For-purpose grants over $100K increase, but overall drop in philanthropy: Equity Trustees

A key sector report indicates an uptick in funding for faith-based, biodiversity and climate change organisations, while human services, arts and animal welfare took a hit.

A key provider of services to the philanthropic sector reported a slight drop in giving this financial year.

Equity Trustees’ Giving Review 2022 showed the organisation oversaw $92.2 million in philanthropy, grants and bequests to charitable and for-purpose organisations over the 2021-2022 financial year, representing a decrease of 4 per cent from the year before.

Grants from charitable trusts comprised $78.4 million of the total figure, while grants from estates, trusts and community trusts made up the remaining $13.8 million. The Kemvan Trust, Harry Lyon Moss Trust Fund and The William Buckland Foundation were among the top givers.

The slight decrease in giving is attributed to less grants from individual estates, likely due to the ongoing impacts of COVID. This was balanced by the emergence of a more sustainable giving base, explained Equity Trustees’ general manager of charitable trusts and estates, Jodi Kennedy.

“Importantly we are seeing an increase in giving from testamentary and charitable trusts as markets normalise following COVID,” she said.

“While direct donations to charities, crowdfunding, and volunteering make up more than 80 per cent of the value of philanthropic funding, an increase in giving via a structure such as a foundation – typically into perpetuity – has the potential to create a more sustainable giving base for the sector.”

While the overall total of funding slightly declined, the number of grants awarded increased. All up 3,157 grants, including 206 grants over $100,000, were made to the for-purpose sector over the past financial year, an increase from the year prior. The majority of funding (85 per cent) was distributed in metropolitan areas.

Health-focused organisations received the highest proportion of funding (39.5 per cent), a small decline of 5.5 per cent from the previous year. The largest single discretionary grant made in 2022 was $936,000, also given to the medical research and health field, compared to $800,000 in 2021.

CEO of national peak Philanthropy Australia, Jack Heath is not surprised by this outcome, given the ongoing impacts of COVID on communities.

“You’ve got a lot of discretionary grants that are happening around that health space in relation to COVID. That makes a lot of sense,” Heath told Pro Bono News.

“Until we’re able to have a significant turnaround in terms of mental health outcomes, you’d expect that funding is going to continue to grow. We’ve seen the issues that have come up in terms of government talking about cutting back services for people with mental health issues – there’s pushback from the community, because the levels of stress and anxiety still seem to be pretty prevalent at the moment.

“The question is once COVID is less on the front pages of the news, is support going to be maintained? I think that’s going to be a critical issue for us going forward.”

Faith-based charities, biodiversity and climate change organisations experienced a funding increase compared to the previous year, while funds declined for those operating in human services, arts and animal welfare.

While these changes in funding are of interest, Heath advises the sector to put these developments in the context of the pandemic and not take them as hard and fast trends, with many giving patterns still being linked to COVID.

“We’ve seen quite significant investments in social services from governments in response to the pandemic… and all the big shows have just not been operating. So you’d expect to see those drop.

“At this point in time, I wouldn’t be drawing too many conclusions until we’ve had a little bit of distance from the periods of lockdown. It’s interesting to note the changes year on year, but really, we probably need another couple of years before we can say whether or not this is a trend.”

Heath does, however, predict a stronger focus on placed-based funding for 2023 and beyond, with bigger foundations likely to support particular geographic areas, spurred on by the impacts of the pandemic and ongoing natural disasters for communities. 

“The combination of lockdowns, droughts, floods – we’ve got much more appreciation for people, organisations and needs in specific community areas.

“I think as the changes flow through from the government legislation around giving DGR1 [status] to community foundations, there’s huge potential because we’ve got an intergenerational wealth transfer that’s taking place. We’re talking about trillions of dollars over the next 10 or 20 years.

“In terms of future directions, when people are not holding high trust in terms of national entities or organisations or even governments, I think people are going to increasingly turn to their local communities in terms of where they direct their support.”

Combining purpose with structured giving frameworks is a critical edge for organisations in the for-purpose sector to benefit from sustained philanthropic giving, Kennedy added.

“Traditionally, strategic philanthropy has been thought of as something only done by ultra-high net worth in our society or via a bequest in someone’s will. But over the last twenty years, the rise of structured giving vehicles has widened the ability for mainstream Australians to give with thought and purpose during their lifetime.

“Coupling your purpose for giving with a structured philanthropic vehicle means that your funds are protected and growing over time and the causes you’re passionate about receive support, year after year.”

It’s a sentiment that similarly resonates with Heath, who advises not-for-profit organisations to invest in collaboration – both within the for-purpose sector and the philanthropic sector.

“There are new opportunities being presented to not-for-profit organisations in terms of collaborating with other not for profits, but also in terms of holding the possibility that you might be able to get a number of [philanthropic] foundations to actually collaborate themselves,” said Heath.

“So if you’re a not for profit, think of collaboration both in terms of other not for profits or in terms of foundations coming together. That collective funding piece by the philanthropic organisations can enable you to think bigger in terms of what sort of programs you might be investing in or pilot programs you might be wanting to undertake.”

Equity Trustees also noted that it would seek ways to encourage increased granting in the underrepresented areas of women, First Nations communities and the environment in 2023.

The Giving Review analyses philanthropic granting and bequests overseen by Equity Trustees each year. Over the past five years, Equity Trustees have overseen almost half a billion dollars of giving to the for-purpose sector.