Key findings
Giving Australia has identified a growing proportion or rate of giving and increasing generosity in giving. This holds true for giving of money, and giving of time or volunteering and across giving by individuals and households as well as by business.
The giving of money, goods and services to nonprofit organisations by individuals and business is estimated by this research to total $11 billion in a year (this figure excludes giving in response to the Asian Tsunami appeals in late 2004-early 2005). This giving is comprised of:
- $7.7 billion from individuals. Of this, $5.7 billion was donated by 13.4 million people, 87% of adult Australians, in the year to January 2005. The average donation was $424 per year while the median donation was $100 (i.e. half of all donations were above this amount and half were below). A further $2 billion was provided by 10.5 million individuals through ‘charity gambling’1 or support for events.
- $3.3 billion from 525,900 businesses, 67% of all businesses in the 2003-04 financial year. Business giving consisted of 68% in money ($2.21 billion), 16% in goods ($0.52 billion) and 16% in services ($0.52 billion). Donations accounted for 58% of business giving ($1.9 billion – given by 58% of all businesses); sponsorship for 25% ($0.81 billion – given by 20%); and community business projects2 for 17% ($0.54 billion – given by 19% of businesses).
Giving of time by individuals, volunteering to nonprofit organisations, is also very significant. Key findings are:
- Of adult Australians, 41% volunteered in the year to January 2005 giving an estimated 836 million hours of their time at an average of 132 hours per year per volunteer. The median for volunteering hours was 44, half volunteering more and half less than this amount.
Nonprofit organisations: The recipients of giving
There are an estimated 700,000 nonprofit organisations in Australia, most of which are small and many depend on voluntary commitment. About half are incorporated and about 35,000 employ staff. There are approximately 20,000 organisations with Deductible Gift Recipient
3 status in Australia. For 1999-2000 the Australian Bureau of Statistics (ABS) (2002a) estimated the nonprofit sector’s total revenue at $33.5 billion.
Key features of giving to different fields within which nonprofit organisations operate include:
- Community and welfare service organisations receive about one in eight of all dollars donated by adult Australians. This sector receives over one-quarter of all hours volunteered and attracts 30% of business giving.
- Health nonprofit organisations, including medical research organisations, receive about one in six of all dollars donated by individuals, one in ten of all hours volunteered and almost 20% of the total value of business giving.
- Religious institutions are significant beneficiaries of donations by individuals, receiving more than one in three of total dollars. About one in six of all hours volunteered goes toward these institutions.
- International aid and development organisations receive about one in eight of all dollars donated by individuals. This does not include total giving of more than $300 million through Tsunami appeals in 2005.
- Education nonprofit organisations receive about one in twenty of all dollars donated by individuals and business. These organisations receive about one in eight of all hours volunteered.
- Environment and animal welfare groups receive about one in twenty of all dollars donated by individuals, about one in forty of total hours volunteered and less than 1% of the total giving from business.
- Sporting and recreation groups receive 3% of the total of all individual donations, about one in five of all hours volunteered and one in six of the dollar value of business giving.
- Arts and cultural organisations receive only a small proportion of individual donations and volunteered hours but receive almost one in ten of all dollars donated by business.
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Trends
Comparisons over time must be qualified, given that different methodologies applied, and so should be treated with caution. However, because a number of data sources have confirmed growing rates or proportions of donations of money and volunteering by individuals, there can be some confidence in the comparisons with earlier ABS findings.
Since 1997, giving of money by individuals has increased in absolute terms by about 88%, or 12.5% per year. In real terms, adjusted for inflation, giving rose by about 58% over those seven years.
The proportion of Australians who volunteer is rising. In 1995 the ABS (2003) estimated the volunteering rate to be 24% and total hours volunteered, 512 million. The average number of hours volunteered by each volunteer was 160 per year. In 2000 the figures were a volunteering rate of 31%, a total of 704 million hours and an average number of hours per volunteer of 160 per year. By 2002 the rate had increased to 34% (no estimates of hours were provided).
For the 2000-01 year the ABS (2002b) estimated total giving by business as $1.5 billion. As a result of methodological differences between that study and findings reported here, it is not possible to be definitive about the extent of growth in business giving, which has nevertheless been significant. Comparisons of the proportions for giving via donations, sponsorships or community business projects can be made with somewhat more confidence. Between the 2000-01 and 2003-04 years, the proportion of business giving through donations rose from 40.5% to 58%, community business projects have risen from 12.6% to 17% while sponsorships have fallen as a proportion of business giving from 46.7% to 25%.
International Comparisons
Comparing giving in Australia with the USA in 2004 we find that giving as a proportion of Gross Domestic Product (GDP) in the USA is 1.6% and for Australia it is 0.68%. In Canada, for 2000, donations were equivalent to 0.46 % of GDP. This indicates that when the differences in the size of economies is taken into account, the USA generates more than twice the level of giving than Australia, and Australians give about one and a half times as much as Canadians on average.
According to a large sample survey conducted in 2003 by the United States Department of Labor, 27.6% of Americans aged 16 and over volunteered during the twelve months to September 2002 (United States Department of Labor 2002). The median number of hours volunteered was 52 per year. A significantly higher proportion of Australians volunteered, but with slightly lower median hours than Americans.
