In the world of philanthropy and non-profit organisations, the availability of long-term, reliable data is rare and valuable. For over two decades, the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at Queensland University of Technology has been meticulously analysing data from the Australian Taxation Office (ATO). Our annual examination offers a unique insight into the patterns of individual giving in Australia, shedding light on the behaviour of a substantial portion of the population.
Why this data matters
The significance of the ATO data lies in the support it provides to Australian non-profit organisations with Deductible Gift Recipient (DGR) status. Individuals who make a donation to such organisations can deduct that amount from their taxable income, reducing their tax liability. It is the donations from individuals that allow these organisations to allocate funds to their chosen causes.
While we recognise the value of these individual donations to the beneficiary non-profit organisations, we know surprisingly little about the donors themselves. The analysis of ATO data contributes to the practices of non-profit organisations, enriching their stakeholder relations and aiding their efforts to expand their supporter base.
The primary aim of the ACPNS analysis is to explore and reflect on the long-term trends in individual-level tax-deductible giving data. By doing so, it provides valuable insights for beneficiaries, donors, peak bodies, and policymakers.
A snapshot of giving
Each year of data provides a detailed snapshot of individual giving. This includes gender, age, income levels and geographic locations of individual donors.
These key findings provide targeted information for single organisations seeking to grow their philanthropic funding, as well as for non-profit and public sector peak bodies. Policymakers and those seeking to grow giving nationally can target campaigns, incentives and interventions based on demographic data.
External events like the Australian bushfire summer of 2019-20, the COVID-19 pandemic, and the Global Financial Crisis serve as a backdrop to individual giving. It’s only when we examine this data longitudinally that we can truly understand how individual giving patterns have shifted in response to these challenges.
Consistent trends in giving
Our analysis reveals a remarkable consistency over the two decades in the percentage of taxpayers who donate. The overall trend is of a decrease in the proportion of taxpayers donating and this was found across genders, age brackets, income bands and states/territories. In terms of the highest percentage donating overall, this was those aged 45-59 years of age, females, those with a taxable income of $1,000,001 or more, and those living in the Australian Capital Territory. This has remained consistent since 2011-12.
The investigation of average donation also found very consistent results. The average donation increased in all but three years of the last two decades. Overall, males, those aged over 60 years and those with a taxable income of $1,000,001 or more contributed the largest average donations. However, when it comes to state/territory, there has been a change over the decade. Before 2016-17, those living in New South Wales gave the largest average donation. From 2016-17, however, Western Australia has consistently made the largest donation per giving taxpayer.
When examining donations as a percentage of taxable income, this analysis has shown that females, those aged 60 years and over, and those with a taxable income of $1,000,001 or more gave the greatest proportion of their income. In terms of state/territory, the Australian Capital Territory, New South Wales, and Victoria all gave larger percentages of their income until 2016–17 when Western Australia took the lead.
Limitations of the ATO dataset
However, it’s important to acknowledge some limitations of the ATO dataset. Firstly, it doesn’t encompass all donations to DGRs, or donations to charities and non-profit organisations that do not have DGR status. It doesn’t account for those who fail to submit a tax return or do so after the deadline. Furthermore, it doesn’t capture the giving by individuals who simply forget, lack receipts, or opt not to claim these deductions.
In addition, the ATO dataset also does not examine other forms of giving such as time or goods. In 2016, an estimated 43.7% of the adult population volunteered for charities and other types of non-profit organisations, and 77.1% gave goods.
Lastly, people who derive their income from superannuation (personal retirement savings) are not required to pay tax, and the absence of this population cohort from the ATO giving data presents an intriguing puzzle for researchers.
Implications for fundraisers and policymakers
Collectively, these findings offer valuable benchmarks for fundraisers and DGR organisations. Despite variations in demographics, there is an overarching trend of a decreasing percentage of taxpayers donating and claiming a deduction for their gift. This highlights the importance of addressing declining giving trends across all groups rather than targeting a specific demographic.
While top earners tend to donate more readily and in greater amounts, it remains crucial to explore opportunities to boost giving across all income levels. Notably, the average donation has increased over the decade, but for middle-income earners, it has remained relatively stagnant. This presents an opportunity to stimulate giving in this segment, potentially translating into larger contributions as their income grows over time.
Supporting vibrant Australian communities
It’s imperative to recognise the vital role of DGR organisations that receive these donations in supporting Australian communities. Sustainable and thriving non-profit organisations play a crucial role in enhancing the welfare of civil society in multiple ways. The financial support from individual taxpayers contributes core funding for their work and services.
The long-term patterns and trends revealed through robust analysis of such giving are indispensable for the philanthropic sector. They can influence public policies, which, in turn, affect giving and civil society. Furthermore, they directly inform the decision making of organisations, peak bodies, and regulators, ultimately shaping the future of philanthropy in Australia.
Working Paper
McGregor-Lowndes, M., Balczun, M., & Williamson, A. (2023). An Examination of Tax-Deductible Donations Made by Individual Australian Taxpayers in 2020-21: ACPNS Working Paper No. 76 Australian Centre for Philanthropy & Nonprofit Studies, QUT, Brisbane. doi: 10.5204/rep.eprints.242556
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