The Tsunami Factor: Australian Charities Financial Analysis 2005

20 July 2006

This year’s analysis of the financial data of a representative sample of more than 500 charities listed by Givewell shows evidence of the ‘tsunami factor’, with significant increases in fundraising revenue for in response to the tsunami appeals. As a result, this report provides additional analyses of the financial information both with and without those charities most influenced by the tsunami factor.

A summary of 8-year trends from 1998 to 2005 is found at the end of this report.

Identified trends for the 2005 financial year include:

• sustained income growth – up 11%
• continued, though slower, increase in government funding – up 7%
• increased growth in investments – up 10%
• increase in fundraising revenue (excluding bequests) – up 44%
• increase in fundraising revenue (excluding bequests) for main recipients of tsunami donations – up 88%
• increase in fundraising revenue (excluding bequests) for others – up 9%

As would be expected, the main winners in 2004-2005 were those most influenced by the tsunami factor. Not only did their revenues increase substantially but the funds being held for future projects contributed to significant increases in their investments and income derived from them. This group of charities also gained from the media attention given to the tsunami disaster, which provided them with what amounted to free advertising and thus considerably lowered their fundraising costs.

The benefits flowing from the tsunami factor – in the form of investment income and raised profiles – will still be felt in the current financial year. However, if donors become critical of how their money is being spent and accounted for, then they might be less ready to put their hands in their pockets to respond to other appeals.

For those charities that did not have tsunami appeals, the positive trends of the past years continued unabated. The sector as a whole experienced a healthy growth in fundraising revenue.

The drop in government funding for some sections and the overall slowing down of this source of revenue across the charitable sector as a whole is a trend that charities will need to be aware of. Many may feel the need to decrease their reliance on this revenue stream.

The full report is available via email exclusively to paid subscribers to the Givewell Research Centre. Contact research@givewell.com.au to request your copy.

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