FaHCSIA Internet > Subject Areas > Communities > Publications & Articles > Community Business Partnership > Giving Australia - Summary of Findings > 5.0 Strengthening giving

Communities

Giving Australia - Summary of Findings

Previous: The recipients of giving Next: Conclusion

5.0 Strengthening giving

Overview

Giving strengthens nonproﬁt organisation in obvious ways. When money or time is given, nonproﬁt organisations can, and mostly do, enjoy greater capacity to fulﬁll their missions within the community. However, gaining an understanding of the ways in which giving, and nonproﬁt organisations may be strengthened is complex and not always obvious.

This discussion begins with a consideration of the reasons or motivations for giving. Most consider giving to be motivated by altruism, which is found to be an important factor and one that helps to predict frequent and generous giving. A more subtle and related concept is the role that giving plays in afﬁrming identity for givers. Those with religious beliefs are among the most generous of givers. For most givers the reputation of, and trust in, nonproﬁt organisations is important. Business expresses the importance of giving as ‘a good thing to do’ irrespective of returns, but many businesses point to giving enhancing their image and reputation, improving publicity and helping to build relationships with clients and for improving staff morale. Afﬁliation and reciprocation between givers and recipients—as volunteers, users of nonproﬁt services or members —are also found to be important motivators.

Sustaining giving is most likely when an understanding of motivations for giving is built upon by mechanisms that foster planned giving. A commonly held view is that giving is spontaneous; indeed 51% of donations are one-off, but often quite small. Nonproﬁt organisations are most likely to be sustained by regular and generous giving built on a long-term relationship with the giver. Givers who describe their donation as planned, tend to have given more. This is a double win, as fewer resources are then needed for securing donations and more can go toward achieving the ends that are the community purposes of nonproﬁt organisations.

A number of forms of planned giving are analysed. Bequests and the role of foundations and trusts are among these. Such forms of giving are often substantial. They are also often strategic by being sustained and supportive in addressing systemic problems and meeting gaps in community need.

Taxation measures also foster planned giving. While only about one in four dollars donated is claimed for tax purposes, those who respond to tax related giving incentives are often wealthier community members and their rates of donation and the magnitude of these are growing. A number of relatively recent innovations in Australia taxation law aimed at foster giving are assessed. Prescribed private funds are small in number but have grown quickly to become signiﬁcant. A capacity for growth is evident for workplace giving. Workplace giving is a simple and effective way to regularly donate to charitable organisations through automated payroll deductions.

The approaches that nonproﬁt organisations adopt to secure giving are also analysed. Some frequently used approaches, such as telemarketing, are found to be unpopular, but reasonably effective. However, these and other invasive approaches, and the overall credibility of nonproﬁt organisations through their adoption, pose risks to giving. Donors report a preference for door knock appeals, especially when undertaken by volunteers and when publicised. Businesses have a preference for, and do respond fairly well to, written requests supported by documentation.

A discussion of the resources and issues relevant to directly strengthening nonproﬁt organisations is provided, based in part on a survey of these organisations. Fundraising and volunteering are the two most widely adopted ways of generating resources. However, the use of particular practices varies, often based on the size of nonproﬁt organisations. Smaller organisations rely comparatively more heavily than larger organisations on gambling and volunteers and generally on a smaller array of strategies. These smaller organisations often lack both the resources to diversify their activities for generating resources and/or the knowledge to do so. Larger nonproﬁt organisations engage more often in a full array of fundraising activities, support from volunteers, commercial ventures and partnerships with business. However, even with experience larger organisations face constraints, particularly important being ﬁnancial and human resources limits, in particular attracting, retaining and training good fundraisers. As with any organisation, leadership at a CEO level is important and, as a deﬁning characteristic of the nonproﬁt sector, voluntary board members providing good, advice, support and contacts are a factor in success.

Finally, nonproﬁt personnel have had input to this project through their participation in focus groups and in-depth interviews. A range of issues were raised including concern about the reputation of the nonproﬁt sector, relations with government and the need for a sound legislative environment that helps in the management of risk and the construction of community conﬁdence through practical methods for transparency and accountability.

Many nonproﬁt organisations recognise the opportunities that giving from volunteers, donors, business and foundations or trusts can provide, but there is often a sense that choosing among these possibilities, while facing day to day challenges, can be overwhelming.

[ top ]

5.1 Reasons for giving

Reasons for giving by individual and households

People have many reasons or motives for giving. There is a huge literature on why people give, a literature contributed to by psychologists, economists and sociologists, each with their own disciplinary approaches. By contrast with the complexity of the academic literature, popular assumptions are that people who give are motivated by selﬂessness or altruism.

This section explores the wide range of reasons or motivations that people state as the basis for giving. Data from the Individual and Household Survey are reported as well as qualitative research ﬁndings presented.

As part of the Individual and Household Survey a particular donation by the respondent was selected for closer examination. These are listed in Table 14 below in the order of their frequency of being mentioned. The percentage who stated that reason is given, together with the average amount given by people who gave that as their reason, the total they donated, as well as the proportion of the total sum given by this subset of donations.

