FR&C - BLOG

In major gift fundraising, a key to planning and strategy is understanding the wealth and giving of major donors and prospects. We think about how much we believe people can give, but what do we know about how much people do give?

With the Australian governments goal to double philanthropic giving by 2030, it is useful to have a look at the existing giving statistics of the wealthiest cohort of Australians.

The $1M+ group is a tricky one and there are enormous variations in giving which skews the percentages, so it is useful to look at this group in more detail.

The largest subset in this group is those individuals whose total income is $1M+ and taxable income is $1M+. This group makes up nearly 95% of the $1M+ earners. There are 18,668 individuals in this subcategory, and 9,082 claimed a charitable deduction (48.6%). This means that over half of the taxpayers in this group do not claim any charitable giving at all. For those who do, the average claimed is just over $43K, which would be a maximum of 4% of total income, and likely a smaller percentage (assuming most have income well above the bottom limit of $1M).

On the flip side, there were 45 individuals with a total income of $1M+ whose taxable income was reduced to less than $6K through various tax treatments – of these 45 individuals, 15 claimed charitable donations totaling a whopping $812M, or an average of $54.1M each. Presumably, these would have been payments into PAFs. Thirty of these 45 individuals did not claim a charitable deduction and reduced their income in other ways.

A key takeaway is that there is not a set amount that people give - regardless of income. The capacity to give and the inclination to give varies greatly from person to person. This highlights the importance of understanding your donors and not only their giving priorities, but the level at which they are comfortable giving.

So where does that leave us? Quite optimistic – there is a lot of potential for increased giving at the major donor level. However, it also tells us that there is a lot of work to do to promote philanthropy among the wealthiest Australians, especially to achieve the Australian government’s goal of doubling philanthropic giving by 2030. A key to achieving this goal is to continue to normalise philanthropy as something that everyone can be a part of.

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2021 ATO charitable giving tax stats for individuals - giving of $25K+ now accounts for 54% of deductions claimed!

8/8/2023

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It is time for a deep dive into the latest ATO charitable giving tax statistics from the tax year 2020 – 2021! Over the next few weeks, we will look different segments of data within the ATO’s tax tables to see what the it can tell us about Australian giving.

Today, we will look at the big numbers for individual giving:
- Total deductions for charitable giving in 2020 – 2021 was $4,391,841,375 – which is an increase from 2019 – 2020 of over $545m.

- In continuing with the growth trend that we have noted for the past 10 years or so, 54% of that $4.3bn total was claimed by those giving $25K+, so more than half of all giving is claimed by those whom we broadly would consider major donors. Back in 2011 – 2012, only 28% of giving came from those claiming $25K+ in charitable deductions so it is fantastic to see sustained growth of major giving over the past decade.

- Moreover, 54% percent of all giving ($2.3bn) is claimed by a tiny number of donors – 8,442 or .2% of all people claiming charitable donations. The number of donors giving at this level has steadily increased over the past 9 years, from 4,515 in 2012, while the overall percentage of donors giving at this level grew from .1% to .2%.

However, in 2021, there were 18,668 individuals with taxable income of $1m+, and a further 47,646 individuals with taxable income of $500K - $1m – so there is certainly room for significant growth in the number of people claiming charitable deductions at a major gift level.

- In addition, the average gift made by individuals claiming $25K+ has nearly doubled since 2012. Back in 2012, the average deduction claimed by this group was $142K and by 2021 the average deduction has climbed to $281K. Given the rise in wealth over the past decade this isn’t particularly surprising.

Note: Individual giving tax deduction stats capture giving into PAFs and PuAFs, but not distributions from PAFs and PuAFs - that data is published separately!

Is there a particular segment of the latest data you want to hear more about? Let us know!

