The number of people giving to charity hits 40 year low
25 August 2021 at 5:11 pm
The latest analysis of 2018/19 tax-deductible giving data reveals a mixed bag of trends
While the total amount of money given to charity in 2018/19 jumped 5 per cent from the previous year, the percentage of taxpayers who claimed a donation fell to the lowest figure in four decades, new analysis shows.
The latest analysis of Australia’s tax data, compiled by QUT’s Australian Centre for Philanthropy and Nonprofit Studies (ACPNS), revealed that just under $4 billion was claimed by individuals as tax-deductible donations in 2018/19, compared to $3.75 billion for the previous income year.
The average donation amount also increased from $846 in 2017-18 to $933 in 2018/19.
While most people can agree that more dollars for charities is a good thing, experts are concerned about the continuing downward trend of the number of donors.
Just 26.7 per cent of the Australian population made a donation in 2018/19, a decrease from the previous year when 31.01 per cent of taxpayers made and claimed a gift.
This is the lowest percentage of donors Australia has seen in four decades and is the first time since 1978/79 that the figure has fallen below 30 per cent.
Associate Professor Wendy Scaife, ACPNS centre director, told Pro Bono News that while there was no way to tell for sure from raw data why the percentage of donors dropped, previous research has indicated that there are a multitude of reasons causing donor hesitation.
“A big one is that many people believe they can’t afford to give, but there are also issues around trusting that the charities will spend the donation where they say they’re going to spend it, and issues around the cost of administration,” Scaife said.
“A few of these are long held, but probably mythical, concerns because you have to spend dollars to make dollars, and impact is the best measure of a donation.”
Benchmarking for the future
In the wake of the 2019/20 bushfires, and the outbreak of coronavirus following shortly after, Scaife said that the ACPNS reports in years to come will look pretty different.
But she said that this particular data set would act as an important benchmark for the disaster years.
“This set of figures will be the benchmark for the pre- disaster and pre-pandemic giving.
“The next two sets of figures are, of course, going to be vitally interesting to see what the impacts of these consistent disasters have had on generosity.”
What else was in the report?
- Women give more of their taxable income than men. In 2018/19 more women made taxable donations but the average donation claimed by men was greater.
- Chief executive and managing directors were once again the group donating the highest average amount, although the amount decreased by 13.76 per cent between 2018-19 and 2017-18.
- Western Australia was the most generous state, with the highest total and highest average donations claimed in 2018-19. It was also the Australian postcode with the highest percentage of taxpayers claiming a donation (Joondalup DC).
Affluent Aussies (mostly) giving more than ever
For the past fews years, Australia’s wealthiest have been giving more which has boosted the total donation rate. In 2018/19 it was no different.
The average tax deductible donation for the 8,000 taxpayers that earned $1 million and over was $138,611, a significant increase from the previous year’s figure of $93,645.
Scaife also noted that compared to the rest of the population, who on average donate 0.43 per cent of their income, this demographic were giving away nine per cent of their income to charitable causes.
“So in other words, those high net worth individuals who are giving, are giving really generously,” she said.
But it’s not all good news. The data found that just four in 10 high networth individuals were giving.
“We would assume that people with a larger amount of income might wish to share some of that or have the capacity to share some of that, but it’s still only 55 per cent of the people who are earning above that $1 million who are appearing in our figures,” she said.
She noted that the amount of donations flowing from wealthier Australias was cause for concern.
“It’s about making sure that we have a democratic voice with our giving, that in fact it does reflect the bulk of the population, that the choices of where the dollars go reflect the whole population,” she said.
Charities must rethink their strategies to access untapped funds
Scaife said it was critical for charities to tap into both the wealthy Australians who had the potential to donate more, and the average Australians who could become life-long champions of charities.
“Charities need to think about the strategies that enable them to interact with more affluent Australians who have got greater capacity to give, because the more you earn, the more you give,” she said.
“But in terms of embracing other donors, there’s all sorts of different things such as collective giving… like giving circles, workplace giving programs, or family giving.”
She said that collective giving programs were often less intimidating and accessible for the everyday person.
“People are able to give $1 a week, but are still engaging, still giving, selecting on their values and still being a voice for that charity and a champion for that charity,” she said.
“And when times improve, those people might be able to give more and they’ll hopefully be really aware of what the charity does in the meantime.”
See the full report here.