Rise of Collecting Giving Sees a ‘Closed-Shop’ Approach – Report

The emergence of collective giving in Australia has the potential to substantially grow philanthropy but faces a number of challenges including the “closed shop” approach within philanthropic circles.

New research, led by Creative Partnerships Australia and commissioned by the Department of Social Services (DSS), documents the rise in popularity of collective giving groups in Australia.

The report, Collective Giving and its Role in Australian Philanthropy, looks at the relatively new model that involves individuals coming together and pooling their resources to fund social change.

Lead researcher James Boyd told Pro Bono News that through DSS, the Prime Minister’s Community Business Partnership was keen to identify what was new about this trend in philanthropy.

They also wanted to identify what had happened in the last few years with the view that there was a new type of collective philanthropy developing in Australia.

“One of the challenges identified in the research is the way collective giving has developed within philanthropic circles in a rather ‘closed shop’ way,” Boyd said.

“What we mean by this is that collective giving, as an attractive alternative to philanthropy, has really only happened within philanthropic circles. In nearly every case [studied in the report] the founders or the drivers of those collective giving initiatives have been people involved in philanthropy in some way or in the philanthropic, pro bono sector.

“What we found through the research was that there was limited motivation for individual groups to spread the word of their success or impact outside their membership because effective donor recruitment is close to home.”

He said the research also identified that 95 per cent of these groups were volunteer-driven so they had limited resources.

“They are putting their limited resources towards donor recruitment which is close to home and so there is no rationale for individual groups to really speak to mainstream media or to celebrate the impact they are having beyond their group or community,” he said.

“Which is why, simply, not enough people know about the idea of giving collectively and are not thinking about it or considering it.”

Since 2010 a number of organised models of collective philanthropy have developed in Australia.

The research drew on the experience of 17 giving groups with responses from founders, members, recipient charities and organisations that hosted these groups.

Online collective giving platforms such as Goodmob and My Giving Circle have joined Australian organisations such as Impact100, Women & Change, the Melbourne Women’s Fund, 100 Women and the First Seeds Fund in recent years.

The Funding Network Australia, which uses live crowdfunding events to bring donors and community groups together, is another example of the trend toward collective, or collaborative giving.

The research also looked at the impact that collecting giving was having both on the external impact on charities but also the potential impact on participants.

Charities favourably compared the grantmaking process of giving groups with other sources of funding, with most valuing the greater level of donor engagement.

As well for charities:

• 100 per cent believed receiving a grant from a collective giving group increased or greatly increased their organisation’s credibility;
• 95 per cent reported the benefits outweighed or were appropriate to the effort required to accept funding from a giving group;
• 81 per cent reported being able to leverage greater support as a result of being engaged with a giving group; and
• 78 per cent reported a valuable continuing relationship with giving groups.

Donors reported that engaging with donor groups substantially improved their philanthropic knowledge and changed attitudes and behaviours.

• 74 per cent learnt more about evaluation and assessment;
• 67 per cent gained greater awareness of community needs;
• 66 per cent experienced longer-term commitment to giving; and
• 70 per cent increased or substantially increased the amount they gave.

Another major challenge identified by the research was that there was currently no single source of information or support for people interested in starting a collective giving group in their community.

“Although the concept is simple, the research outlines several challenges new groups face and recommends basic support to help individuals and communities navigate the choices available to them,” Boyd said.

“There are some keys to success. For instance what structure do you put together, how do you make grant-making decisions, and are you offering your donors tax deductibility?

“Some of those decisions are quite difficult for those who are not familiar with the philanthropic sector and its quite difficult to navigate. So a little bit of support can go a long way.”

He said there were mechanisms to support these groups but they could be quite difficult to find.

“I think organisations in Australia could be resourced to respond to some of these needs,” he said.

“Philanthropy Australia is certainly in a good position to encourage collective giving and perhaps also provide basic information and support; the Australian Communities Foundation and community foundations generally are all in a good position to support collective giving initiatives locally or nationally.

“The gaping thing that is missing is a central point of advice and support… 

“Many of these groups can use very similar structures, much of the theory of their success is the same. They could also use templates for application forms, decision-making processes and there is a lot of duplication of work at the moment where a lot of these things can be centralised to make it easier for these groups.”

The research suggested that government intervention should be considered carefully and that government could help resource the philanthropic sector to better respond to the needs of giving groups.

“The key to the success for collective giving groups is their fierce independence and democratic process for decision making and grant making within their membership. Any government support certainly needs to be at arm’s length and carefully considered,” Boyd said.

“However there are plenty of opportunities if collective giving is something to grow in this country. There are plenty of opportunities to make it innovative and to get it up and running and reduce their costs and some of the challenges they face, and reward and help some of the more successful groups to build sustainability.

“As they become more successful, the administrative burden becomes greater so a rather nice way of supporting these groups is to support them to capacity-build once they have already been successful.”

Prime Minister’s Community Business Partnership member Alexandra Gartmann said the report highlighted the emerging trends in how people engage in philanthropy in the 21st Century.

“A key focus for the partnership is to identify and encourage new forms of philanthropy, bringing these to the attention of those who want to give, and those who are seeking partnerships – be that in government, business or the not-for-profit sector – and reviewing how traditional frameworks enable or hinder new approaches that could benefit Australian communities,” Gartmann said.

Creative Partnerships CEO Fiona Menzies said the report provided insight into the key characteristics of different models of collective giving and the impact of this new giving trend.

“Collecting giving can take many forms, but what these community-driven initiatives all have in common is the potential to cultivate more engaged, more knowledgeable and more lasting philanthropists, and to grow philanthropy in Australia overall,” Menzies said.

Creative Partnerships Australia is supported by the Australian Government through the Department of Communications and the Arts. Download the report here.