The strongest set of reasons, in terms of frequency with which they were invoked, were:

Afﬁrmation of identity. This included identifying with the cause and the people whose assistance is the object of the cause (reasons 1 and 3 listed in Table 14 below). These are the reasons given by almost half the donors.
A sense of reciprocation. Almost one-third say they give because of a sense of reciprocation for services already provided, or anticipation that help might be needed in future (reasons 4, 5 and 7).
Respect for a nonproﬁt organisation. Just over one-quarter nominate respect for, or trust in a nonproﬁt organisation (reasons 2 and 8)⁸.
Desire to strengthen the community/make the world a better place. This was nominated by just less than one in eight respondents (reasons 6 and 12).

Different reasons appear as factors to help explain the frequency and magnitude of donations. For example, the 32% who afﬁrm that they gave because they thought it a good cause gave 18% of the total given. Only 4.8% said they gave because of a sense of religious obligation, but they gave almost 13% of the total.

Table 14: Reasons for donating
	% STATING	MEAN DONATION ($)	TOTAL DONATED ($)	% TOTAL GIVING
1. It’s a good cause/ charity	31.5	127	518,060	18.1
2. I respect the work it does	22.9	137	402,119	14.1
3. Sympathy for those it helps	14.3	137	253,836	8.9
4. I/ someone I know has/ had an illness or condition it tries to cure	13.1	93	157,037	5.5
5. I/ someone I know has directly beneﬁted from its services	13.0	106	180,342	6.3
6. To help strengthen the community	7.8	168	170,138	6.0
7. I/ someone I know might need its help in the future	6.0	95	73,606	2.6
8. I trust it to use the money correctly	5.0	232	147,068	5.2
9. A sense of religious obligation	4.8	603	362,038	12.7
10. I/ someone I know is/ used to be a member	4.3	204	113,357	4.0
11. I felt obliged to the person who asked	3.8	76	37,674	1.3
12. To help make the world a better place	3.8	313	155,820	5.5
13. Gives me a feeling of goodwill/ makes me feel good about myself	2.7	161	56,487	2.0
14. I volunteer my time for the organisation	1.4	277	47,801	1.7
15. My employer encourages staff to give	0.3	70	2,942	0.1
16. Other	6.9	165	147,944	5.2
17. Can’t say	2.5	94	28,423	1.0

Givers were also asked about any afﬁliation they have with the entities that they give to and an analysis was undertaken of the frequency and level of giving. Findings include:

Afﬁliation with a nonproﬁt organisation strongly correlates with giving. Around 34% of givers claimed some sort of direct afﬁliation with the organisation to which they were donating ie they belonged to the organisation, or they volunteered for it or a family member had beneﬁted from it. For 25%, this afﬁliation was that they (or family members) used the service provided by a nonproﬁt organisation (some of these were also members of the organisation or volunteered for it). Fourteen percent were volunteers and 12% were members—again in both cases many were users or volunteers as well as members and so on. Afﬁliation encouraged a higher level of giving. Afﬁliated givers on average gave $214 over the preceding 12 months compared to givers without an afﬁliation, who gave on average $114. Overall, the 34% of afﬁliated givers gave 49% of all money donated.
Practising and holding a religious afﬁliation increases giving, including to non-religious causes. The results show that having a religion and attending religious services signiﬁcantly affects the likelihood to give and the amounts given (those with a religion gave at a rate of 88.9% at an average value of $460 per year compared with 83.5% who don’t have a religion, at an average value of $223 per year). When giving by those with a religion to their own religion is not included, the overall rate and amounts given are about the same as for those who do not have a religion. For those who have a religion, the less often they attend a religious service, the more often they give to non-religious nonproﬁt organisations.
Volunteers give more, more often and their giving is more specialised. Of the 41% of people who are volunteers in Australia, 91.2% give money to a nonproﬁt at an average amount of $538 per year compared with a giving rate for non-volunteers of 83.8% for an average value of $251 per year. In addition, 79.2% of volunteers give (money or time) to an organisation in one ﬁeld of nonproﬁt activity. By comparison 18.4% of all givers (of time and/or money) give to organisations in one ﬁeld of nonproﬁt activities, and 20.1% give to ﬁve or more organisations in different ﬁelds of nonproﬁt activity.

Qualitative research explored the attitudes to giving and related motivations and these reinforce many of the ﬁndings from quantitative analysis. These ﬁndings are organised around the expressed views of everyday individuals, those on middle incomes, and wealthy individuals.

Everyday Australians tended to like to support a wide range of causes. They particularly wanted to support those innocent of the problems they experienced (with some prejudices expressed regarding drug addicts and single mothers). Age inﬂuenced interests, university students tended to prefer volunteering for environmental causes or animal rights, and young people preferred to volunteer for discrete projects rather than on an ongoing basis.

Connection and relevance of nonproﬁt organisations, for everyday individuals, stemmed from:

it being local
its having an impact on them or their family
there being an emotional connection including social justice reasons.

Wealthy individuals seemed more interested in systemic change (eg. medical research, education related causes). In addition, these individuals were supportive of the arts.

Strong concern about duplication and wastage by nonproﬁt organisations such as ‘cars for fat cats’ was expressed. A moral dimension was expected in CEO and others salaries with some believing charities should be totally volunteer run to keep costs down. Corporate-style approaches to promotion were seen as unnecessary.

Connection and relevance of nonproﬁt organisations, for wealthy individuals, stemmed from:

a personal belief that these were addressing genuine needs (often not fully addressed by government)
community legitimacy (eg. a children’s hospital)
endorsement through formal or informal networks or via someone respected
perceived trustworthiness and accountability, predicated on proving that money was used effectively.