Upcoming posts – what can people give vs what do people give and the growth of middle donors

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Private Wealth talks about the shifting focus of philanthropists, who are increasing focusing their giving on select causes, "using their money, ideas and strategic partners to address some of our most intractable, long-term social and environmental problems."
https://www.fsprivatewealth.com.au/blogs/giving-more-thoughtfully?utm_medium=email&utm_source=WildebeestNewsletter

Philanthropy Australia breaks down the key takeaways in ACNC Commissioner Sue Woodward's first Australian Charities Report since stepping into the role:
https://www.philanthropy.org.au/news-and-stories/philanthropys-growth-rate-spotlighted-in-acncs-charities-report/?apcid=00648be979b9f94a813cab00&utm_campaign=clarification-of-378-23-ju&utm_content=clarification-of-378-23-ju&utm_medium=email&utm_source=ortto

The Australian Financial Review notes that philanthropy in Australia is not growing fast enough to reach the government's goal of doubling philanthropy by 2030, but changes to superannuation might be part of the solution:
https://www.afr.com/wealth/personal-finance/philanthropy-not-growing-fast-enough-to-meet-labor-s-2030-target-20230620-p5di1v

Andrew and Nicola Forrest make the large philanthropic gift in Australian history with the transfer of $5bn in Fortescue shares to the Minderoo Foundation
https://www.afr.com/wealth/people/forrest-mega-gift-to-cajole-other-billionaires-to-give-more-20230621-p5dibv

And finally, The Australian talked to Frank Costa's widow Shirley and two of their daughters on his philanthropic legacy and $1m bequest to SecondBite:
https://www.theaustralian.com.au/business/leadership/a-gift-from-above-frank-costas-legacy-lives-on/news-story/24247b29da9a4940502c6f7918245b8a

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Everything you always wanted to know about PAFs...

22/2/2021

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New in February 2021: Everything you always wanted to know about PAFs but didnt know where to look.........

We've put everything we know about researching PAFs into a new article: you can download it here

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How are philanthropists responding to the Covid crisis?

28/5/2020

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A summary of recent events and the results of Philanthropy Australia’s survey of grantmakers

Everyone has been in plenty of webinars these past few weeks as we all strive to get a handle on what is happening in the not for profit community and the best ways to move forward. It seems not surprisingly that different sectors are affected very differently from one another, with some organisations seeing an upsurge in donations, including major gifts, while others are talking about drastic drops in income.

Meanwhile, members of the Neilson and Ainsworth families and other philanthropists stepped in to offer multi-million dollar support to save Sydney’s Carriageworks from collapse, Philanthropy Australia has partnered with Australian Communities Foundation to create a Covid-19 national funding platform where charities can post their costed projects to be considered for funding, and a group of arts and culture philanthropists combined under the auspices of the Philanthropy Australia Arts Funders Network to provide a $1.5m support program of smaller grants to artists and arts workers.

In his April report for JBWere, Where to From Here: the outlook for philanthropy during Covid-19, John McLeod predicts that after growth of almost 5% in each of the last two years, total philanthropic giving in Australia will fall by about 7% in 2020, and by a further nearly 12% in 2021, taking the total figure back to 2012 levels. Specifically in relation to foundation and structured philanthropy, he suggests that the main downward effect of giving is likely to be seen in the year following a major equity market fall, and also suggests that, as in 2008, we will see a slowing in the rate at which new PAFs are established.

This week, Philanthropy Australia surveyed their grantmaking members on their response to the challenges of Coved-19, with some very interesting results.

Of 101 surveyed, 88% were changing their granting approach in response to C19; responses include increased flexibility, untying restricted funding, increasing support, and establishing dedicated C19 grant programs

Specific initiatives have also included funding additional capacity-building in digital, supporting advocacy work for vulnerable groups, providing expertise and mentoring, and offering non-financial support

Interestingly, it isn’t all going to existing partners – 60% say they are offering grants to new partners around C19, with nearly 40% saying they will increase 2019-20 funding amounts and less than 8% saying they will decrease funding. The picture for 2020-21 is less clear, with the majority saying either that funding will stay at the same level or that they have not yet considered this question. 22% are saying they will increase funding in 2020-21.

It seems likely that some of the increase will be related to the actions government has taken to encourage PAFs and PuAFs to give more than their required donation percentages, in return for the ability to proportionately decrease future distributions, and does raise the question of what the longer term effect will be on distributions, especially as these foundations will expect that their investment income will be affected by any economic downturn.

Related to this, 30% of respondents say they have already decided to use, or are considering using, capital to offer loans or other social finance options to increase support.
On the question of whether the value of their corpus has declined since C19, 32% say that it has, and it will result in lower distribution levels, although a higher number, 51%, said it has, but they will maintain giving levels.
Both of these things have the potential to affect longer term levels of giving.