In 2000, 27% of Canadians over 15 volunteered for a total of 1050 million hours, or an average of 163 hours per volunteer (Hall et al 2001). The rate has decreased since 1997, though the average hours volunteered has increased. It can be seen that a significantly higher percentage of adult Australians volunteer, but for fewer hours on average than Canadian volunteers.
Strengthening Giving
This overall increase in giving is likely to be the result of a number of factors. These include:
- the increasing size of the adult population in Australia
- sustained economic prosperity, with increasing numbers in employment and, for most, rising wages and disposable income for individuals and, generally, improved business profitability
- increases may also reflect greater and positive publicity for giving, a large increase in the number of nonprofit organisations seeking donations and the use of more sophisticated appeals and fundraising methods by some.
Drawing on the quantitative and qualitative research on giving, it is possible to identify some factors, and for these, some relationships or patterns. Such a summary is necessarily qualified by the observation that giving is diverse, taking many forms and performing different purposes. However, such a summary can provide a guide to understanding and identifying strategies for strengthening a giving culture in Australia.
Giving is influenced by the capacity of individuals and businesses to give, either financial or non-financial resources.
Giving can also be viewed as occurring along a continuum from altruism – with no expectation of return – through to giving that entails reciprocity of either implicit, explicit, more or less tangible returns to the giver.
The discussion of this research related to these factors is summarised below.
Capacity
Two relationships seem evident about the influence of the capacity of givers. These are:
Those with greater financial capacity give more. Wealthier individuals and larger businesses tend to give more, and more often.
Those with less capacity give what they can. Cash-poor individuals (eg retirees, younger people and, comparatively, women) volunteer at higher rates and/or for longer periods on average than do time-poor, wealthier individuals. Larger businesses give all forms of assistance to nonprofit organisations more often on average than smaller businesses. However, very small businesses have been found to more often give some specific forms of goods and services compared with larger businesses, also suggesting this ‘give what you can’ approach.
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Altruism and Reciprocity
Giving can be viewed as occurring along a continuum from, at one end, giving that is altruistic, through to giving that is reciprocated through returns to the giver. A number of points along this continuum can also be identified.
Altruistic giving. This is the most common reason popularly associated with giving and the one that many view as being primary. Giving to the Tsunami appeals of late 2004 and early 2005 is a good example. Such giving is often spontaneous or unplanned, for example as a reaction to a catastrophic event or an unexpected encounter, such as giving to street collectors or beggars. Altruistic giving is often anonymous and frequently no return to the giver is sought or expected, amounts given can be modest and only rarely are claims for tax purposes made.
Expression of identity or reputation. For individuals, giving can reinforce, or be a manifestation or expression of religious, social justice, environmental, aesthetic or other values. The return to the individual is often intangible, in the form of feelings. Tokens, such as badges or a flower can be symbolic for the giver but are usually of little material value. Social and other relationships can be important as factors reinforcing such values. In the case of businesses, giving may enhance the reputation of a business.
Community connectedness. The extent to which individuals or businesses are connected with communities seems to be a factor in giving. Individuals who are volunteers with or members (especially active members) of nonprofit organisations, give more than those who do not join in such community activity. Those who have used the services of nonprofit organisations also tend to give more and give more often. Individuals who have benefited most from the community – through, for example, higher education or high incomes – tend to give more and at greater rates. Business, especially smaller businesses in regional areas, often give to local causes. Many businesspeople and wealthier individuals respond well to requests for giving that are initiated by people within their networks or that involve those networks.
Reciprocity. In a number of ways individual givers may receive a material benefit for giving – this can range from fundraising dinners to more enduring items (such as T-shirts). The possibility of material gain can be extended through ‘charity gambling’. For business, giving to nonprofit organisations may result in profile or advertising and attract or retain customers (eg via sponsorship). Business may attract staff or improve staff retention rates or skills through employee volunteering or giving programs.
The reasons or motivations for giving, in practice, often reflect a mix of factors. Understanding these reasons can lead to better ways to strengthen giving and nonprofit organisations.
Sustaining giving is most likely when an understanding of motivations for giving are built upon by mechanisms that foster planned giving. A commonly held view is that giving is spontaneous. Indeed findings here are that 51% of donations are one-off, but often quite small. However, nonprofit organisations are most likely to be sustained by regular and generous giving built on a long term relationship with the giver.
Bequests and the role of foundations and trusts are among the infrastructure of planned giving. These entities 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, whose rates and magnitude of donations are growing. Prescribed private funds, while still small in number, 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 important. 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.
Findings from the Survey of Nonprofit Organisations confirm that 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 more heavily than larger ones on volunteers and charity gambling activities such as raffles and generally use a smaller array of strategies. These smaller organisations often lack both the resources to diversify their activities for generating resources and 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, especially financial and human resource 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 participation in focus groups and in-depth interviews. A range of issues have been 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. Sound research complemented by collaboration between government, business and nonprofit sectors should provide a framework for further development.