Reasons for business giving

Reasons for giving by business follow patterns similar to those identiﬁed above for individuals.

In the Survey of Business making donations was seen as ‘a good thing to do, irrespective of the return for us’ by 403,600 businesses, or almost 90% of all businesses which made a donation. This is a high expression of altruistic motives by business for giving.

Business factors are also important in giving. 137,100 (30.4%) of businesses that donated felt that making donations was ‘good for their business’s image’, 94,800 (21%) that it was ‘good publicity’, while 76,500 believed it was good for their relationships with certain clients or suppliers. Other factors cited were gaining a tax beneﬁt and improved employee morale.

Figure 2 summarises these stated beneﬁts to business of making donations. These patterns of response were similar to those for giving through community business projects and sponsorship.

Figure 2: Beneﬁts of making donations

The Survey of Business also asked about barriers to giving from which it is reasonable to infer reasons and motivations and limits to these.

The largest barrier to making donations was that business resources were committed elsewhere. This was seen as a barrier by 340,700 businesses or 44% of all businesses in Australia. Related to this another 59,300 businesses nominated ‘business restraints/ limited resources’ as a barrier to giving. Some 12% of businesses (91,800) did not believe it is business’ responsibility to make donations, and 11% of businesses (84,000) had not considered making donations. Figure 3 graphs responses to this question.

A similar pattern for barriers was identiﬁed through questioning regarding community business projects and sponsorship.

Figure 3: Barriers to making any/more donations

Figure 3: Barriers to making any/more donations.

[ top ]

5.2 Planned giving

A popular view of giving by both individuals and business is that it is spontaneous; a response to some tragedy, or a recognition that some person or group has a pressing need. Yet, fundraising and most fundraising organisations try to build a commitment to giving. The newly emerging discourse of social investment tries to persuade people that their giving requires as much attention, as much planning, as their other investing decisions, such as for retirement.

In response to the Individual and Household Survey, the majority of respondents indicated that they had been providing support to a particular organisation for ﬁve or more years. They were also asked if they had made one or more donations to that organisation over the past year. In 51% of cases organisations had received a one-off donation while, in 48% of cases the donor had made several donations to the organisation.

Respondents were asked if their donation was planned or spontaneous. Just over 50% were described as spontaneous, while just fewer than 16% were described as planned. Almost 31% were a mixture of both.

When looking at the amounts given, the average amount donated to the chosen organisation when the gift was described as planned was $238 and the average gift described as spontaneous was $59. The demographics of planned giving show a small increase in likelihood that the donation was planned among those over 65, those with a university degree and those in managerial and professional employment, but the differences were barely signiﬁcant.

Bequests

Bequests are sums of money or of shares, goods or property bequeathed to a living individual or organisation by a will. It was not possible through the Survey of Nonproﬁt Organisations to estimate the amount received through bequests because no reliable sample of nonproﬁt organisations is available. It is not possible to estimate the value of a bequest in advance, as the value of an estate can never be known until the death of the person leaving the bequest. There are no reliable annual or other estimates of the value of bequests received by nonproﬁt organisations.

We do know that bequests are an important source of funds for nonproﬁt organisations. Charity researchers Givewell surveyed 406 nonproﬁt organisations and found 220 (54%) had received bequests to the value of $140 million in 2003-04 (Givewell, 2005). The survey of 481 nonproﬁt organisations conducted for Giving Australia found that bequests were nominated as the most signiﬁcant source by 9% of responding agencies, the third highest ranked fundraising practice from among 24 practices listed.

Respondents through the Individual and Household Survey were asked whether they had made a will and whether they had made a bequest to any charity or other nonproﬁt organisation in that will. An estimated 58% of the adult population have made a will and of these 7.5% have included in their will a bequest to a charity or other nonproﬁt organisation. Not surprisingly, the likelihood of having a will increases with age. However, the likelihood of a person who has drawn up a will leaving money to charity increases only marginally with age.

Foundations and Trusts

Philanthropic entities are important intermediaries for giving – they span giving across the generations, often through bequests establishing foundations or trusts, and as an organised conduit between givers and recipients.

The Australian Directory of Philanthropy (Philanthropy Australia, 2004) lists more than 370 philanthropic entities in Australia. Lyons and Hocking (2000) were able to collect data about 158 philanthropic entities that in total expended $82.1 million.

Since the 2000-01 year, taxation law in Australia has provided for the formation of prescribed private funds (PPFs). A PPF is a fund established by a will or trust instrument with Deductible Gift Recipient (DGR) status. Previously, DGR charitable funds were public funds only and were required to seek and receive donations from the public and be strictly controlled by members of the public.

McGregor-Lowdes and Marsden (2003) have noted that the numbers of PPFs have grown rapidly. At 30 June 2001, 22 PPFs had received $78.6 million in donations and at 30 June 2002, a total of 81 PPFs had a total of $135.1 million under investment for future distributions to other DGRs. Around 300 PPFs have now been established. PPFs have had a signiﬁcant effect on the nature and extent of tax-deductible giving in Australia (CPNS, 2005).

