Tax Deductible ‘Bounce’ in Aussie Giving

Australia’s charitable giving has recovered to pre-Global Financial Crisis levels with a donation bounce recorded in the latest analysis of national tax statistics.

An analysis by Queensland University of Technology has revealed a tax-deductible donation rise in the Australian Taxation Office (ATO) annual statistics for the 2013–14 tax year.

Total gift deductions from taxpayers rose to $2.615 billion, up $322 million on the previous year, and is now exceeding the donation high recorded prior to the GFC.

The average donation was $575.54, up from $504.02 in 2012–13.

The average tax-deductible donation claimed by Australian male taxpayers in 2013–14 was $681, compared to $469 for Australian female taxpayers. However, on average, female Australian taxpayers who claimed donations to charities with Deductible Gift Recipient status (DGRs) gave approximately 0.38 per cent of their taxable income compared to 0.34 per cent for Australian males.

“The recovery has been slow and taken longer than other countries such as the US and UK, despite Australia being sheltered from the worst of the GFC by the mining boom and the robust nature of the Australian banking system,” Professor Myles McGregor-Lowndes from The Australian Centre for Philanthropy and Nonprofit Studies at the QUT Business School said.

“There was a 0.03 per cent increase in the percentage of taxable donations to taxable income, the greatest increase since the GFC, which bodes well for charities with Deductible Gift Recipient status if the trend continues.”

The analysis found that most income brackets were stable in their giving, compared to the previous year. However, there were increases in the over $1 million taxable income bracket: the number in this bracket making deductible gifts increased from 5,440 to 6,513; and the total gifts from this tax bracket increased from $224.37 million in 2012–13 to $338.54 million in 2013–14.

The average level of deductible giving claimed by people in this tax bracket also increased about $10,000 from the previous year, to $51,978.72.

“This is an encouraging sign, but there is more scope for higher giving from such a wealthy cohort,” McGregor-Lowndes said.

“Over 4,500 taxpayers with taxable incomes over $1 million did not claim a gift. Looking more broadly to all taxpayers with taxable incomes over $500,000, almost 17,300 made no claim for tax-deductible gifts.

“There is considerable scope to increase charitable giving from this category of taxpayers, and boost Australia’s level of charitable giving significantly.”

The upward trend came even though Queensland, Western Australian and South Australian taxpayers decreased their levels of tax-deductible giving in 2013–14, with New South Wales and Victorian taxpayers increasing their levels.

The analysis concluded that the effects of the mining boom coming to an end in some states and the continuing decline of manufacturing may be partly responsible for this shift.

The analysis found that the total number of Private Ancillary Funds (PAFs) increased by 12.63 per cent to 1,204 at the end of the 2013–14 income year. PAFs received $517.30 million in donations and distributed $300.72 million.

There were 91 new Public Ancillary Funds (PuAFs) approved, to bring the total to 1,550.

PuAFs received $435.05 million in donations and distributed $330.36 million.