Australians Are Giving Less

The value of tax-deductible donations has dropped in Australia for the first time since the global financial crisis, with fewer Australians giving, and giving lower amounts, according to a new report.

Analysis of Australian Taxation Office data by QUT’s Australian Centre for Philanthropy and Nonprofit Studies has found a total of $2.9 billion was donated in 2015-16, which constitutes a 7.2 per cent decrease, or $221 million, from the previous year.

This is the first decrease following the GFC and comes after a large increase in 2014-15 where giving reached $3 billion.

According to the report, which was released on Thursday, while there was an “exceptional” 15 per cent increase in 2014-15, levels of giving are now much closer to the 2013-14 levels, suggesting the increase in giving has not been sustained.

ACPNS Emeritus Professor Myles McGregor-Lowndes told Pro Bono News the latest findings, while somewhat surprising, brought it back to the trend.

“You’re always surprised, because we haven’t had a downward trend since the global financial crisis. However last year was a very abnormal year. There was a very significant increase, particularly contributed by those with over $1 million or so in taxable income. So this brings it back somewhat to the trend,” McGregor-Lowndes said.

According to the latest report, the percentage of Australian taxpayers making deductible gifts has been in decline since 2011-12, decreasing from 34.58 per cent in 2014-15 to 33.40 per cent in 2015-16.

The average tax-deductible donation claimed by Australian taxpayers has also declined.

In 2015–16 the average tax-deductible donation was $633.72, which is a decrease of 6 per cent from 2013–14.

However there continues to be a pattern of people who are earning more, giving more.

Donating taxpayers with a taxable income over $1 million claimed average tax-deductible donations of $50,128.01 in 2015-16, which represents 1.22 per cent of their taxable income compared to the national average of 0.39 per cent. However this is a decrease from 2.57 per cent in 2014-15.

In 2015-16 donating taxpayers with a taxable income over $1 million represented 11.85 per cent of all tax-deductible donations, down from 21.1 per cent in 2014-15.

The latest report also shined a light on the professions and postcodes that were giving most.

McGregor-Lowndes said the postcode with the highest tax-deductible donations was 2030 in New South Wales.

“Residents there gave a total of $46.12 million, but we should keep in mind that the 2030 postcode takes in high-income suburbs such Dover Heights, HMAS Watson, Rose Bay North, Vaucluse, and Watsons Bay,” he said.

“The analysis also showed that chief executives and managing directors once again claimed the most tax deductible donations, at $277.55 million. Ministers of religion were also generous and made the highest deductible gifts in relation to their taxable income.

“When it comes to occupations with the highest percentage of donating taxpayers, police came out on top for the sixth year in a row, with almost three-quarters of officers giving, followed by school principals.”

In addition to having the top suburb, New South Wales also topped the country for the highest total deductible donations, followed by Victoria and Queensland.

“The Sunshine State gave a total of $380.06 million in deductible gifts but, interestingly, Queensland was second lowest on the list when it came to the percentage of taxable income donated. It managed just 0.26 per cent, compared to the national average of 0.36 per cent,” McGregor-Lowndes said.

Based on gender, women gave a higher proportion of their income than men, but men gave more overall.

The latest analysis is based on ATO data from individuals’ income tax returns and does not include giving by corporate and trust taxpayers or non-deductible donations, such as raffle tickets, sponsorships and volunteering.

Total giving (including non-tax giving) in 2016 was estimated to be $11.2 billion.

Read the full report here.