Navigating End of financial year philanthropy dilemmas: a ‘how to’ guide
There are 54,367 charities currently registered with the Australian Charities and Not-for-profits Commission (fear not if you don’t like any of the current ones though as there are 6-7 new charities registering each day). Each and every organisation is dependent upon donors like us to survive. So how on earth do we choose which ones to give to?
Having spent two decades as a fundraiser and donor in Australia, my perspective comes from both sides of the giving coin. One of my key considerations is whether the charity has a healthy investment in fundraising. While some people look for a low cost of fundraising and think “oh, my how efficient!” I think they lack business acumen and know that an organisation won’t address the needs of its beneficiaries unless it continues to seek and test new ways to expand income.
And a charity that doesn’t communicate with me, will not keep me as a donor. The notion that “leaving me alone” or “not bothering me” might be the motivation behind the silence is irrelevant. If I give money, I expect a charity to say thank you, and I expect to hear about their work. If I wasn’t interested in this, I wouldn’t have given money in the first place. Charities should tell donors what they are doing with their gift – it’s called accountability. But I don’t need to hear only how my money has funded a well, a book or a fixed someone’s eyes. I am happy to pay for the office lights to run, training, advertising or a website because these are the kinds of things that are essential to run an effective organisation (truth be told, my first preference would be to invest in fundraising to see my dollar multiply!).
I also want to be asked to do more to help. I want to help the charities I support to achieve their mission and am happy to give, volunteer, and occasionally write a letter to a politician or badly behaving corporate to this end. I see it as a charity’s job to help me be part of their solution. If charities do not engage me (a donor) in helping them meet their mission, I believe they are not doing their mission justice. And it’s not just me that feels that way. Asking people to give is effective – it’s the most common reason Australian donors give for making a donation to charity.
But the best suggestion I have ever seen for choosing a charity comes from Dan Pallotta:
“Don’t ask about the size of their overhead, ask about the size of their dreams.”
I’d only add to this that it’s also worthwhile looking at whether they are any good at making progress towards their dreams. How do they evaluate their work? What impacts are they achieving? Sure annual reports are often a fairly boring read, but it really is worth having a read (United Way has done a summary for those of us with short attention spans).
If you’d rather have a conversation, try ringing a charity to have a chat. You’ll quickly discover how interested a charity is in its donors by the response you receive. Ask questions that help you determine how aligned a charity is to your values:
- Are they political? Religious?
- Do they have a strategic plan?
- What are their goals?
- How do they make sure they are meeting the needs of those they help? (I’d be looking for someone who consults those affected by their programs before developing them… except in the case of plants and maybe animals)
- Is the charity registered with the ACNC?
- Donate to less charities. Giving to 10 charities has 10 lots of administrative costs. Give the same amount to three and you already have an increase in efficiency.
- Be loyal, stay for life. Yes life. Or five years if you have commitment issues. Finding new donors is the most expensive element of any fundraising program. Become a regular (monthly) giver.
- Tell them if you don’t want to be mailed/called etc. Charities do not want to annoy you or contact you if you are not going to respond. But do be realistic. Will you remember to give to them next June if they don’t remind you?
- Claim your tax deduction! Up to two billion dollars in donations are not claimed as tax deductions in Australia each year.
- Don’t buy things that have high costs associated with them – raffle tickets, pens, badges, etc (unless you happen to buy pens anyway, then go crazy).
- Tell charities if you move house – don’t make them pay to track you down.
And how much should we give? For Australian women the average tax deductible claim is 1% (men give 0.97%). Many people aim for higher and most religions suggest significantly more than this. The average income in Australia is around $58,000 and $580 might seem like a lot to give at once, but $48 a month can feel easier, or even $11 a week. Setting up regular donations of smaller amounts can make things more efficient for both you and the charity.
This financial year I will donate 1% of my gross income to a list of charities including ones I have given to for years, some I give to just to see how they treat their donors, and one I let my daughter choose to encourage her philanthropic spirit (that she chose the RSPCA while lobbying for a pet makes me a little suspicious though). What are the reasons behind your giving? Are you maximising the impact you’re seeking to achieve?
This end of financial year, many of us have tax breaks on our mind. But what about also making our generosity more effective? Making some effort up front means we are more likely to choose a charity we will be happy with in the long term – and the charity will be happier with us too because our donations will go further in achieving the mission we signed up to achieve in the first place. Now that’s a return on investment!
About the author: Kim Berry is United Way Australia’s Head of Resource Development. She has been a fundraiser for over 20 years, having worked as an employee or consultant in overseas aid, domestic welfare, education and health sectors. She loves giving people the opportunity to help make the world a better place and knows the satisfaction that comes from donating (it actually makes you healthier and happier)!