Qualitative research for this project among wealthy individuals and those involved in foundations and trusts identiﬁed a number of themes. These included:

Inspired by the opportunity to seed ideas. Trusts, foundations and PPFs were motivated to fund strategic, systemic change and ‘between the cracks’ projects and build for the long term.
Newer entities need more support. It was generally observed that newer foundations or trust entities needed more support and had little awareness of existing training opportunities and networks. Key issues for newer trusts were clarifying mission and focus, handling applications, publicity, and deciding on allocations.
Challenges for older trusts. These were expressed as including interpreting founder’s wishes, being leaders and partners in their grant making to nonproﬁt organisations, and linking with other grantmakers where possible.

Business Foundations and Trusts

The Survey of Business found that 1% of businesses, a total of 7,000 businesses, operate a foundation or trust for the purpose of making donations.

There are 4,700 businesses with 1-10 employees that operate a foundation or trust for the purpose of making donations. However, businesses with 11 or more employees are relatively more likely to operate a foundation or trust. In fact, of businesses with 11 employees or more, 3% operate a trust or foundation, compared with less than 1% of businesses with 1-10 employees. Some 4,100 businesses in Cultural/Recreational Services operate a foundation or trust of this type and they are most likely of all businesses to do so.

[ top ]

Taxation Measures and Awareness

Taxation is both a measure to provide ﬁnancial incentive for giving as well as a means by which giving can be measured by the community and, for individuals and businesses, provides a framework for planned giving. Of course, those who pay a higher marginal rate of tax receive a greater incentive. Wealthier individuals are donating more and more often (Giving Australia, 2004) and so such tax measures are increasingly important.

The Individual and Household Survey inquired of informants whether they had claimed any deductions for donations in their 2003-04 tax return. Thirty-six percent replied in the afﬁrmative, and recalled claiming a total of $1.64 billion, higher than would be expected by projecting the Australian Taxation Ofﬁce’s ﬁgures. This estimate for tax deductible giving suggests that about one in four of all donations made by individuals is claimed. Presumably the remaining three-quarters of individual donations to nonproﬁt organisations is either claimable but not actually claimed, or comprises giving to nonproﬁt entities that are not deductible, such are religious institutions.

Table 15 below sets out, for demographic and employment variables, the percentages who report they claimed a tax deduction. It also sets out the mean size of the donation they made in the survey period and for comparison, the mean donation made by those not claiming a deduction. It must be noted that the mean donation made by tax claimers is not the amount for which they claimed a deduction: the amount reported as claimed for deduction was for the 2003-04 tax year, while the amounts reported here are for 2004; as well, many donations are not claimable. The last two columns indicate that those who claim tax deductions give more. The table makes it clear that those who made tax claims are predominantly drawn from high-income earners and they make higher than average donations.

Table 15: Comparison of mean donations by tax claimers and non-claimers
		% CLAIMING TAX	MEAN DONATIONS TAX CLAIMERS ($)	MEAN DONATIONS NON TAX CLAIMERS ($)
All givers		35.8	646	297
Gender	Male	38.3	743	315
	Female	33.7	546	282
Age cohorts	18-24	13.6	320	219
	25-34	32.7	521	259
	35-44	41.9	655	290
	45-54	47.4	699	311
	55-64	43.5	652	319
	65+	27.9	808	392
Personal income	Nil to $15,599	18.1	523	200
	$15,600 to $31,199	33.4	455	275
	$31,200 to $51,999	42.0	664	427
	$52,000 and higher	56.3	1,334	574
Household income	Nil to $25,999	17.0	442	216
	$26,000 to $51,999	36.3	593	314
	$52,000 to $104,00	45.1	718	398
	Over $104,000	52.4	1,117	596
Education	School level only	27.6	463	249
	Trade qualification	39.4	695	401
	Bachelor/PG degree	53.2	847	369
Employment status	F/T paid employment	46.8	681	321
	P/T paid employment	38.0	452	304
	Unemployed looking for work	15.7	326	141
	Not retired and not in workforcer	21.3	642	248
	F/T student	9.6	668	126
	Retired	28.5	796	329
Occupation	Managers and professionals	50.9	845	412
	Other white collar	33.8	517	278
	Trades	29.5	509	234
	Other blue collar	23.1	380	235

Workplace Giving

One way in which people give is via a regular deduction from their pay. This involves employers deducting the donation and passing it onto the nominated charity. Because it requires a commitment to nominate a certain charity, it is an example of planned giving. To encourage such methods of giving, two years ago the government allowed employers 38 Giving Australia: Research on Philanthropy in Australia | Summary of Findings to adjust an employee’s tax to recognise the value of the donation. In that way the donor gained the tax benefit they were entitled to at the time of making the donation, rather than later.

Of our sample, 0.7 % said their donation was made as a deduction from their pay. This suggests around 100,000 people who participate in such schemes⁹. These donors tend to be men (52%), in full time employment (64%) and earning over $52,000 annually (17%). Most (70%) live in capital cities, but a few (30%) are based in rural areas, possibly reflecting the use of such schemes by some large mining companies.

Individual awareness of tax incentives

Table 17 below identifies that of the 19% of all respondents in the Individual and Household Survey who indicated that they were aware of tax changes to encourage giving, nearly half were aware of this new workplace giving tax measure, ie about 9% of all respondents.

