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Can 600,000 Organisations be Hidden? The Hidden Sector of the Economy

Updated: Oct 12, 2022

✦ What is the hidden sector of the economy? Obviously, it’s not the government sector and it’s not the private sector. What’s left?

The wordsmiths call it the Third Sector.

What is this mysterious Third Sector? How big is it (for a hint look at the heading)? Does it matter? What does it do?

The Third Sector is also called amongst other things the Not-for-Profit Sector (NFP). It employs around 1.3 million people and over 3 million people volunteer in the Not-for-Profit Sector.

Organisations range from very small turnovers to hundreds of millions of dollars. He wants to see people achieve their dreams. He loves helping individuals, working with small business, large business and not for profit groups.

What does not for profit mean?

For a start it doesn’t mean it’s making losses. What it means is that any surplus the organisation makes is not divided amongst its members, but that the surplus is reinvested in the organisation’s activities.

Unspent money the NFP received from the government in grants can be recovered by the government.

Government funding

Often government funding is subject to conditions on what it can or cannot be spent on.


Boards have a responsibility to ensure the organisation complies both with its constitution and with the terms of any grants or donations it receives.

Financial sustainability

Traditional economic theory says that the role of the private sector is to maximise profits.

However, NFPs need to maximise benefit to their stakeholders particularly clients and their families. Often the choice of which NFP provides you with services has a much higher emotional commitment than simply buying a product.

Often, we are looking to work with an NFP that shares our values.

If someone is on the board of a NFP then they need to have good processes to prevent problems and manage money responsibly. Not everyone is going to be an accountant, but you need to understand what the financial statements mean. A board member is also responsible for not allowing a NFP to operate when it cannot pay its debts as they fall due.

Success Tax Professionals Port Macquarie works with several Not-for-Profits

We can report on Key Performance Indicators:

Monthly financial reports of a non-profit organisation as featured in Brilliant-Online

Monthly reports can be prepared to indicate what aspects the Directors should be concerned about eg. by using emoticons

The first five not-for-profits that contact Success Tax Professionals Port Macquarie before 31 October 2022 can get a 90-minute analysis of their financial reporting at no cost to that organisation.

As always, the advice in this article is general and you should seek advice from a professional advisor on your circumstances.

Contact John Clarke, Success Tax Professionals

Take note of John's new office location

a/ 5/124 Horton Street, Port Macquarie, NSW 2444, Australia

t/ 0481 039 851


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