Anecdotally we’re hearing that some organisations are holding back from asking for gifts, especially major gifts, often due to board members thinking it is inappropriate right now; at the same time we are hearing great success stories from those organisations who think about their core purpose and stay in clear and open communication with their supporters about the needs they are addressing.

We’ve even heard that some major donors who will never accept invitations to physical events are showing up to Zoom meetings or engaging in long and productive phone conversations. One of the really interesting outcomes from the present time will be to see how far innovative organisations maintain the new and productive methods they’ve come up with to keep fundraising. And the thing we do know, is that it’s vital to keep fundraising.

It may be a difficult time to recruit new donors unless you are an organisation with a purpose directly related to the current crisis, but it’s more important than ever to maintain your links to existing supporters, whether they are individuals or foundations, and to deepen your understanding of who your supporters are.

Links
Philanthropy Australia
JB Were
Carriageworks story
https://communityfoundation.org.au/covid-19
https://myerfoundation.org.au/news/national-assistance-program-for-the-arts/

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Another landmark year for Australian philanthropy

6/2/2019

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2018 – another landmark year in Australian philanthropy
2018 was another landmark year for Australian philanthropy, continuing the transformation that we have seen in the Australian giving landscape over the last half-dozen years.

The biggest philanthropic news came at the end of the year - the loss of Stan Perron, already an extraordinarily important donor in WA, will not mean the end of his philanthropic legacy, with the bulk of his $4 billion fortune going to his foundation.

This bequest will make a big difference in several ways. Firstly, from a giving perspective it means we now have another very large foundation on a similar scale to the $4bn+ Paul Ramsay Foundation. Secondly, of the three Australians who have now given or pledged over $1bn (Paul Ramsay, Andrew Forrest, and Stan Perron), two are from WA - a rebalancing of philanthropy's centre of gravity away from the eastern states.

The two biggest gift announcements of the year were both for $100m:
•             Judith Neilson announced a $100m gift to support the Judith Neilson Institute for Journalism and Ideas.
•             Andrew and Nicola Forrest's Minderoo Foundation announced a $100m commitment to their Minderoo Ocean Research (MOR) Initiative, with a range of partner organisations.

Early in 2019, we also saw Australia's biggest ever fundraising campaign meet its target, as the University of Sydney announced it had reached its $1 billion objective, an unprecedented landmark in Australian philanthropy.

Big gifts in higher education in 2018 included:
•             $30m to LaTrobe University from an anonymous donor, helping the University to reach its $50m campaign goal, and set a new target of $100m
•             $30m to the University of Melbourne from Jane Hansen and Paul Little
•             $16.4m from the Paul Ramsay Foundation to the University of Newcastle
•             $13.5m from Andrew and Paula Liveris to the University of Queensland
•             $10m from Marcus Blackmore and Caroline Furlong to Southern Cross University
•             $10m from Len and Margarete Ainsworth to Western Sydney University
•             $10m from the Kinghorn Foundation to the Australian-American Fulbright Commission to support Fulbright Future Scholarships.

In other higher education news, Monash University launched its largest ever fundraising campaign, with a target of $500m.

The Ramsay Centre for Western Civilisation was much in the news - while ANU withdrew mid-year from negotiations to establish a Ramsay-funded degree in Western Civilisation Studies, the University of Wollongong reached an agreement to establish a degree, worth a reported $50m in funding over eight years.

The Ramsay Foundation itself announced a major change with the appointment of a new CEO, Professor Glyn Davis, taking over from inaugural CEO Simon Freeman.

In the arts, we saw another landmark project meet its target as the Art Gallery of NSW successfully concluded the capital campaign for its Sydney Modern project, exceeding its $100m target, and foreshadowing an intended art acquisition campaign to be launched in 2019.

With one major arts project coming to fruition, another was being announced, with Victorian premier Daniel Andrews signalling a major redevelopment of Melbourne's arts precinct, with ambitious philanthropic support needed to see the project through.