Since 1999, the Australian Government has made a number of other changes to taxation law to encourage giving, especially by high income/high wealth individuals. These include the availability of deductions for donations of property and for some of the costs associated with attending fundraising dinners and similar events, the right to spread deductions over five years and the right to claim deductions for donations to private charitable funds. The survey sought to discover the level of awareness of these changes, and whether they had had an impact. Nineteen percent of the sample was aware of changes, although some changes were better known than others. Table 16 below indicates the level of awareness of different changes (note that the percentages are of those 19% of respondents who said they were aware that there had been some changes).

Table 16: Awareness of new tax measures
	% AWARE (N=2,904)
Deductions are now available for donations to private charitable funds	63.3
Giving which allows regular donations through pay to receive tax beneﬁts immediately	46.5
Deductions are now available for attending fundraising dinners or similar events	34.9
Gains tax exemptions are now available	29.6
Deductions are now available for some property donations	23.7
Can be spread over 5 years	21.4

This awareness was spread fairly evenly across demographic and occupational groups. It was noticeably higher among university graduates, and among higher income earners. Importantly, the average size of donations made by those aware of tax changes was signiﬁcantly higher than donations made by those who were not aware. However, far fewer claimed that the changes had any impact on their giving. Only 1% of total respondents or 7% of those who were aware of changes indicated that it had had an impact on their giving.

Business awareness of tax changes

The Survey of Business found that of all businesses 30% allow employees to make pretax regular donations to non-proﬁt organisations through their pay. Of this group 4% of businesses offer a company matching scheme (eg dollar for dollar) for payroll deductions to non-proﬁt organisations.

The proportion of businesses allowing employees to make donations through their pay was above average in Education and Health and Community Services industries, but below average in Transport/Storage, Utilities and Retail Trade businesses.

Despite a high proportion of businesses in Education and Health/Community Services allowing employees to make donations through their pay, very few of these businesses offered a company matching scheme. Company matching of donations was above average among Construction businesses.

When asked, 301,300, or 39% of businesses, said that they encourage their employees in some way to give their money, time or services to not-for-proﬁt organisations or charities. The main ways were circulating information on local charities through the organisation (167,300 businesses or 22%), ﬂexible work hours to accommodate unpaid volunteering (150,800 businesses or 19%) or paid time off to volunteer (34,200 businesses or 4%). Some businesses encouraged their employees in more than one way.

Of all businesses 63% were aware that there are tax concessions for payroll deductions by staff to DGR organisations.

Awareness of these tax concessions was greater among larger than smaller businesses, and more common among Transport/Storage, Health/Community Services, Cultural/ Recreational Services and Education industries. Awareness of these tax concessions was below average in the Electricity/Gas/Water industries and in Accommodation/Cafes/ Restaurants.

Awareness of tax concessions for establishing a private foundation/trust that has been prescribed in tax regulations was found among 43% of all businesses.

Awareness of tax concessions for establishing a private foundation or trust was higher among Transport/Storage businesses and among Health/Community Services. Awareness of these concessions was relatively low among Education organisations and businesses in Accommodation/Cafes/Restaurants.

[ top ]

5.3 Approaches used for giving: attitudes and effectiveness

To raise funds, nonproﬁt organisations need to approach people to give. McNair Ingenuity has found a strong correlation between the number of approaches to people to donate and frequency of donating (Giving Australia, 2004). Yet the frequency with which people and businesses are approached to give, their actual giving in response to particular forms of approach and their attitudes to these vary considerably.

The Individual and Household Survey asked people their experiences and attitudes regarding ways they were approached to give. Except in the case of major disasters such as the Asian Tsunami appeals, people rarely give unless they are asked. Organisations seeking donations have a variety of ways of asking people for gifts. Some are direct, such as telephone appeals to strangers, others are less direct, such as using known donors or people who volunteer for the organisation to ask friends or work colleagues to donate.

Some ways are more successful than others at eliciting a donation. Some are not universally liked; their overuse may damage the reputation of a fund raising organisation or all fundraising charities.

The tables below set out six of the most common fundraising methods and, for each method, records the number of people who recalled being approached. Subsequent tables indicate the frequency of giving in response to this approach and attitude toward the approach.

Table 17: Number approached for donations by different methods
	% OF SAMPLE APPROACHED	NUMBER OF PEOPLE APPROACHED
Telephoned at home	77.3	11,907
Television advertisement or program	69.3	10,670
Request through mail/letterbox	65.9	10,147
Approaches door knock appeal	61.1	9,408
Street or public place	59.8	9,204
Advertisements or ﬂiers in magazine/ newspaper	51.9	7,985

Table 17 shows that the most frequently reported approach, being telephoned at home, is also the most disliked. Although it is not the most successful at eliciting a donation, such telemarketing is far from the least successful. Door knock appeals are not as frequent, but are less likely to be disliked and far more likely to elicit a donation.

