Too many nonprofits?

This article from Charity Governance http://www.charitygovernance.com/charity_governance/2008/03/do-we-need-8500.html tends to support an (unpopoular in some circles) view I've had for many years that there are far too many nonprofits around for them all to be effective and efficient users of donors and funders largesse. Given that our population is about 7% of the US, if the ratios in Australia stood true, that would roughly translate to 6,000 new ITE applications to the ATO per year, at a minimum cost to the sector of around $30m just to create those organisations, plus at goodness knows what cost to the ATO to assess them. And if the audit rate equates to the US, only 60 of them each year will ever be questioned about their future activities.
With no equivalent of Guide Star or similar sites here in Australia, and not even a national register of nonprofits, little is likely to change in the near future.