June, 2008
Australians giving more, but still falling behind the US and UK in the generosity stakes.
According to recent research*, the Australian population is giving at a far lower rate than comparable Western countries such as the US and UK. Interestingly though, while the rate of giving may not be equal with our international counterparts, the number of individuals donating is on the rise.
A major factor influencing the growth of donors in Australia is the fact that the number of wealthy people in Australia is at a record high and is rising at one of the fastest rates in the world. In 2006 Australia ranked in the top 10 countries for the growth in the number of High Net Worth Individuals (HNWIs) for the first time ever and remains in the top 10.
The following table represents a comparison of ‘giving’ in Australia, the US and the UK . The US leads the pack when it comes to generosity, and Australia falls far behind – contributing approximately one quarter of the proportion of GDP given in the US.
Total gifts/donations given as a proportion of Gross National/Domestic Product
Country |
% of GNP/GDP gifted |
Australia |
0.5% |
UK |
0.63% to 0.77% |
USA |
2.1% |
At the end of November 2007, for the 24,384 deductible gift recipient (DGR) registered charities, $1,556 million was claimed by Australian tax payers for deductible gifts – representing an increase of 5.7% on the previous year. Comparatively, the UK 2006/07 financial year saw a decrease in the percentage of the population who gave to charity as well as a decrease in the estimated annual amount of money given to charity.
The 2004-05 Australian tax statistics reveal that males are donating more than women. 2.24 million males claimed tax-deductible donations, equating to $876.72 million, compared to 2.07 million females claiming $595.22 million. However, when measuring donations as a percentage of income, women come out on top – donating 0.37% of their taxable income, compared to 0.33% for Australian males.
However, Australians are still falling far behind the US when it comes to the amount given - the average charitable giving per household in America, 2005, equaled 2.2% of after tax income. Additionally, according to research by GivingUSA Foundation** 65% of households with incomes lower than US$100,000 give to charity. This is higher than the percentage of people who vote or read a Sunday paper.
Interestingly, it seems not only are the average Australians not keeping up with their Western counterparts, Australians with a taxable income of more than $1 million contribute less than 2% of their income. On average, Canadian millionaires contribute 3.2% and US millionaires contribute more than 3.5% of their pre-tax income. This is a very large gap, particularly considering these figures are in millions.
While the immediate effects of charitable donations can be seen in the day-to-day work of charities, the carry-on effect of some giving may not be seen for many years. Knowing that those who support charities during their lifetime are more likely to leave a bequest in their Wills - it can be assumed that a growing donor-base can lead to an increase in the amount of charitable bequests included in Wills. The members of Include a Charity, Mission Australia, Heart Foundation, Red Cross and Cancer Council, have seen a general increase in the number of people contacting them to inform that they have included a charity in their Will.
Leaving money to a charity in your Will is an easy way to support the future work of Australian charities. For more information on how to update your Will and include a charity, please call 1800 400 300 or visit www.includeacharity.com.au.
*How the wealthy give: comparisons between Australia and comparable countries: USA, Britain and Canada. Asia-Pacific Centre for Philanthropy and Social Investment, Swinburne University of Technology. 2005.
**U.S. charitable giving reaches $295.02 billion in 2006. GivingUSA Foundation. 25 June 2007.
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