Table 18: Effectiveness of different methods
	EVERY TIME %	MOST OF THE TIME %	SOME OF THE TIME %	NOT AT ALL %	%TOTAL SAMPLE %
Telephoned at home	2.2	7.4	31.9	58.3	77.3
Television advertisement or program	0.5	1.3	13.9	84.0	69.3
Request through mail/letterbox	1.6	3.9	28.7	65.4	65.9
Door knock appeal	22.9	24.5	35.2	17.0	61.1
Street or public place	5.1	16.1	44.2	34.3	59.8
Advertisements or ﬂiers in
magazine/ newspaper	0.1	0.4	8.0	91.3	51.9

Table 19: Attitudes towards different methods
	DISLIKE THIS METHOD %	NO FEELING %	HAPPY TO BE APPROACHED THIS WAY %	% TOTAL SAMPLE %
Telephoned at home	77.8	10.4	10.6	77.3
Television advertisement or program	16.4	42.7	38.6	69.3
Request through mail/letterbox	32.7	34.3	31.8	65.9
Door knock appeal	21.6	21.9	55.3	61.1
Street or public place	41.8	20.8	36.2	59.8
Advertisements or ﬂiers in magazine/ newspaper	15.4		51.9	31.6	51.9

Qualitative research among individuals tended to reinforce these quantitative ﬁndings. These ﬁndings include:

Invasive techniques were slammed. These were seen as tainting not just the nonproﬁt organisation involved but the sector itself. It mainly occurred in relation to telemarketing and street asks by commission/paid canvassers but was less of an issue for previous donors to an organisation and if volunteers were asking.
A range of likes and dislikes. Direct mail was seen as acceptable, though sometimes a waste of money while unaddressed mail was ignored. Face to face solicitation by volunteers was more accepted if clear signage and non-aggressive behaviour was used.
Advance promotion helps. All approaches were more trusted if promotion in the marketplace had informed people they were coming, and were considered legitimate. However, supporters needed to know the organisation and be positive about it for more than token support to occur.

The Survey of Business asked how businesses were approached to make donations and their reactions to these approaches. The ﬁndings, summarised by form of approach, are given below and detailed in Table 20.

Telephone call. This form of approach was the most commonly used, was fairly effective in terms of making a donation and was among the least preferred.
Form or letter. This was also a quite common form of approach, also fairly effective and was the most preferred.
Form or letter with additional materials. This was not so common a method, was modestly successful and not so preferred.
Request from an employee or director nonproﬁt organisation. This was infrequently used, but modestly successful and not so preferred.
Email. This was an occasionally used method of approach, the least successful and not preferred.
Request from a client or supplier. This was an occasionally used method, somewhat successful and not particularly preferred.

Table 20: Methods of approach to business for donations and their effectiveness
	APPROACHED	MADE A DONATION	PREFERRED
Telephone call	465,500 60%	214,100 27%	47,400 6%
Form or letter	420,300 54%	208,900 27%	236,300 30%
Form or letter with additional materials such as cards or booklet	146,700 19%	77,700 10%	78,700 10%
Request from an employee or director involved with the beneficiary organisation	100,500 13%	86,400 11%	65,100 8%
Email	95,000 12%	7,700 1%	46,100 6%
Request from a client or supplier that you already deal with	88,000 11%	50,400 7%	50,400 7%
Other	15,600 2%	15,200 2%	5,800 1%
None of the above	60,600 8%	101,600 13%	162,600 21%

[ top ]

5.4 Resources and issues for strengthening nonproﬁt organisations

This section identiﬁes issues associated with the marshalling of resources for strengthening nonproﬁt organisations. Key components summarised are those of qualitative research among nonproﬁt organisational personnel and the Survey of Nonproﬁt Organisations.

The Survey of Nonproﬁt Organisations as part of this project collected responses from almost 500 nonproﬁt organisations. While its ﬁndings cannot be quantiﬁed to and presented as representative of the entire sector, its ﬁndings are broadly relevant and indicative. That survey looked at the:

extent to which nonproﬁt organisations secured resources via fundraising, partnerships with business, commercial ventures and volunteer recruitment
types of resources and support that nonproﬁt organisations use to assist them when undertaking these activities and how useful they ﬁnd them
reasons that nonproﬁt organisations do not undertake activities such as fundraising, partnerships, commercial ventures and volunteer recruitment
factors that would improve the organisational capacity and ability of nonproﬁt organisations to undertake activities.

The pattern of resource mobilisation

Overall, the ﬁndings suggest that the nonproﬁt organisations that responded to the survey are active in a wide range of resource mobilisation activities. In the 2003-04 ﬁnancial year most nonproﬁt organisations (80%) were active in terms of fundraising. Of the wide range of fundraising practices available to nonproﬁt organisations, bequests and major gifts, marketing, events and personal solicitation are the most extensive. The key types of fundraising activities in terms of revenue generation include special events, direct mail, bequests and grants from foundations.

The majority of nonproﬁt organisations in the study were aware of tax incentives relating to workplace giving and prescription of private charitable funds as deductible gift recipients (DGR). Fewer respondents were aware of the other incentives relating to tax deductibility and capital gains tax exemptions.

Almost three-quarters (72%) of the nonproﬁt organisations in the study had attempted to recruit volunteers in the 2003-04 ﬁnancial year. Nonproﬁt organisations that had either a paid or unpaid manager or coordinator of volunteers were more likely to have undertaken recruitment compared to all organisations with volunteers. Similarly, organisations that were active volunteer recruiters were also more likely to use formal contracts or agreements with their volunteers, have formal volunteer training and recognition programs and had experience with employee/corporate volunteering compared to all organisations with volunteers.

