Who Finances Australia's Charities?

This inaugural survey of the income composition of Australia's major charities shows the makeup of the charity dollar contributed by government, individuals, bequests and business. It provides valuable quantitative input into the current debate on whether support from each of these contributors is adequate. It can also present a starting point for the development of performance benchmarks.

About the Survey

A total of 158 major charitable organisations were surveyed. This sample includes all of Australia's 30 largest fundraising organisations and represents about 21% of the total fundraising income of Australian charities. All the major categories of charities were also represented in the sample.

Major sources of income were obtained from each organisation's 1997 financial statements. This gave a breakdown of Total Income into three main sections: Government Contributions (State and Federal), Fundraising and Other Income. Fundraising Income (FRI) was further broken down into four sub-sections : Donations from Individuals, Bequests, Corporate Sponsorship and Corporate Giving. These sub-sections as a proportion of FRI were obtained by using results of other surveys of 1997 data conducted by Givewell, IOOF/ASSIRT and O'Keefe and Partners. Finally, each organisation was assigned a Givewell Category (such as Medical Research, Overseas Aid etc.) based on the nature of the work carried out by the charity. This was done to identify which categories are dependent on a particular source of income. Finally, results were correlated to examine any interdependencies on income sources.

Results

Number of Charities in Survey: 158

Fundraising Income:	$ 580,226,427
Government Contributions:	$ 946,098,239
Other Income:	$ 681,815,705

Gross Income:	$ 2,208,140,371

Breakdown of Gross Income:

1) Government Contributions	43%
2) Other Income	31%
3) Fundraising	26%

Breakdown of Other Income:

This consists largely of investment income, fees for service and grants from private sources (in no fixed order).

1) Individuals	46%
2) Bequests	27%
3) Corporate Sponsorship	16%
4) Corporate Giving	11%

Ratio of Government Contributions to FRI = 1.65:1 ie for every dollar a charity raises by means of fundraising, it receives $1.65 from the Government.

Analysis of Government Contributions:
Government contribution to charities of different categories varies significantly. This is illustrated in the following table.

Category	Govt as % of Gross	FRI as % of Gross	Ratio of Govt::FRI
Major Diseases	34%	42%	0.81:1.00
Medical Research	32%	31%	1.03:1.00
Medical Support	78%	7%	11.14:1.00
Conservation & Environment	11%	66%	0.17:1.00
Humanitarian	24%	40%	0.60:1.00
Children	36%	24%	1.50:1.00
Aged Care	55%	7%	7.86:1.00
People with Disabilities	43%	26%	1.65:1.00
Welfare	33%	24%	1.38:1.00
Overseas Aid	17%	64%	0.27:1.00

* Investment Income, fees for service, Private Clients

Gross income of the 158 charities surveyed exceeded $2.2billion. The largest source of income for charities was the Government (43%). FRI constituted 26%. Other income consisting largely of investment income, fees for service and grants from private sources (in no fixed order) came to 26%.

Analysis

For every dollar the charity sector raises by means of fundraising, it receives $1.65 from government. However government support is not consistent over the different charity categories. In fact it varies significantly. While government contributes 78% of total income of the Medical Support category and 55% for Aged Care, it contributes only 11% for Conservation and Environment and 17% for Overseas Aid. Some categories also depend a lot more on FRI. For example Medical Support and Aged Care have FRI of only 7% whereas Conservation and Environment raises 66% and Overseas Aid 64%.

Analysis of the correlation of sources of income suggested that: -

Organisations with greater amounts of gross revenue tend to attract greater amounts of government income. This is not the case for the Conservation and Environment category.
However, larger organisations do not receive a proportionately higher level of government support.
Overseas aid organisations with high levels of fundraising income tend to receive greater amounts from government.
For all categories, except medical support, organisations with increased fundraising income tend to obtain a lower proportion of their gross revenue from the government i.e. the greater the amount of fundraising income, the lower the support received from the government as proportion of the organisations gross revenue.

For further information about the survey contact Aneesh Sadarangani, Research Analyst at Givewell on (02)6682 5460

References
1. 28% Growth in Bequests to Major Australian Charities, November 1998, Givewell.
2. 10th Annual Giving Trends in Australia Report, 1998, O'Keefe & Partners.
3. Australians and their Money, December 1997, IOOF/ASSIRT