Charitable giving has recovered significantly from its COVID-19 slump – we explore this, and more, in the latest JBWere – NAB Charitable Giving Index.

Figures shared in July 2021’s JBWere NAB Charitable Giving Index report painted a picture of a nonprofit sector significantly impacted by a fall in giving during pandemic times. While the annual drop in donations due to COVID-19 were modest at 3% and 4% in 2020 and 2021 respectively, the income loss this equated to was almost $1 billion per year.

But the series’ second report, published in January 2022, gives cause for hope, indicating a recovery that began in December 2020 and continues a trajectory that will see giving levels in 2021/22 reach or exceed previous records.

Let’s explore how the index predicts this uplift, starting by examining long-term trends alongside the pandemic recovery.

Long-term trends and pandemic recovery – some fast facts

  • Pre-pandemic, the charity sector experienced an overall increase in donations and bequests of $4.2 billion, or 60%, between 2014 and 2019. Going forward, the research tells us that ongoing tracking of figures in future Giving Index reports will show a fall in 2020 and 2021, before recovering in 2022 to levels higher than 2019.
  • Total income for the sector also rose 60% from 2014 to 2019 but this was largely due to government funding rising 79% over that period and other (self-earned) income rising by 44%.
  • Once recovery in charitable giving had begun in December 2020, there was an inevitable plateauing as lockdowns were reintroduced, but the report suggests this will only be a slight blip in the overall recovery trajectory.
  • Consistent with past major falls in giving during recessions and the global financial crisis, recovery has been fast. While donor numbers have also recovered, they have been more affected than giving value by the reintroduction of lockdowns in mid-2021.

Have these trends been consistent across different cause areas? No, they have not and the various pandemic and recovery experiences in each area of the nonprofit sector will come as no surprise. Who has weathered the storm most unscathed and who has a longer road to recovery?

Cause areas

2014 – 2019 trends

The chart below shows the difference in giving trends by cause from 2014 to 2019 using NAB transaction data and 2019 Australian Charities and Not-for-profits Commission (ACNC) annual information statements. Interestingly, some of the cause areas that experienced more growth pre-pandemic have experienced the slowest recovery in 2020 and 2021, as we will explore further below.

The post-2019 picture  

Animal protection – an increase in support from donations has continued with only a relatively mild fall during COVID-19 and donor numbers have held up well.

Arts and culture – while data for 2020 isn’t fully available yet, the final reported drop in both donations and earned income figures during that time will be severe, only rescued in part by JobKeeper and lower operating costs. However, a recovery in donations in 2021 has been equally dramatic. Donor numbers have also recovered well, although not to the same extent as funds received.

Development and housing – the decline in donations and donor numbers during COVID-19 was significant and the recovery to date only mild.

Education – there was a significant decline in 2020 and only a slow recovery in 2021 as the difficulties in face-to-face learning continued. Similarly, donor numbers have only seen a modest recovery.

Environment – an increase in support from donations continued in 2020 aided by bushfire giving, with only a relatively modest fall during COVID-19, followed by a strong recovery into 2021 assisted by the focus on COP26. Donor numbers have held up reasonably well since the start of the pandemic.

Health – the strongest gains have come from support for the mental health sector. Overall, charitable giving now represents over 3.1% of total income for health, although margins remain tight with the lowest surplus to income ratio of all charity sectors. Apart from a small dip at the outset of COVID-19, health has been the only sector to see new highs in both value of giving and number of donors.

International aid – some diversification in income sources has helped the sector, although it still relies on donations for 72% of total income. Donations have fared well over the past two years, although donor numbers have dropped, continuing a challenging trend.

Religion – although the surplus to income has slipped, it remains one of the strongest within all cause areas. While there has been a fall in both donations and donor numbers during COVID-19, the decline has been milder than many other areas.

Research (mainly medical) – a strong growth in donations comes with an improved focus on fundraising by medical institutes in recent years. Donations fell heavily with the onset of the pandemic, although donor numbers have fared better. The sectors’ historical reliance on major donors has also helped in recent times.

Social services – recovery from the COVID-19 fall in donations has been slow in terms of value, although donor numbers have improved.

Sports (non-professional) and recreation – during COVID-19, both donations and donor numbers declined significantly and have only recovered slightly from their lows compared to the recovery seen in other areas.

So, that’s the difference between cause areas, how has the experienced varied based on geography?

State and metro versus regional differences

While all states saw falls in giving during 2020, only the ACT and Tasmania are back to, or above, pre-pandemic levels. Apart from South Australia and Western Australia, which have not yet experienced a significant recovery, all other states have shown good rebounds from their late 2020 lows. Queensland and Tasmania were the only states to show little decline in giving during COVID-19.

While the extent of the fall was similar, the recovery in giving in 2021 has been a little faster in regional locations than metro areas which experienced more extended lockdowns and higher COVID-19 case numbers.

In a nutshell, the story so far…

The nonprofit sector is on the road to recovery – and thank goodness for that! Following a promising five-year period of pre-pandemic growth, the sector took a hit as COVID-19 reached Australia shores and some cause areas were impacted far more than others. Unsurprisingly, nonprofits dependent on audiences (arts and culture) or active participation (sports and recreation) have suffered much more, while those in the business of responding to the pandemic (health) have experienced some growth (and the physical and emotional toll of being on the frontline).

The state-by-state story will be an interesting one to follow as each of our premiers makes a different call about restrictions and how we “live with COVID”. We look forward to sharing this insight, and more, when the next charitable giving index is published. Watch this space…

The charitable giving index is derived from NAB transaction data. Total giving recorded by this analysis represents around one fifth of total giving reported by the charity sector to the ACNC, and therefore provides a comprehensive view of current giving trends in Australia, particularly by mass market and recurrent donors.

To learn more and access the January 2022 report, click here.

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