Almost two-ﬁfths (39%) of the nonproﬁt organisations in the study had at least one partnership with a business organisation. The majority of partnerships were between 1 and 5 years’ duration with a sizeable minority (20%) indicating their partnerships were ongoing. The ﬁndings suggest the predominance of ‘philanthropic’ as opposed to ‘transactive’ or ‘integrative’ styles of community business partnerships, as they primarily consist of ﬁnancial or product contributions from business with only less than one-quarter of partnerships having an employee volunteering component.

Over one-quarter (29%) of nonproﬁt organisations in the study operated a commercial venture or social enterprise. In the overwhelming majority of cases (87%) the venture was an extension of services that organisations provide as part of their primary purpose and mission.

Factors inﬂuencing the pattern of resource mobilisation

Some of the key factors that appear to inﬂuence resource mobilisation behaviour among the nonproﬁt organisations in the study include:

Organisational size. The likelihood of nonproﬁt organisations undertaking fundraising, volunteer recruitment, partnerships or commercial ventures increases with size. This is especially the case for partnerships and commercial ventures. Furthermore, smaller organisations are less likely to engage in multiple resource mobilisation activities (e.g. fundraising, volunteer recruitment and partnerships) compared to larger organisations.

Size not only plays a role in terms of the likelihood of an organisation undertaking fundraising, but also in the number of different types of fundraising activities it undertakes. Smaller organisations, for instance, are more likely to rely on fundraising revenue from gaming and less likely to rely on revenue from bequests/major gifts and events compared to larger organisations. Larger organisations are more likely to fundraise via bequests/major gifts, marketing, events and personal solicitation. Smaller organisations also tend to utilise fewer types of fundraising practices compared to larger organisations.

Organisational size also inﬂuences the number of partnerships that nonproﬁt organisations have with business, with larger organisations more likely to be more active than smaller organisations in terms of the number of business partners.
Industry (ﬁeld of activity). The nature of the data does not allow ﬁrm conclusions to be drawn with respect to the inﬂuence of industry (ﬁeld of activity) on resource mobilisation. Nevertheless, the ﬁndings do suggest that organisations in some industries, for example community services and health, are more likely to undertake certain types of activities such as partnerships compared to organisations in other industries.
Primary purpose. Nonproﬁt organisations whose primary purpose is public, rather than member serving, are more likely to have undertaken volunteer recruitment, have partnerships with business, fundraise and operate a commercial venture compared to member serving organisations.
Geographic location. Nonproﬁt organisations based in capital cities are more likely to undertake fundraising, volunteer recruitment and have business partnerships compared to those in large regional centres. Organisations from rural and remote areas appear to rely more on fundraising and volunteer recruitment than to have partnerships with business or to operate commercial ventures.
Age. Older nonproﬁt organisations are more likely to undertake fundraising, volunteer recruitment and operate a commercial venture compared to organisations that were established in the last 15 years.
Geographical scope of operations. Nonproﬁt organisations that are international in scope are much more likely to fundraise, recruit volunteers, have partnerships with business but less likely to operate commercial ventures. Organisations that are national in scope are most likely to have a partnership with business compared to all other organisations. In contrast, organisations that are local in scope are least likely to have a partnership with a business organisation.

Supports used

The study found that nonproﬁt organisations draw upon a wide range of resources, support and assistance in generating resources via fundraising, volunteers, partnerships and commercial ventures. Some types of supports appear to be used to a greater extent across all or most types of activities. This was especially the case for:

volunteers, including those that serve on their boards or management committees
paid internal staff
advice from the Board or a particular board member
information and support from not-for-proﬁt support organisations.

Other types of resources and supports that appeared to be relatively highly used included:

the services of a paid or unpaid manager or coordinator of volunteers
radio advertisements for volunteer recruitment
gaining information from books and manuals
gaining information from the internet
attending courses and training seminars on relevant topics
using an external consultant
seeking the advice of another CEO.

Organisations generally indicated that they found these types of support and assistance to be very useful. This was especially the case for paid internal staff and volunteers, including those that serve on their boards and management committees. The degree of usefulness of different types of support and assistance varied according to the type of resource mobilisation activity.

[ top ]

Reasons for lack of activity

Not all of the nonproﬁt organisations in the study were involved in either fundraising, volunteer recruitment, partnerships or commercial ventures. Some of the reasons for this were similar across all four types of activities. For instance, between one-quarter and one-half of the nonproﬁt organisations indicated they did not undertake activities because they had no need to raise extra revenue or volunteers, form a partnership with business or operate a commercial venture.

Another signiﬁcant reason why organisations did not undertake one or more of the activities was a lack of ﬁnancial and human resources. This was particularly the case for fundraising, volunteer recruitment and partnerships. This suggests that there is still a lack of knowledge about how to form partnerships with business among nonproﬁt organisations, one-third of those organisations that did not have a partnership with a business organisation stated that they would like to engage in a partnership but were not sure how to go about it.

The ﬁndings also indicate that the reasons nonproﬁt organisations do not engage in resource mobilisation activities are generally not due to a lack of support for the concepts of partnerships or commercial ventures or because their boards are risk averse. Rather, the ﬁndings suggest that nonproﬁt organisations require additional resources to undertake resource mobilisation activities.

Improving organisational capacity

Nonproﬁt organisations that had undertaken one or more of the four resource mobilisation activities indicated that a key factor that would increase their capacity in the future was having increased ﬁnancial resources. Having more human resources, such as paid staff and fundraising volunteers, was also seen as an important factor that would improve organisational capacity.

