Connected Giving | April 2019 edition

NFP impact, the Australian Federal Budget & revenue diversification

Welcome to Connected Giving, Australian Executor Trustees monthly update on current trends and news in philanthropy. This month’s industry news summary looks at how NFPs are struggling to measure their impact with the funding that they get in Australia. We also delve into the rise of charity concerns reported to the Australian Charities and Not-for-profits Commission, and crucially we look back over the Federal Budget and what the social sector would want from it. New and existing data has been combined and compared in a comprehensive way for the first time in a snapshot of Australian giving. Finally we end with a look into the pros and cons of revenue diversification for your organisation, Notre-Dame giving backlash, and a quick survey from us.

Jump to any one of the edition’s articles by clicking the links below:

NFPs struggling to measure their impact

A new report from the University of Western Australia’s Centre for Social Impact shows that charities need greater funding support to measure outcomes with many not for profits lacking the resources to do so effectively. In order to improve measurement of outcomes, the desire to do so by organisations must first be in place. The results suggested that funding contracts should include dedicated funding for impact measurement. Read the full article (3 mins).

New report: Charity concerns continue to rise

The number of concerns raised about Australian charities has risen again, according to a new report released by the national charity regulator, the Australian Charities and not-for-profits Commission (ACNC). The report found that more than 1800 concerns were raised about charities, up 6% from 2017. The growing number of concerns about charities however, is likely an increase in awareness of the ACNC as a national regulator. In 2018, the ACNC issued regulatory advice to 71 charities to help them back on the right path. Read the full article (4 mins).

What the social economy wants from the Federal Budget

Looking back on the Federal Budget, various social sector experts weigh in on what they would want from the budget. There have been numerous publications by large nonprofits about the budget, including ACOSS, World Vision, Save the Children, and Camp Quality. Here the budget wishlist is broken into in-depth sections by experts; general, welfare, disability, housing, foreign aid, environment, volunteering, impact investment, and cooperatives and mutuals. Read the full article (10 mins).

A snapshot of Australian giving

Gathered from multiple different sources of giving data in Australia, this snapshot shows information and observations beneficial to donors and fundraisers based on information never before combined. There is an overall positive picture drawn of philanthropy in Australia, but a less positive picture of giving more generally. Interestingly, the typical giver and volunteer in Australia is a female, and so the potential for more giving relies on women moving towards wealth and pay parity, as they also give a larger share of their incomes despite earning on average 15% less than men. The snapshot data shows also that tax-deductible giving is falling, workplace giving is struggling, the power of private ancillary funds is growing, and corporate giving is doing well. Read the full article (15 mins).

Is diversification of revenue good for not-for-profit financial health?

The basic principle of diversifying revenue sounds like a smart idea, depending on one source of income can be risky. It seems rational to then have more revenue streams. Each revenue source has its own set of risks, reliabilities, and costs. But this isn’t always the best option, as every revenue source requires some transaction costs: money, time and attention. This affects autonomy and adaptability. There are pros to diversification, such as flexibility, autonomy, and community embeddedness. But there are also cons to diversification, and these are risk and vulnerability, a crowd-out of private donations, and increased administrative costs. Basically, to determine whether diversification of revenue streams is right for you, you have to look at the specifics of your situation and make an informed decision. Read the full article (8 mins).

Notre-Dame donation backlash raises debate: What's worthy of philanthropy?

Nearly $1 billion was raised in two days to help pay for the restoration of Notre-Dame after it was gutted by fire. But the outpouring of charitable donations, some of which were more than $100 million, was met with backlash. People were wondering why the incineration of the National  Museum of Brazil, for example, did not receive the same support. The criticisms rekindled strong class resentments in Paris, a city already in turmoil from the Yellow Vest Movement and wider populist responses to the concentration of global wealth. Nick Tedesco, senior philanthropic adviser at J.P. Morgan Private Bank said “instead of praising the act of philanthropy itself, people are saying it’s not the highest and best use of that capital”. Phil Buchanan, chief executive of the Center for Effective Philanthropy’s response was ” I don’t believe most big philanthropists are motivated by a desire to maintain the status quo via their giving or to protect themselves from higher taxation”. To solve social problems, all three sectors of society – public, private and philanthropic – need to do the jobs they were meant to do at a high level. For those who wish to avoid backlash however, anonymity is an option with the right money-management. Read the full article (12 mins). 

Connected Giving survey

As we now enter the busy EoFY period advisers often are approached by clients who have the capacity to make significant donations, seeking assistance to be more effective in their philanthropic giving and it also presents an opportunity to connect with their passions, interests and values.

We’re keen to hear what’s important to you as you approach these opportunities.  A brief 2 minute survey is all we’re asking from you.  If the survey raises more questions for you then please contact our head of philanthropic services Ben Clark.

 To find out how we can best partner with you contact us here.
Feel free to share this industry news summary with your colleagues!