No longer passing around the hat: New research shows Australians aren’t as charitable as they used to be

Australians are becoming less charitable as the share of people making donations falls to its lowest level since the 1970s, with only the generosity of some of the nation’s richest people easing the struggle facing the charity sector.

In a development experts argue is due to a range of factors ranging from the demise of Baby Boomers to poor wages growth, new data from the Australian Tax Office reveals less than 29 per cent of the nation’s 14.7 million taxpayers made a tax deduction for gifts or charities in 2018-19.

The chief executive officer of the Community Council for Australia, David Crosbie, said there had been a clear fall in the proportion of people giving to charity since the end of the global financial crisis.

He said there was a close connection between charitable giving and consumer confidence – the more optimistic people were about the economy and their future, the more likely they were to give.

Australians were prepared to “pass around the hat” in the immediate wake of a disaster, he said, noting a big lift in donations during the 2019-20 bushfire period. But that had led to a drop in assistance to other charities.

Tax office data shows 4.2 million of the nation’s 14.7 million taxpayers made a deduction in 2018-19, the smallest number in more than a decade and the lowest proportion since 1978-79.

Over that time, the number and type of charities people can donate to has grown sharply as governments of all persuasions have sought to make it easier for the public to financially support good causes.

Despite the fall in the number of people making donations, the average size of the donation increased in 2018-19 to a record $933 per person from $846.

That increase was driven in large part by extraordinarily generous donations by some of the nation’s wealthiest residents. The largest donation was $400 million by mining magnate Andrew Forrest and his wife Nicola who announced in mid-2017 plans to sink some of their wealth into areas ranging from cancer research to modern slavery.

Their donations alone helped almost double the average donation made by West Australians in 2018-19 to $2209.

But the number of West Australians making a donation claim has suffered one of the biggest falls of any state or territory, dropping by 12 per cent since 2013-14 to 412,000. And the median donation has remained unchanged over the past 5 years at $120.

The 2013-14 financial year marked the end of the state’s post-global financial crisis mining boom, when unemployment started to rise, wage growth flat lined and Perth house prices fell by 13 per cent up to 2018-19.

The biggest drop in recent years has been in South Australia, with the number of people claiming a donation deduction down by 21 per cent since 2010-11. Double-digit drops have also been recorded in the Northern Territory, Queensland and South Australia.

The smallest drop has been in Victoria where numbers peaked at 1.3 million people in 2016-17. Over the next years, the proportion dropped by almost 7 per cent.

“Australians are really good in terms of a natural disaster or a crisis, passing the hat around to help people out,” Mr Crosbie said. “But giving in general has been on the decline for some time, ever since the end of the GFC.”

The drop in donors has coincided with a sharp drop in the rate of wages growth which started from around 2012-13.

Myles McGregor-Lowndes, a former director of the Australian Centre of Philanthropy and Nonprofit Studies, said wages growth may be making it more difficult for people to donate.

Another factor was the drop-off in the number of Baby Boomers who were historically more likely to volunteer and be involved in charities than younger generations, he said.

”As the Baby Boomers die, you’ve got less givers and volunteers and that might be one of the issues going on,” Mr McGregor-Lowndes said.

The tax office data showed one of the most generous age groups were those aged 75 or more. More than 144,000 people over the age of 75 made taxable donations of $608 million in the year.

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