In the health sector, big gifts included:
•             The Paul Ramsay Foundation's gift of $11.33m to the Burnet Institute's Eliminate Hepatitis C Australia Partnership
•             The late Geoffrey Carrick's bequest of $9.85m to the Royal Flying Doctor Service and Children's Hospital Foundation
•             A $5m gift by Carl and Wendy Dowd to the Florey Institute, matched by another $5m from Florey Chairman Harold Mitchell
•             $2.5m from Neil Balnaves and the Balnaves Foundation to the Menzies School of Health Research's Hearing for Learning initiative

In sport, Hawthorn FC major donor Geoff Harris made a lead gift of $10m in support of the club's move to Dingley.

Finally, 2018 was notable not just for the financial contributions made by Australia's philanthropists, but also by their involvement in public advocacy. Perpetual's Caitriona Fay summed up 2018 as 'the year philanthropy fought for democracy.' And Philanthropy Australia's Sarah Wickham noted the support given by The Myer Foundation, The Snow Foundation, The Fay Fuller Foundation and The Wyatt Trust to the Australian Council of Social Services (ACOSS) Raise the Rate Campaign to reduce poverty in Australia.

In total, we counted more than 80 publicly announced gifts of between $1m and $100m in Australia last year, and FR&C's updated list of Australian $1m+ donors can be found here.
When we started this list in 2011, there were 100 $1m+ donors, and Australia's biggest giver was an Irish-American, Chuck Feeney (still near the top with US$368m in Australian giving).
That list now contains 350 donors, two of whom have established foundations with assets in the billions, and two more who have pledged to give away at least half their wealth.
Expect more changes in the years ahead!

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We're now able to offer data screening in New Zealand

26/6/2018

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Happy to announce that we have added a screening database for New Zealand not for profits to our range of services. We've tested it with organisations in education and charity sectors with good results. If you're interested in screening your NZ names, please get in touch!

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2017 – a phenomenal year for major gifts

13/2/2018

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Australian philanthropy has seen big changes in the past five years. 2013 was a record year for Australian giving, with over 50 $1m+ gifts made publicly for the first time, the record for Australia's biggest donation being broken three times, and Andrew and Nicola Forrest becoming the first Australians to join the Giving Pledge, publicly promising to give away at least half of their wealth.

Since then, we've seen major philanthropy continue to grow in Australia, and 2017 was no exception. Here are some of the big gift announcements from last year:

Australia's richest man, Mr Anthony Pratt, pledged to give away $1 billion during
his lifetime.
Andrew and Nicola Forrest pledged to give $400m to six priority areas – cancer, modern slavery, creating parity, early childhood, research, and communities. The Forrests also helped UWA to close its $400m campaign with a $65m gift, and gave $10m to support improved outcomes for brain cancer patients.
Joining the Forrests as a Giving Pledge signatory in 2017 was billionaire philanthropist Len Ainsworth.
Australia's richest foundation, the Paul Ramsay Foundation, built on its number one position in last year's AFR Philanthropy 50 by announcing a number of gifts, including a reported $30m per annum to support the Ramsay Centre for Western Civilisation, $24.5m to the Murdoch Children's Research Institute for their Generation V longitudinal study, and $13m to Telethon Kids Institute for their ORIGINS project.
The Ian Potter Foundation announced multiple new major grant initiatives including $5m towards the University of Tasmania's Creative Industry and Performing Arts (CIPA) project, $4m towards the Ian Potter Southbank Centre for the Melbourne Conservatorium of Music, and multi-million dollar grants to HammondCare, Clontarf Foundation, Guide Dogs Victoria, ANU, Hope Street Youth and Family Services, Seed Foundation, the Australian Ballet, Homes4Homes, and Griffith University.
The Art Gallery of NSW announced it had reached $88m in philanthropic support for its Sydney Modern project including a $20m gift from Isaac and Susan Wakil, and gifts of $5m or more from the Ainsworth family, the Lowy Family, Kerr Neilson, Mark Nelson and Gretel Packer.

