Big philanthropy masks a decline in giving by ordinary Australians

Over the last few weeks Koda has been meeting with fundraisers representing some of Australia's best-loved charities and we’ve found almost all of them are increasing their focus on major donors and philanthropy in order to raise money. Behind this change in approach is a growing sense that giving by the general population may be in decline. Just a few weeks ago, Roy Morgan’s survey of face-to-face interviews with more than 50,000 Australians found only 60% of people donated to charity over a 12 month period, compared to 62% the previous year, while the average amount donated has fallen in real terms since 2014.

So, should fundraisers be worried? We think there is good reason to pay close attention to a trend we first reported in our 2015 Koda Capital Australian Giving Review, which set out ideas to provoke discussion about how giving can be encouraged in Australia. This report revealed that growth in deductible giving was sluggish and the proportion of people giving had flatlined. It also pointed to the fact that 67% of the total donation amount claimed was gifted by just 7% of our giving population. In our 2016 Australian Giving Snapshot we reported that giving outside of donations to Private and Public Ancillary Funds fell, as did the proportion of tax-payers claiming a tax-deductible gift; while Australians made 102,751 fewer tax-deductible claims overall.

Our new Snapshot of Australian Giving echoes what we foresaw in our 2015 and 2016 research. It paints a positive picture of philanthropy and a less rosy picture of giving in general. It notes that, by several measures, giving is shrinking, the base of the Australian giving pyramid is getting smaller and all the action is at the top. It goes on to say that Koda considers that giving levels in Australia are increasingly determined by larger amounts donated by a small cohort of wealthy Australians and that this masks two important concerns: a failure to grow the proportion of Australians who give in a meaningful sense and a reduction in the level of support charities can expect from everyday Australians. Unless everyday Australians experience a significant uplift in their income and wealth, influential giving may become a pastime of the well-off.

Our latest Snapshot goes further, to question whether Australia is entering an era where giving increases and traditional charities struggle to attract support. Overall, powerful forces seem to be at work and these forces may result in major shifts that will impact Australian fundraisers. For example, the concept of a charitable organisation may need to be re-imagined, as governments look to pay for success, donors move away from hand-outs and charity leaders begin to re-position their organisations as sustainable social enterprises.

Traditional fundraising charities may face very real funding challenges in a country where growth in the giving population is not evident and new money comes from a smaller number of wealthier donors who exert influence and expect a return on investment. 

We are fascinated by the forces that shape Australia’s giving culture and we spend a lot of our time helping donors and fundraisers to navigate the world of philanthropy. If we can help you, please don’t hesitate to get in touch.