Preliminary research by Professor Myles McGregor-Lowndes at the Centre of Philanthropy and Nonprofit Studies reveals that giving is on the rise, males give more than females, and more people are giving than ever before.
According to the latest statistics released by the Australian Tax Office (ATO), Australians gave $867.7 million in tax deductible gifts in the year to June 30, 2002.
This represents an increase of 3.5% on the previous year, however, the increase was 16.2% the year before that. So why only the slight growth this time around? The answer lies in the fact that the ATO’s statistics do not include approximately 760 high “net-worth” individuals. The tax returns of these people are yet to be included by the ATO, so more comprehensive analysis won’t be available until 2005.
Each year Queensland University of Technology’s Centre of Philanthropy and Nonprofit Studies (CPNS) analyses statistics on tax-deductible donations made by Australians in their individual income tax returns to Deductible Gift Recipients (DGRs). The ATO’s publication Taxation Statistics 2001-2002 (the most current) forms the basis for CPNS’s latest analysis.
The research includes only those amounts donated and claimed as a tax deduction by Australians in their individual income tax returns. It is estimated that this represents roughly one-third of the total gifts made in Australia. The figures do not include corporate and trust taxpayers, who do not have to segregate gift deductions from other business deductions. Since 1978-79 gift deductions have outpaced inflation.
Australian taxpayers gave, on average, $241 each to DGRs in 2002 (compared to $243 the previous income year). While this looks like the average gift has actually dropped, remember the statistics do not reflect the 760 high net-worth individuals yet to lodge their tax returns. The figure has been further diluted because greater numbers of people made donations.
Approximately 3.6 million (35%) Australian taxpayers made and claimed tax-deductible donations. This percentage has been increasing slightly over the past ten years and is at its highest level since 1992-93.
For the first time since records were kept, we are able to ascertain the extent of giving according to gender. Approximately 1.9 million males made and claimed tax-deductible donations of $534.9 million, while 1.7 million females made donations totalling $332.9 million.
The average donation made by males was $280 (compared to $197 for females). The discrepancy between male and female giving can probably be explained by the fact that more men generally have a higher capacity to give than women. However, women gave a slightly greater percentage of their income (0.256%) than men (0.252%).
The more one earns, the more one claims as a tax-deductible donation. Whilst the average tax-deductible donation was $241 in 2002, donating taxpayers earning over $1 million per year claim an average of $53,446 in tax-deductible donations.
This represents 1.9% of their taxable income, compared to the national average of 0.25%. Sixty-six per cent of taxpayers in this tax bracket (ie: more than $1 million) make and claim a tax-deductible donation (national average 34%). The recent increase in tax deductible gifts is attributed to the creation of prescribed private funds which allow private individuals to establish foundations which do not have to also attract public donations to qualify as a DGR.