Sydney, Australia
With 59,000 charities across Australia and an increase in the cost of living, some might think the non-profit sector is stretched when it comes to donor giving. The opposite is true.
In fact, charities generate almost $A190 billion from donations and employ 1.42 million people.
GRAPHIC: Courtesy of McCrindle
“The reach not-for-profits have in both revenue, staffing and volunteering is massive,” said Mark McCrindle, founder and principal of McCrindle, an Australian-based research organisation which has released a new report on giving. “So much so that there is one charity for every 433 people in Australia.”
Analysing data from 1,506 donors across Australia, the report, Empowering Impact: Understanding giving behaviour, volunteering, and advocacy in the not-for-profit landscape, revealed giving trends and observations on the impact of the charity sector that McCrindle said “cannot be overstated”.
“Without the NFP sector, people would simply earn money without being able to give to causes or others and serve the communities they’re a part of,” he said. “By providing opportunities for individuals to volunteer and contribute you offer people opportunity to give back.”
The top three not-for-profit areas receiving the majority of donations are religion, human services, and education, and five in six Australians give financially to such charities. Though it’s been more than 10 years since McCrindle commissioned this kind of research, the primary findings reveal that young people most want their giving to make a visible difference, that few differences exist in regard to giving among cultural diversity and that despite economic challenges, giving remains resilient and stable.
Causes to support varied this year from rankings gathered in 2023. For instance, children’s charities now rank as the top cause to support with highly motivated givers, followed by mental health, homelessness, animal welfare and wildlife support. Medical and cancer research dropped from the top position to fifth in the study. Twelve per cent of Australians believe that small charities duplicate bigger ones, though 40 per cent believe small charities meet needs as well as larger organisations.
Understanding such giving behaviour can accelerate the impact of not-for-profits, according to Ashley Fell, McCrindle’s director of advisory, who identifies six generations of donors according to age group (from Builders and Baby Boomers to Gen Z and Gen Alpha). She says the data indicate diverse giving patterns accordingly.
“It’s important to engage younger generations when they’re not giving in the same ways as older, committed givers gave,” Fell said. “It’s worth [understanding] the preferences since many donations are often spread across charities rather than committed to one organisation.”
GRAPHIC: Courtesy of McCrindle
Despite the increase in Australia’s cultural diversity, giving patterns and motivation remain largely the same across ethnic backgrounds in terms of opportunity givers (ie, one off or giving at least annually) and committed (loyal) givers. The report determined giving behaviour is consistent based on homes who spoke languages other than English and those who spoke English only.
“It’s important to understand that in the last year alone, there were over 500,000 new migrants in Australia in the last 12 months,” said Geoff Brailey, McCrindle’s director of solutions. “Australia grew by 624,000 people in the last twelve months, so there’s plenty of opportunity and need to connect with these new residents who may have never heard of your charity before.”
The report also concluded that “despite concerns of empathy fatigue due to global unrest and the consistent visibility of need, donor motivation and engagement in giving remains steady. A third of donors (33 per cent) are unchanged in their motivation or financial giving from three years ago. In fact, for a quarter of donors (26 per cent), their motivation and financial giving have increased over the past three years.”
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There has also been an increase in volunteerism among Gen Z (ages 18-29) and Gen Y (ages 30-44) in large part because of the role of social media in helping promote and raise awareness for specific causes or charities, though the report suggests that word of mouth remains the greatest form of advocacy. Forty eight per cent have spoken to others about a cause.
Nonetheless, “disruption is coming to the charity sector,” said Sophie Renton, McCrindle’s managing director. “There is a shift away from charity to cause, growth to advocacy and giving patterns are being redefined by the emerging generation.”
Renton believes loyalty is no longer to an institution but to a cause, which invites charities to determine how best they can position their cause rather than their brand to create more engagement. An Australian-based charity is 90 per cent more likely to engage the next generation than a multinational. Yet 61 per cent are more likely to give to a start-up charity with 31 per cent giving to an established one.
“Established charities should thinking like a start-up but leverage the brand legacy to increase engagement,” Renton said.
Almost one in 10 Australians work for a not-for-profit and over 80 people from the largest sector of employment joined a recent McCrindle webinar to review the report.
