Most people I speak to want to make a difference in the world; they want to help – but there’s a niggling question that pops up regularly – “how do I know that the money I give will go to help the people I give it to?”
I’ve had a number of such conversations over the past couple of weeks since the Shane Warne Foundation came under investigation when it was revealed it had donated an average of only 16 cents of every dollar of $1.8 million raised from 2011-2013, to institutions that care for sick and underprivileged children.
And then last week we were stunned by disclosures that only 6 cents of each dollar donated to the EJ Whitten Legends Game has gone to cancer research.
A CHOICE survey found 81% of respondents didn’t know how much of their donation reached a charity’s beneficiaries after fundraising costs and overheads were subtracted. But over 90% of respondents said they wanted to know.
It was timely then that the ACNC (The Australian Charities and Not-for-profits Commission) last week launched a landmark report which comprehensively analyses the charity sector’s finances for the first time.
The Key report findings were:
- Charities have a combined total income of over $103 billion (almost $7 billion of this comes from donations and bequests), which makes Australia one of the most generous countries in the world.
- The largest 5% of charities receive 80% of the sector’s income (this includes World Vision, Compassion, Salvation Army, Cancer Council, Australian Red Cross, National Heart Foundation and St. Vincent de Paul)
- Last year, Australia’s 54,000 charities spent $95 billion.
- Charities are financially healthy.
- Most charities operate a balanced budget. They have a surplus or deficit of no more than 20% of their total income and were more likely to have a surplus.
- Around 40% of charities have Deductible Gift Recipient (DGR) status.
- Charities employ over one million staff and engage approximately two million volunteers.
All in all the report shows that Australia’s charities are healthy and make a major contribution to our society as well as helping overseas. But the report falls short in that it doesn’t answer the key question that is on everyone’s mind, “how do I know that the money I give will go to help the people I give it to?”
While some will use this as an excuse not to give at all, those who genuinely want to help will simply do their homework first. May I suggest the following?
- Decide what cause or need you have a passion for.
- Research the charities that work to meet that need (there’s plenty of information online and the Remember Me website is particularly helpful
- Contact the two or three charities you find are doing the best job in that area
- Ask the tough questions including the percentage they take out of each dollar for administration and promotion (if it’s more than 20-30% keep looking)
- Once you’ve selected your charity of choice commit a regular amount of money to them but keep your eyes open. Charities need to continue to be transparent and accountable.
- Consider giving some time as well as money. Most charities are crying out for volunteers.
It’s my personal belief that 54,000 charities are way too many. Multiple charities doing the same type of work means that there are massive double-ups of resources that could be far better used if they amalgamated. While I understand that some celebrities want a Foundation named after them, how good would it be if they adopted an already functioning charity and used their profile to promote it? Chris Judd is a great example of this by getting behind YGAP with Elliot Costello and also the Mirabel Foundation (Mirabel assists children who have been orphaned or abandoned due to parental illicit drug use and are now in the care of extended family).
I also understand that when someone has lost a loved through chronic illness, accident or crime, they desire to establish a foundation in memory of that person. The Daniel Morcombe Foundation is an excellent example. Again, the question needs to be asked, “Is there a functioning charity that is already addressing that issue?” If so, would it be a better use of resources, time, money and energy to get behind something that’s already established and working? I believe it would be extremely helpful over the next few years for existing charities to look at merging in order to make the Australian charity sector more streamline, more effective and less confusing to those who want to help.