Collective Giving Trending for Australian Philanthropists

More Australian philanthropists are engaging in collective giving in addition to their normal giving, according to the first detailed report on philanthropy released as part of the national Giving Australia research.

More than a third of respondents to the Philanthropy and Philanthropists survey (38.5 per cent) said they were now participating in collective giving. This was on top of giving individually or through foundations.

Of those who participated in collective giving, 90 per cent indicated they were motivated by the desire to encourage giving in others.

The report said a working definition of collective giving was people coming together to pool or share resources for grantmaking and encompassed giving circles and established entities such as The Funding Network (TFN), Impact100, 10×10 and the Melbourne Women Donors Network as well as community foundations.

The Giving Australia 2016 project was undertaken by the Australian Centre for Philanthropy and Nonprofit Studies at the Queensland University of Technology, the Centre for Social Impact at Swinburne University of Technology and the Centre for Corporate Public Affairs on behalf of the Commonwealth Department of Social Services and the Prime Minister’s Community Business Partnership.

The latest findings deliver the first detailed report from the Giving Australia project by Professor Jo Barraket, director of the Centre for Social Impact at Swinburne University and research fellow Dr Christopher Baker also from Swinburne.

Project director Professor Wendy Scaife said: “In terms of collective giving, the fact that philanthropists are giving on top of what they are giving through their foundation is a stand out [in the survey] and it really cements that people enjoy this collective giving.

“It also points to the fact that we are starting to see people becoming far more open about their giving.”

The report said the frequently cited factors that influenced participation in collective giving were:

• capacity to participate (80 per cent)
• enjoying the process of giving with others (70 per cent)
• opportunities to be exposed to new causes (60 per cent)
• wanting to meet like-minded people (60 per cent).

“People are far more ready to be role models and the research showed that this was a key reason why people were happy to be part of collective giving, whether that’s going along to TFN and doing something a bit special or else it is hanging out in the giving circles and being part of the those like-minded groups of people,” Scaife said.

The report said that giving collectives were also seen as a means of engaging with the philanthropic sector in an accessible yet deeper way than individual giving and volunteering, without having to set up new structures.

“Another advantage of collective giving noted by participants was the assurance that some due diligence into the quality of potential funding recipients had already taken place prior to funding decisions being made,” the report said.

The report identified that challenges of collective giving included sustaining the large amount of time and effort required by organisers and the need for broader awareness of collective giving opportunities among philanthropists.

“Although some focus group and interview participants expressed concern that collective giving should not detract from other philanthropic activity and the longer-term support required to address persistent social issues, there was a sense of optimism that collective giving is attracting new philanthropists, encouraging giving and could provide an opportunity to harness resources that might not otherwise go to the nonprofit sector,” the report said.

The report found that impact investing was still seen as an emerging giving strategy among philanthropists.

A significant majority of survey respondents (80 per cent) indicated they either did not currently include impact investments in their fund’s portfolio, or did not know if impact investments were included.

The report said some young high net worth individuals (HNWI) described their use of impact investing and reflected a sense of optimism about the model, but also acknowledged that different questions and decision-making processes could arise when giving was linked to financial return as well as social impact.

“Impact investing I think it will grow. I think the supply is there but not the demand side, not the thought-through well resourced, committed, high calibre type of activities that impact investing could go into,” Scaife said.

“I believe it is a matter of time. It’s good to know that it is on the lips of people and we have early adopters. I think for a lot of people it will be: ‘well ok, it will be permission-to-succeed stuff,’ once people see that other people have taken the plunge… and it will move into the mainstream.”

The report showed that the number of high net worth individuals had doubled over 10 years from 146,000 in 2005 to 234,000 in 2015.

“It ties in with previous research that we have fewer people giving but those who are giving more. That’s a bit of a worry. I still don’t think that we have found that magic formula for engaging people who have got good discretionary income in giving,” Scaife said.

“Still there are a lot of people who have got a great capacity to make a huge difference in their community and it’s not that they are mean it’s just that they haven’t been engaged or been asked by the right people despite the fact that we have a far more sophisticated and experience fundraising sector.

“We know from the tax data that four out of 10 HNWI are still not giving or not claiming tax deductions.”

Scaife said the message for not-for-profit organisations was that there were opportunities for diversity in giving.

“We are not doing as much as we could to embrace people of diverse backgrounds who might be giving in different ways but certainly have a culture of giving,” she said.

“It comes through in the research, the culture whether it be family or religion or ethnographic background, they are all very strong influencers on how and where and how much people give and we are probably not as a NFP sector thinking beyond the mainstream.

“What I am saying to NFPs is have a look at your own internal organisation. How mainstream is it and how diverse is it? Have a look at your board room and have a look at your fundraising team, have a look at your written delivery and signage and other information across the organisation. Is there a need to just think more in line with what is the true landscape of Australia?”

Barraket said the bad news was that the quantum of giving hasn’t changed in Australia over the last 10 years.

“The better news is that the people who are giving are more diverse and particularly through new technologies and the revival of older collective giving strategies such as giving circles it means that there is more tier-based giving going on,” Barraket said.

“Because the nature of giving is changing to some degree through mechanisms such as crowdfunding, and while we captured this in the qualitative research, there are these forms of giving that are occurring that create opportunities as well as challenges for the more traditional not-for-profit organisations.”

Minister for Social Services Christian Porter said: “This research will establish benchmark data to measure progress on philanthropic giving, and a strong basis for policy decisions to encourage charity in Australia.”

“Giving Australia 2016 is Australia’s largest ever review and analysis of giving and volunteering, with Commonwealth government funding of $1.7 million.”