There were several other gifts over $5m:

Alibaba founder Jack Ma announced a $26.4m gift to the University of Newcastle to fund the Ma & Morley Scholarship Program.
Flight Centre CEO Graham Turner and his family foundation announced an $18.5m gift to the University of Queensland in support of a wildlife conservation and breeding project.
Marcus Blackmore and his company announced a joint $10m gift to the National Institute for Complementary Medicine.
The State Library of Victoria received $8m from John and Miriam Wylie, and another $3m from Allan and Maria Myers, towards their capital refurbishment program.
Arts philanthropist Judith Neilson gave $6m to fund a Chair in Contemporary Art at UNSW.
Christine and Bruce Wilson gave $5.5m to fund the Christine and Bruce Wilson Centre for Lymphoma Genomics.
Hunter Medical Research Institute received an anonymous $5.2m gift to improve access to high quality health care for vulnerable and remote communities across NSW.
Pamela Galli gave $5m to establish the Lorenzo and Pamela Galli Chair in Medical Biology at the University of Melbourne and the Walter and Eliza Hall Institute.
The Brazil family gave $5m to the University of Queensland in support of clinical collaboration in stroke and motor neurone disease research.
Gina Rinehart announced a $5m gift to St Vincent's Private Hospital, Sydney.

Other notable gifts in 2017 included:

Peter and Ruth McMullin's donation to fund the Peter McMullin Centre on Statelessness at the University of Melbourne.
Qantas CEO Alan Joyce's $1m donation in support of marriage equality.
A $3.75m gift by Hong Kong's Li Ka Shing, to support precision oncology research at the University of Melbourne Centre for Cancer Research and the Peter MacCallum Cancer Centre. Mr Li is Hong Kong's richest man, and his Li Ka Shing Foundation has given away over US$2.6bn.

FR&C's list of Australian $1m+ donors now features twelve $100m+ donors, seven $50m+ donors, 62 donors with known or estimated giving of $10m+, and another 55 with known giving of $5m+. The total list stands at 334 and can be found here.

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January 08th, 2018

9/1/2018

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Here's How to Fine Tune Your Major Gifts Program...

....is the heading of a very kind article that Roewen Wishart wrote about our book last year, published in Fundraising & Philanthropy magazine

Here's a link
And here's the article

Roewen Wishart explores the ins and outs of starting/refocusing major gift fundraising and finding essential linkages so you can fine-tune your major gifts program.

Australian major gifts and capital fundraising will benefit for years from the publication of Understanding Major Donors: A Guide to Prospect Research for Australian Fundraisers by Charlotte Grimshaw, Molly Masiello and Conor McCarthy.

Fundraising managers and major gifts specialists face the challenge of how use the information generated by prospect research and apply it to decision-making, priority setting and planning. Here are two vexed questions, and some answers.

Choosing where to start or how to refocus
Fundraisers commonly face one of two problems. One is: how to start a major gifts program with an established mass donor and/or ‘founding donors’ base.
A converse is: how to refocus a major gifts program that has become swamped with too many prospects and staff time spent on activity that doesn’t generate enough ‘hot prospects’.
Major gifts staff are trained to look for potential and to understand the need for cultivation steps to build donor engagement. It’s easy therefore to ‘hang on too long’, hoping that a donor’s or prospect’s engagement can be built.
In both these cases, a new (or revisited) method of linkage, ability and interest scoring is a good place to start. The method covered in chapter four is a good practical guide. It suggests a five-point scale for each of the three criteria (effectively from ‘nil or nothing known’ to ‘very strong’). And it makes the important point that financial ability warrants extra weight; a donor with relatively weak demonstrated linkage and interest but very large giving ability warrants more attention than another donor with the same ‘total score’ but only moderate ability.
I have found two important additional factors for organisations both large and small. First, the LAI score needs to only be sufficient to identify the relatively strong and relatively weak. If current resources allow, for example, one full-equivalent major gifts officer, my observation is that about 80 donors and prospects is about the maximum portfolio size in which each can receive the attention warranted. (This can be more in some organisations which can extensively support major gifts officers with prospect research and administrative back-up.)
The LAI scoring process usually starts with an apparent pool of ‘unqualified prospects’ (for example, anyone who gave $500 in the past three years, excluding peer-to-peer sponsors). If there are 150 unqualified prospects, a LAI scoring with just 0 to 2 for each criterion may be enough to select 80. But it there are 500, a more ‘finely graduated’ scoring from 0 to 5 makes sense.
The point is that more time and judgement is needed when the graduations of the scoring are more specific. It is best to do this stage briskly, and get on with finding linkages and testing personal cultivation

