Koda Capital releases a report that gives a clearer picture of Australian giving and philanthropy. There is good and bad news.
The report, A Snapshot of Australian Giving, “paints a positive picture of philanthropy and a less rosy picture of giving in general.”
It shows that the traditional fundraising charity model is facing multiple threats and that the simple act of donating to traditional charities may have peaked. Australians are becoming less charitable and less trusting of charities, despite 3,000 new charities joining the sector every year.
Corporate giving is healthy but the days of chequebook charity is over. Australian businesses give $6.2 billion in donations, $7.7 billion in community partnerships and a further $3.6 billion in non-commercial sponsorships
Workplace giving is struggling – employees are giving less via workplace giving and the average amount given is also falling, down from $43 million to $35 million in 12 months.
The power of the Private Ancillary fund (PAF) is becoming clear, with 1,284 PAFs now in existence and growing at a rate of 8%. PAFs now distribute $457 million a year to Australian charities and that distribution has tripled in the space of six years. On the downside they remain mysterious and elusive to most charities.
The rise of PAFs is also part of the bigger picture of giving in Australia. The report notes that a small cohort of wealthy Australians giving large amounts is influencing the level of giving in our country. This masks two issues: a failure to grow the proportion of Australians who give in a meaningful sense and a reduction in the level of support charities can expect from everyday Australians.
Women are also a powerful force in philanthropy. Despite earning 15% less than men, Australian women donate more of their income to charity, spend more time volunteering and are more likely take part in workplace giving than men. Each year women donate 0.39% of their income to charity, compared to just 0.34% for men.
To put this in perspective, if the gender pay gap was closed, Australian charities would receive an additional $180 million in donations each year and potentially much more
“If women earned as much as men, we could easily see Australian charities receiving $180 million a year more in charitable donations,” said Koda Capital’s Head of Philanthropy & Social Capital, David Knowles.
“That would mean an organisation like The Fred Hollows Foundation could restore sight to 7 million more cataract sufferers or World Vision could sponsor an extra 3.75 million children a year.:
Other findings include:
- The sobering fact is that Australians spend five times more on alcohol than they claim in charitable donations
- Only 33% of Australian taxpayers make a donation to charity and claim a deduction and the total amount claimed has decreased 7.2% from $3.1 billion to $2.9 billion. Those that do, claim only 0.036% of their income.
- 78% of Australians dislike being asked for money over the phone, yet 24% give when asked.
- 48% of people give when asked by a friend via social media.
- Trust and confidence in charities is falling and 14% of Australians now ‘outright distrust’ charities.
- Charities’ expenditure has increased by approximately 11.6% since 2015; This is faster than revenue growth in the sector.
- Employee costs represent 55% of all charity expenditure.
- Charities are heavily reliant on free labour – Australian charities have 2.9 million volunteers and 1.3 million employees
- Only 47% of employees in businesses with workplace giving take advantage of it, down from 49%
So, what does this all mean for Australian giving?
“One of the big questions we pose in the report is whether we are entering an era where giving in Australia might increase, while traditional fundraising charities struggle to attract support,” said Knowles.
“We ask because what we see happening in this country is a decline in public trust in charities and a decline in giving levels, masked by growth in big-dollar philanthropy. We see more big philanthropy coming as well – and that’s great – but both the philanthropists and the general giving public expect more for their dollar with every passing year and we think things will get tougher for charities that survive by asking for traditional donations.”
This insight reveals that the future may lie in social enterprises.
“We think the medium-to-long term future of giving will favour sustainable businesses that exist to help other people, rather than shareholders. We might see this happening as new social enterprises enter the sector, but equally, this future is about more money flowing to existing charities that operate as ‘social enterprises’, as universities, hospitals and aged care businesses do,” said Knowles
We also think skilled volunteering will take on new significance, as traditional organisations become less important and people harness the power of technology to change the world, on their own terms, unconstrained by the limits of their day-to-day employment.”
To read the full report, go here.