A new logo which gives charities a tick of approval will let donors know if an organisation is financially sound, with new figures showing thousands of Australian charities are behind on their accounting and thousands more have been deregistered for failing to meet minimum standards.
The Australian Charities and Not-for-profits Commission will officially launch its Registered Charities Tick on Wednesday to coincide with the release of the 2015 Australian Charities Report, covering 51,000 organisations.
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ACNC commissioner Susan Pascoe said the tick would be a "visible badge of credibility" indicating an organisation is registered with the regulator and has met financial reporting and governance standards.
Figures from the ACNC show nearly 15,000 organisations have been deregistered for failing to report since the regulator started in December 2012.
The charitable status of more than 450 organisations has been revoked this year because they did not submit required paperwork for more than two years.
A further 3239 charities have been flagged by the ACNC this year for being more than six months in arrears with their reporting requirements.
Ms Pascoe said the tick could provide an incentive for charities to improve administration standards, with 2500 organisations already successfully applying to use the logo.
As the tick is only an indicator of a charity's registration status, Ms Pascoe said it was up to potential donors to do further research into how their donation might be spent.
"The logo tells you a charity is up to date with all of its basic requirements and it's an enterprise that an independent government regulator is 'oversighting' but if you want you want further information you can check it yourself," she said. "We would strongly advise donors to do their own research."
Public trust in the sector remains high despite an $85 million class action against professional fundraising company Appco, which is accused of underpaying workers who collect for some of Australia's best known charities.
Another fundraising company, Australian Sales and Promotions Pty Ltd, was forced to pay $124,000 in penalties in November after the Federal Circuit Court found it exploited complicated employment structures to avoid paying the minimum wage.
"All those things can affect a charity's reputation," Ms Pascoe said.
The Australian Charities Report reveals donors are continuing their support, giving $11.2 billion in 2015, which marks a 2.5 per cent increase on 2014.
Produced by the ACNC and the Centre for Social Impact at the University of NSW, the report shows the sector has an annual turnover of $134.5 billion and employs 1.2 million paid staff.
"The charity sector is a significant part of the economy as well as making an enormous contribution to community wellbeing," Ms Pascoe said.