The second factor is the need to establish a regular review of prospects in a portfolio. Sometimes no personal, quality cultivation step is possible – due to a donor’s preference for privacy, busyness, low interest or absence of personal linkage. If this is unchanged after six months and several different attempts, it might be time to cease personal cultivation and try new possible prospects.
Note for context here that LAI rating is most relevant to major gifts programs that are ‘staff driven’, that is, where all three criteria are necessary to ‘get off square one’.
In case of capital and capacity campaigns that are more ‘volunteer advocate’ driven, interest becomes less important as an initial filter, and personal linkage of those advocates and ability to make a big gift are the starting point. Usually, big gifts will only result where genuine interest is subsequently built by cultivation. But at the start, linkage and ability can be enough.

Finding linkages
Often the single longest delay factor in approaching top prospects (even a charity’s own donors) is getting face to face. Often, the donors with the biggest ability to give are the busiest and hardest to reach. Chapter 8 gives good guidance. Note: LinkedIn continues to grow in value for this purpose, although don’t rely on your own LinkedIn account to find connections to a prospect. LinkedIn currently only shows mutual connections to a prospect who is ‘second level connected’ to you.
Well-prepared phone technique can help get that first meeting. A solo major gifts officer in an organisation with no prior major gifts positions recently arranged a meeting with a BRW 200 individual who had only ever signed an online petition for the organisation.
This happened by applying prospect research that identified a location of the charity’s activities of close interest to the donor, and a few well selected questions about how the donor’s business activities might overlap with the charity’s.
But most of the time, it’s personal linkage that can get you face to face when the usual offerings (invitations to tours, board cocktails etc) don’t work by themselves. The tours and thank-you events still work (to motivate, appreciate, affiliate) but it’s a personal invitation by a person of influence that will increase the acceptance rate.
An interesting side note here is that several experienced UK and Canadian fundraisers have commented on how different Australia is – donors simply not giving an RSVP or accepting then not coming with no notification, is very frequent by comparison.
Which linkages found by prospect research are most effective?

Longer personal connections beyond business and professional relationships are clearly effective, although less likely to be found via research of published information. Conversely, don’t assume that people who are both on the same board necessarily know each other well, particularly for professional non-executive directors.
Consider the social and business obligations involved. For example, professional advisors and suppliers to a business may need to carefully ration the requests they make of people who are their clients and customers. But clients and customers will find it easier to invite their advisors and suppliers.
Pay attention to residential location. Often, people who can be influential for your organisation will have a network around their home that is unrelated to their business or profession. This applies when doing ‘peer screening’ with your board members and ‘inner circle’. You can ensure that the prospect names they screen include those nearby. Of course, research won’t always find private addresses.

For professionals interested in more, the Association of Professional Researchers for Advancement (APRA) has a newly formed Australian chapter (the first outside North America). Email enquiries to [email protected]. There’s also the APRA Australia LinkedIn group, which has plenty of interesting and specific discussion.
Charlotte Grimshaw, Molly Masiello and Conor McCarthy’s Understanding Major Donors: A Guide to Prospect Research for Australian Fundraisers is priced at $30 and available from fundraisingresearch.com.au.
Roewen WishartRoewen Wishart CFRE is Director of Xponential and has 25 years’ experience in fundraising. His specialties are fundraising strategy, major gifts and capital/endowment campaigns, gifts in wills, ethics and boards in fundraising.

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Capgemini World Wealth report 2017

2/10/2017

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Capgemini have published their annual World Wealth report for 2017, reporting on numbers in high net worth individuals around the world, their asset allocations and estimated worth. Australian numbers continue to grow, although not as spectacularly as in some recent years. You can review the stats and download a copy of the report from their website here

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How much do people give?

2021 ATO charitable giving tax stats for individuals - giving of $25K+ now accounts for 54% of deductions claimed!

Philanthropy News June 2023

Everything you always wanted to know about PAFs...

How are philanthropists responding to the Covid crisis?

Another landmark year for Australian philanthropy

We're now able to offer data screening in New Zealand

2017 – a phenomenal year for major gifts

January 08th, 2018

Capgemini World Wealth report 2017

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