Giving to Charities
Most research suggests that retirees are very significant contributors to Australian charities, and indeed contribute more than any other age group - which makes sense from both the community and financial perspective. The chart below, sourced from NAB's Charitable Giving Index Report of February 2018, illustrates just how charitable giving generally increases with age.
The downside is that many retirees are the focus of incessant charity marketing, by telephone, door-to-door callers and by charity marketers in shopping centres. Many of these activities are carried out by professional marketing companies, and many individuals provide donations without being aware that a substantial proportion of the funds collected are paid to the marketing company, to individual collectors and indeed shopping centres that charge access fees to collectors. Presently, only in NSW and Victoria is it required that face-to-face collectors who door knock or collect in shopping centres display badges which indicate they are "paid" volunteers. If unclear, ask the collector directly about their status.
Many charities take the view that individuals will not donate without being first "asked to give", and that collecting any money, even if only 50% or less of the amount collected, means that they still receive money they would not otherwise have generated. We don't concur and believe that raising money in this fashion is undermining the public's confidence in charities in Australia and that it leads to situations where individuals are unfairly pressured to make contributions.
Our view in this situation is that retirees should:
- Not make any contributions to charity marketers unless they are willing to state that they are "volunteers" and are not remunerated in any fashion through your donation
- Never make a donation to a charity without first researching the history, objectives and financial performance of the charity,
- Never participate in offers by charities to assist you in drafting a will. Regardless of whether they explicitly or implicitly request a "bequest or legacy" you should not have any potential beneficiary involved in the drafting of a will; we believe there is an innate conflict of interest. The drafting and maintenance of a will requires unbiased professional advice and we strongly recommend the involvement of a solicitor whom you appoint and remunerate.
- Support calls for charities to be subject to the "Do Not Call Register". A recent Choice report indicated that calls from charities, or commercial marketing companies that represent them, were the single largest source of unsolicited telephone calls - with more than 25% of Australians interviewed saying that they had received unwanted calls from a charity each week.
In other words, by all means continue to donate to charities or expand your charitable activity, but seek to do it in a more targeted and effective fashion with less of your donation money going to commercial fundraisers. We also believe that there is an inadequate amount of information provided by charities to the public and to the Charities Commission - comparisons are always difficult but many charities provide no information at all regarding employee numbers or executive and Board/executive remuneration. There is just inadequate transparency in the not-for- profit sector and it will eventually erode public trust; so take your time and choose who you support carefully!
As a postscript we understand that Federal Cabinet, in March 2020, considered further legislation that would increase the financial transparency of charities; including a requirement that charities provide details regarding the remuneration of their senior management. This will be greeted by howls of protest from charitable organisations, concerned about yet more "red tape", but the fact is that substantial reputational damage is occurring as a result of a lack of transparency, and because some charities appear to be run more for the benefit of their staff and marketers than the individuals and groups they profess to support.