday, JBWere's New Zealand Cause Report tracked the sector's growth since 2004.

Operating in education, healthcare, arts, sports and the protection of animals among many other areas, JBWere New Zealand head Craig Patrick said non-profits were "crucial to the country's future prosperity and wellbeing".

He said New Zealand had 27,380 non-profits or one group per 170 Kiwis.

Since 2010, there had been an average of 2.5 charities set up each business day.

This compared to the US where there was one non-profit for every 339 Americans and Australia where there was one group for every 422 Aussies.

Mr Patrick said it was great Kiwis were passionate about making a difference, but worried some may burn out.

"Considering the governance obligations from board members and the sheer number of people required, we're concerned that this very large number of organisations will create a burden on their supporters and volunteers," he said.

"Looking ahead, we think that more collaboration and mergers could be part of the solution."

Mr Patrick said the report also suggested non-profits should not always run tight margins and consider using surpluses to fund innovation and creative thinking.

"Where, for example, are the Googles in the not-for-profit sector?" he said.

With $60bn in assets, non-profits could also consider consolidating their resources.

He questioned whether universities in the digital age will need their grand and expensive campuses when many studies will be conducted online.

Pointing to a more grassroots example, he said sports clubs were increasingly sharing facilities and administrative resources and should continue to do so.

Graeme Dingle, co-founder of the youth development group Graeme Dingle Foundation, also praised the report for emphasising a shift from non-profits operating in isolation to increasingly setting up "shared-value partnerships" with business.

"These will create more value and mutual benefits to both parties," he said.

Mr Patrick said an example of non-profits working sustainably with business rather than funding one-off projects could be in buying water rights.

The group could then sell to farmers when demand is high before returning water to the environment when rainfall is good.

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