Finance Your Budget Charitable giving: How much is enough?

Charitable giving: How much is enough?

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Most of us agree that giving to a worthy cause is a good thing. But just how generous are we as a nation? Is philanthropy dominated by the super-wealthy? And, for the rest of us who want to do our bit, what are the most effective ways to do so?

Thursday morning is the most generous time of week for Australians, with November rated as the biggest time of year for donations.

Women are slightly more like to make donations than men., a online fundraising platform, which launched in Australia in November, also found that 57 per cent of people felt more positive and inspired after giving to charity or helping someone.

Despite this feel-good factor, Australia slipped from its number one ranking on the World Giving Index to the seventh spot behind countries such as Burma, Qatar, New Zealand and Sri Lanka in 2013, in a year when global philanthropy increased.

The US was the world’s most generous country in 2013, while cash-strapped Greece came in at the bottom of the Gallup survey of 135 countries.

The survey, conducted for the Charities Aid Foundation, is the world’s largest study of charitable giving behaviour with more than half-a-million interviews determining people’s generosity in donating to charity, volunteering or helping a stranger.

According to the survey, the proportion of Australians who made a charitable donation dropped from 76 per cent in 2012 to 67 per cent in 2013.

However, 2013 was still a big year for domestic philanthropy, with four of the largest known donations made by some of the country’s richest people. 

Billionaire couple Andrew and Nicola Forrest gifted $65 million to the University of Western Sydney last year, just ahead of the $60 million James Packer donated to create the Sydney Arts Fund.

Toowoomba property developer, Clive Berghofer gave $50.1 million to the Queensland Institute of Medical Research, and global commodities trader Graham Tuckwell and his wife Louise, donated $50 million to the Australian National University to establish an Australian version of the Rhodes Scholar scheme.

While acknowledging the significance of these donations, the director of Philanthropy Australia, Louise Walsh, said all Australians could give more.

“A lot of people are now getting enormous joy out of giving away big sums of money, and I want that highlighted to encourage more people to do it,” Ms Walsh said.

Ms Walsh said that workplace giving, which allows employees to make regular before-tax donations through their company’s payroll system, was one of the easiest ways to make regular charitable donations.

“This is what I do,” Ms Walsh said. “It’s the most tax efficient means of giving and in many cases employers are willing to match donations dollar-for-dollar.”

“It’s just a matter of allocating, say, $10 a fortnight from your pay to a charity of our choice; it’s simple and easy.”

According to the Australian Charities Fund, workplace giving reduces the overheads and administration costs charities face. If just 10 per cent of working Australians made a payroll charity reduction of $5 a week it would benefit the community to the tune of more than $260 million per year.

Australia’s number one philanthropist, the Westfield executive chairman Frank Lowy, says he and his family have donated $350 million over the past 10 years.

A recent Roy Morgan Research survey found that 80 per cent of Australians earning $100,000 made donations in 2012 (down from 85 per cent in 2008), compared to 69 per cent of people who earned between $30,000-to-$40,000 (dropping from 73 per cent).

Despite the fall in donations, there was a slight increase in the number of people making donations of $200 or more, with the figure rising from 19 per cent to 21 per cent.

Ms Walsh from Philanthropy Australia said Australians were among the best in the world at responding to appeals for money following disasters. “What I would like to see is an increase in the amount of everyday giving, and people become more engaged with just a few charities. I think this would be more meaningful for people and would see them more involved in charities; beyond giving donations.

In 2011 Australians donated a record $2.2 billion to charity according to a report by JBWere, a reflection of the nation’s rising wealth rather than increasing generosity the report found.

The most recent Australian Tax Office figures show that 38 per cent of taxpayers, or 4.79 million people donated an average $461 to charity.

But not all charity involved money, with many Australians offering their skills and times to help others. Roy Morgan research shows that the number of Australians who lend a hand to others has increased from 32 per cent to 40 per cent since 2008. In the same period 40 per cent of respondents said they felt a responsibility to help the world’s poorest people (an increase of three per cent).

Australian philosopher and bioethics professor at Princeton University, Peter Singer has established the organisation, The Life You Can Save ( to help fight extreme global poverty. Professor Singer wants to see every Australian pledge at least one per cent of their income to fighting poverty.

“If all the world’s affluent people gave one per cent of their income to help the extremely poor that would be more than twice the amount of official (government) aid that is now given to fight global poverty,” his website says.

Prof Singer urges people earning between $88,000 to $116,000 to donate five per cent of their income, rising to 10 per cent for earnings of between $116,000 to $238,000 and 15-to-33 per cent for the ‘super rich’ earning more than $238,000.

The grass roots Australian organisation Giving One Percent ( has several giving calculators on its website to help people determine a reasonable amount to donate to charity. But the organisation says giving money is just one part of the process.

“Every time you publicly state that you donate to a charity—how much, which one, why—you magnify the impact of the actual donation. If you think it’s right to save a life, donate to the charity whose work you most support. And if you really want to make a difference, talk about it to people all the time.”

Five important steps to plan your giving

1. Decide your motivation:

Do you want to help others in need, claim a tax deduction, set a positive example to teach others about the value of charity or do you simply feel you and your family have enough already?

2. Identify a cause:

Think about the issues you care most about – those things that have meaning for you. Do you want to support causes that directly benefit you or your family, or do you have other priorities?

3. Calculate how much you want to give:

Consider what you can afford to donate, while still being able to meet your family’s needs and without financially risking any savings. Figure out what amount makes you feel comfortable and decide whether you will donate to a single cause, or spread your charity dollars over several organisations.

4. Find the best way to give

Will you choose the benefits of tax-free workplace giving, commit to regular payments or bank account deductions or do you prefer to make donations as events occur? Consider whether you want to include charitable donations in your will and whether your prefer to make donations anonymously or publicly. Think about the other ways in which you can give – for example, by offering your time and skills.

5. Do your homework

Evaluate the organisation you choose to support to ensure it is effective and reputable, and meets the criteria for allowing you to claim a tax deduction.

Source: Inspired Philanthropy – Creating a Giving Plan by Tracy Gary and Nancy Adess (Jossey Bass publishers) 

Is your donation tax deductible?

A donation is only tax deductible if it is given to a charity that has been endorsed by the ATO as a deductible gift recipient organisation (DGR). To receive a deduction the donation must be $2 or more and claimed in your tax return for the income year for which the donation was made.

Check if a charity is a DGR by contacting the ATO : 13 28 61


Michelle Hamer is a Melbourne author and journalist.