Income and Giving In Australia

The greatest amount of gift deductions claimed in Australia come from middle and low-income wage-earners according to the latest review of tax figures.

But this mix of donors is changing. In 1998-99 taxpayers on incomes of $50,000 or less accounted for 80% of tax deductible claims. By 2001-02 this figure has fallen to around 70%.

The 2004 analysis of Tax Deductible Giving (2001-02) is by Myles McGregor-Lowndes from the Queensland University of Technology Centre of Philanthropy and Nonprofit Studies.

In the ATO data McGregor-Lowndes found:

– On average, male Australian taxpayers give approximately 0.252% of their taxable income compared to 0.256% for Australian females. 35.04% of Australian male taxpayers claimed tax-deductible donations to DGRs compared to 34.45% of Australian females. The national average was 34.76%.

– Reflecting higher taxable incomes (above $100,000pa), the average tax-deductible donation made and claimed by Australian male taxpayers to DGRs was $280.38 compared to $197.23 for Australian females.

– During 2002, 62% of taxpayers who made and claimed tax-deductible donations to DGRs were men donating to the value of $535 million. 38% of tax-payers making such claims were women donating to a value of $332 million.

– New South Wales taxpayers donated an average of 0.31% of their taxable income to DGRs, compared to the national average of 0.25%. Taxpayers in the Australian Capital Territory donated 0.29% of their taxable income, followed by Victoria with 0.26%. Queensland taxpayers donated an average of 0.19% of their taxable income to DGRs.

McGregor-Lowndes, while tracking the total tax deductible donations by individuals made to DGRs over a range of financial years since 1978-79 found that giving has risen, particularly since the mid 1990s.

In the 2001-02 year the average tax-deductible donation by an individual wage earner reached $241.

For taxpayers earning over $1 million per year the claim was 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%. 66% of taxpayers in this tax bracket make and claim a tax-deductible donation.

McGregor-Lowndes noted that the more one earns, the more one claims as a tax-deductible donation.

For those with an annual income of $46,000 the average amount given is about $100.

For the middle and lower income bands (up to $50,000 pa) donations account for around 0.2% of income and this proportion of giving also holds at about this rate for those with incomes up to $100,000 pa.

For very high-income groups, those with annual incomes over $100,000 and over $1 million, the proportion of income donated rises from 0.4% to 1.8% respectively.

The proportion of tax-paying givers rises steadily with income from 10% of those with incomes under $10,000 pa making and claiming donations through to 55% of those on incomes between $100,000 and a half a million pa.

The analysis has been published in a Summary of Key Data as part of The ‘Giving Australia’ Project – a research initiative of the Prime Minister’s Community Business Partnership.

The research is being coordinated by the Australian Council of Social Service (ACOSS) in collaboration with the Centre for Australian Community
Organisations and Management (CACOM) at the University of Technology, Sydney, the Centre of Philanthropy and Nonprofit Studies (CPNS) at the Queensland University of Technology, Roy Morgan Research (RMR), McNair Ingenuity Research and the Fundraising Institute of Australia (FIA).

The key research questions for this project are:
– how much are individuals and business giving to community organisations?
– how do current levels of giving compare with estimates from earlier ABS
surveys?
– how do individuals and business give (for example, partnerships/community
projects, sponsorship, donation of money, donation of goods/services,
volunteering)?
– how are individuals and business approached to give (that is, how they are
asked)?
– what are the attitudes of individuals and businesses to giving?
– what are individuals’ and business motivations for giving?
– what is the effectiveness of the various methods used by community
organisations to raise support?
– what is the level of foundation support for the community sector (including
family foundations)?
– what is the level of awareness of the various tax incentives introduced since
March 1999 to encourage giving?
– how effective have the tax incentives been in motivating potential donors?
– what programs/resources exist to build the capacity of the community sector in relation to its development and fundraising activities? What is the uptake of
these programs?
– what is the capacity of the range of community organisations to increase their resources through fundraising and development activities and volunteer
programs?

The research is expected to be completed midway through 2005.