Australia’s charity sector is at its highest concentration, according to a new report by Wealth Management organisation, JBWere.

The Cause report, released on Tuesday, says Australia has the largest number of charities per capita in its history, housing around 422 people per charity.

The report says the market has reached $200 billion a year over the past 20 years. It also stated the number of charities was doubling every two decades, with more than 56,000 registered charities across the nation.

In contrast, statistics show only one in three people donate to charitable causes. The average donation is estimated to be around $500 each fiscal year.

The government is increasingly a source of funds, jumping from 30 percent of income in 1996 to 40 percent in 2014, to $40 billion, the report found.

JBWere CEO Justin Greiner said Australia’s charity sector needed to innovate to stay relevant. “There is no question that Australia’s charity sector, which helps the most vulnerable and need people in Australia and overseas, is crucial to our country’s future prosperity,” Mr Greiner said as quoted by Pro bono Australia.

“But after two decades of strong growth, the sector is fast approaching a crossroads. With overall spending growing at about 8.4 percent a year since 1996, and the sector facing potentially tighter funding models, something has to change.”

Mr Greiner’s comment follows calls from sector leaders late last year calling for charities to merge or shut down because there were too many duplicate charities wasting valuable resources and undermining outcomes for those in need.

– with other agencies