While ﬁnancial factors were also seen as relatively important in increasing organisational capacity for nonproﬁt organisations that had not undertaken one or more of the four main activities, a slightly different pattern emerged. These organisations were more likely to indicate that ﬁnancial and human resources as well as ‘knowledge’ factors, such as having a greater understanding of how to undertake some of the activities, as being important to improving their organisational capacity in the future.

In other words, those organisations that are already undertaking resource mobilisation activities have in the main jumped the ‘knowledge’ hurdle and need more ﬁnancial resources to continue to increase their capacity. They have experience and commitment to seek more resources, but need even greater capacity to build on this.

For those organisations that are not undertaking resource mobilisation activities, greater ﬁnancial resources would certainly be desirable but they still need to gain greater knowledge and expertise of how to undertake particular activities.

A number of key issues were raised by nonproﬁt personnel through in-depth interviews and focus groups conducted in support of this research. These are presented below under two broad headings of internal and environmental issues.

Environmental issues

Key environmental issues raised by personnel from nonproﬁt organisations included:

Rising costs of compliance and risk management. These demands arose across all entity sizes, but most acutely for small nonproﬁt organisations. Compliance issues included those associated with governance, qualiﬁcations for service delivery, accreditation, onerous evaluation and reporting on contracts and grants, and especially for some, GST. Key risk management challenges raised were those of public liability, and insurance risks inﬂuencing adversely the preparedness of nonproﬁt organisations to engage volunteers.
Issues in working with governments. Many felt that government funding was declining at a time when too few alternate sources of ﬁnancial support or skills to access government funding were available. Concerns about funding from governments included fewer dollars over shorter periods, inadequate adjustments for rising costs and little or no funding for infrastructure. Differences between state and national legislation applying to nonproﬁt organisations were commented upon and it was noted some felt these were complex, sometimes inconsistent and not always suitable. Some indicated that no reasonable legislative framework for transparency applies to nonproﬁt organisations. Poor coordination between government funding ‘silos’ and little valuing of nonproﬁt experience were mentioned. Governments were viewed as risk averse and perceived as pressuring nonproﬁt organisations not to advocate on behalf of disadvantaged groups.
Opportunities from private rather than government sources. Opportunities, including from private foundations, for business partnerships and fees for services were identiﬁed. Government encouragement of private sector giving was seen as highly desirable (eg. community business partnerships) – a lot of untapped philanthropy was felt to exist. While positive attitudes were expressed about such partnerships with business, this was qualiﬁed by feelings that they are difﬁcult to start and manage. There was a benign view that tax measures for giving might help.
Importance of credibility and transparency; concern about their costs. Concerns were expressed that the nonproﬁt sector was unable, unlike business, to pass on costs to clients in part because of a lack of public understanding of the costs of running an organisation. Some expressed the view that while ensuring transparency was favoured, it was noted with concern that this may have a negative impact on giving to speciﬁc organisations or to the nonproﬁt sector generally. These concerns seemed to contribute to short-term survival strategies with little future planning. It was felt that credibility needed to be (re)built as it has been affected by the taint of a few ‘bad apples’ highlighted in media reports and by the aggressive and offensive approaches of some.

[ top ]

Internal Issues

Key internal issues raised included:

Need for leadership. It was felt that leadership was needed at all levels – sector-wide, board and CEO. It was felt this could improve the capacity to address ﬁnancial problems and allow for organisational and environmental problems to be addressed.
Need strategic fundraising. Personnel speciﬁcally made mention of the need for stronger branding and closer donor relationships amidst stiffening competition.
Attracting, retaining and training fundraising personnel. This was seen as a real challenge. Key issues were seen to include a lack of training (especially in regional areas, or for learning how to attract business support), the need for more single-cause support networks (which could also help with tailored training), and that the profession was not attractive to many and often held in poor regard by the community, including other nonproﬁt personnel. A related issue is the discomfort level of donors concerning perceived high nonproﬁt salaries and beneﬁts.
Greater commitment needed to HR development. Many current education and training efforts were applauded but, it was felt, more conferences, seminars, templates and best practice guidelines were needed.
Need for more ﬂexible volunteering opportunities. Traditional recruitment practices, time commitment and activity use of volunteers were viewed as being less appropriate for new volunteer groups such as young people and baby boomer retirees. It was considered that there was signiﬁcant untapped volunteer capacity while some felt volunteers were treated poorly.
Needs of smaller and regional nonproﬁt organisations. Small nonproﬁt organisations felt they were limited in fundraising, but were desperate to learn more. The capacity of personnel was often limited and the costs of accessing training high. A need for innovation was expressed. Donor and volunteer fatigue issues exist in smaller states and areas which are tapping repeatedly into small pools of strong, local and loyal networks.
Cynicism. This was evident in some groups regarding capacity support programs from government. Some nonproﬁt personnel felt threatened by prescribed private funds taking money that may have ﬂowed earlier and directly to them.

Related to this research McNair Ingenuity has found that unprompted awareness of well known nonprofit organisations correlates strongly with a likelihood to give (Giving Australia, 2004).
Because these are such small numbers, the 95% confidence range is from 74,000 to 140,000.

Previous: The recipients of giving Next: Conclusion