Givewell Reports on the 'Tsunami' Factor

Givewell’s eighth annual study on how Australian Not for Profits manage their assets reveals that the main fundraising winner in 2004-2005 were those most influenced by the tsunami factor.

This year’s Givewell analysis of the financial data of more than 500 charities explores the ‘tsunami factor’, and found significant increases in fundraising revenue in response to the tsunami appeals. The data was presented at Ethical Investor Magazines’ recent Nonprofit Finance Forum in Sydney and Melbourne

The report provides analyses of the financial information both with and without those charities most influenced by the tsunami factor.

Givewell’s identified trends for the 2005 financial year include:
– sustained income growth – up 11%
– continued, though slower, increase in government funding – up 7%
– increased growth in investments – up 10%
– increase in fundraising revenue (excluding bequests) – up 44%
– increase in fundraising revenue (excluding bequests) for main recipients of tsunami – donations – up 88%
– increase in fundraising revenue (excluding bequests) for others – up 9%

As would be expected, Givewell’s Executive Director Michael Walsh says not only did their revenues increase substantially but the funds being held for future projects contributed to significant increases in their investments and income derived from them.

Walsh says this group of charities also gained from the media attention given to the tsunami disaster, which provided them with what amounted to free advertising and thus considerably lowered their fundraising costs.

He says the benefits flowing from the tsunami factor – in the form of investment income and raised profiles – will still be felt in the current financial year. However, if donors become critical of how their money is being spent and accounted for, then they might be less ready to put their hands in their pockets to respond to other appeals.

For those charities that did not have tsunami appeals, the positive trends of the past years continued unabated, according to Givewell and the sector as a whole experienced a healthy growth in fundraising revenue.

Givewell says the drop in government funding for some sections and the overall slowing down of this source of revenue across the charitable sector as a whole is a trend that charities will need to be aware of. Many may feel the need to decrease their reliance on this revenue stream.

Link: www.givewell.com.au.