A dramatic pandemic drop in giving has shown signs of recovery according to a new report, but will it be scuppered by the latest outbreaks?
Charitable giving has fallen back to 2016 levels according to a new report, the JBWere NAB Charitable Giving Index: A timely examination of giving in Australia. This decline is unprecedented since the Australian Taxation Office began collecting donation data in 1979.
The biggest fall in giving in recorded Australian history came after years of steady growth (5-6% per annum) and a peak of giving in early 2020 spurred by a devastating bushfire season.
While the decline due to the impact of COVID-19 was dramatic, it was not as dire as predicted. Even better, there are signs of recovery and if history is anything to go by recovery from philanthropic downturns is usually swift.
In April 2020 JBWere published the report Where to from here? The outlook for philanthropy during COVID-19, which predicted a fall in giving of 7% in 2019/20 and a further fall of 12% in 2020/21, pushing charitable giving back to 2012 levels.
The findings of the new report, also authored by JBWere’s John McLeod along with NAB’s Senior Economist for Industry and Behavioural Economics, Brien McDonald, were not quite as bad. The decline in giving in 2020 was 4% (no doubt buoyed by the massive giving in early 2020) and 16% in the first half of FY21. This essentially took giving back five years to mid-2016 levels.
A turning point?
The report notes that late 2020 may have been the turning point for a recovery in giving, possibly confirmed by the recent Good Friday Appeal in Victoria. The 90-year-old appeal saw a 50% drop in donations in 2020 and required a significant investment from the state government. In 2021, the appeal had recovered to near pre-COVID results without government intervention.
Of course these stats were compiled before COVID-19 took a vicious and widespread turn in late June. The authors aim to produce the report on a semi-annual basis so the next iteration will be of high interest.
With that in mind and the prospect of prolonged lockdowns having a big impact on fundraising activities, let’s have a deeper look at the report.
Some causes were fine, others were not
The fall in giving was not even-handed. Health and international aid organisations performed well. Environmental and animal welfare causes (post bushfires) and religion had small falls. Arts, education, social services and development/housing suffered the largest falls (see table 1).
What a difference a state makes
Unsurprisingly, states the endured lockdowns showed a sharper decline in giving in 2020. Victoria fared worst declining 20% from March to December 2020, whereas Queensland and Tasmania recorded falls of only 9%.
There was no difference between metropolitan and regional giving, with both declining by 15% from March to December 2020. The report notes while historically greater wealth in cities has meant a higher level of giving, the trend towards sea and tree changes in the wake of COVID-19 might lessen that gap in the future.
The rich got richer…
As mass market giving dropped high net worth giving and corporate community investment both grew strongly in 2020.
Giving by the top 50 private givers has doubled over the past five years and grew 29% in the year to June 2020.
Corporate philanthropy continues to rise and was not dampened by the pandemic. In 2020, giving by the 50 largest company donors grew by 23% despite profits declining by almost 30%.
According to the report this is indicative of differing economic outcomes across the economy and the broader long term trends of widening income and wealth inequalities in Australian society.
Similar results were seen in the USA in 2020 when Foundation giving rose 17% compared to individuals at only 2.2%.
As the next wave of the pandemic in Australia escalates, these trends could be a guiding star for charities to navigate the pandemic
Read the full report here.