The Australian Centre for Philanthropy and Nonprofit Studies, qut
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- What do we know about fundraising efforts in Australia
- Government regulation of fundraising
- Self-regulation of fundraising
International contextBecause the definition of ‘fundraising’ varies across both domestic and international jurisdictions, multicountry comparisons are difficult; however, using the more restricted meaning by which fundraising is synonymous with ‘philanthropic giving’, some efforts have been made to compare international fundraising efforts. In the US charitable giving statistics on estimated charitable deductions on tax returns filed for 2011 have been published annually since 1955 by in Giving USA. Total charitable contributions by individuals, corporations and foundations was an estimated US$298.42 billion in 2011, up 4% in 2011 dollars and 0.9% in inflation-adjusted dollars from a revised total of US$286.91 billion in 2010. In the UK the Charities Aid Foundation (2015b) found that the estimated total amount donated to charity by UK adults in 2014 was £10.6 billion. However, these figures represent only donations and do not include a range of other sources of financial support that might qualify as ‘fundraising’ revenue. What do we know about fundraising efforts in Australia?There are relatively few sources of data about fundraising in Australia. One of the earlier research attempts by the Industry Commission found that, in 1993, the 30 largest community welfare organisations in Australia received an average 18.5% of their revenue from fundraising (Industry Commission 1995). Lyons (1995) found from a survey of 148 organisations that employed almost 700 specialist fundraising staff, who were members of FIA, that fundraising contributed 23% of the revenue of private NPOs and that the most important methods used were direct mail, special events and bequests. The Giving Australia 2005 report (ACOSS 2005) concluded: ‘The giving of money, goods and services to nonprofit organisations by individuals and business is estimated by this research to total A$11 billion in a year (this figure excludes giving in response to the Asian Tsunami appeals in late 2004-early 2005). This giving is comprised of: A$7.7 billion from individuals. Of this, A$5.7 billion was donated by 13.4 million people, 87% of adult Australians, in the year to January 2005. The average donation was A$424 per year while the median donation was A$100 (i.e. half of all donations were above this amount and half were below). A further A$2 billion was provided by 10.5 million individuals through ‘charity gambling’ or support for events. A$3.3 billion from 525,900 businesses, 67% of all businesses in the 2003-04 financial year. Business giving consisted of 68% in money (A$2.21 billion), 16% in goods (A$0.52 billion) and 16% in services (A$0.52 billion). Donations accounted for 58% of business giving (A$1.9 billion—given by 58% of all businesses); sponsorship for 25% (A$0.81 billion—given by 20%); and community business projects for 17% (A$0.54 billion—given by 19% of businesses).’ By 2012–13 the Australian Bureau of Statistics (2014a) found that NPOs received income of A$107.5 billion of which A$8,614 million was contributed by a range of donations, sponsorships and other fundraising methods (see Table 13.1). Table 13.1 Income received by Australian NPOs 2012-13 (Australian Bureau of Statistics 2014a)
It should be noted that there are considerable variations in the way these data are collected and classified, helping to explain the significant differences in the findings. However, it seems likely that a most of the A$8.6 billion listed above and some part of the A$6 billion generated by NPOs from the sales of goods and the A$72.4 billion generated by the provision of services in 2012–13 may be included into a calculus of fundraising in the broad sense. While fundraising research has begun to provide a sound basis for understanding the motives and behaviours of donors and other contributors to NPOs there is little rigorous research available about the efficacy of individual fundraising practices. Fundraising practitioners have tended to rely on the results achieved in individual campaigns. In recent years professional fundraisers have been able to use sophisticated ‘donor databases’ to gain greater insight into the roles that various combinations of solicitation means and response channels play in the effectiveness of their campaigns (Association of Fundraising Professionals and The Urban Institute 2015; Sargeant 2001). The growing importance of the use of the internet, mobile phones and social media (Crosbie and Gavel 2012) to support fundraising has potentially far-reaching effects on the design and implementation of fundraising activities. Issues such as the use of ‘big data’ (Ihm 2015; Hart, Greenfield and Johnston 2005; Hoefer 2012; Ribeiro 2014), data security and privacy are all now part of fundraising management. Government regulation of fundraisingIn Australia, the UK and the US, NPOs need to be registered by a government regulator in order to solicit public contributions in the jurisdiction where their office is located. Such registration mandates various forms of reporting to the regulator. Soliciting donations or other types of support across jurisdictional boundaries is likely to subject the organisations to charitable solicitation registration and reporting requirements in those jurisdictions (Breen 2012). One of the historical purposes of most fundraising regulation in Australia was the regulation of fundraising practices that could cause nuisance to the public. In a detailed analysis of fundraising regulation in Australia, McGregor-Lowndes, Flack, Poole, et al. (2014, 119) found that: ‘Although state and territory regulatory regimes use different terminologies to describe the fundraising behaviours, the regulations tend to refer to the collection or appeal for certain types of fundraising transactions or products such as donations, sales, or grants. Similarly, the regulation tends to regulate or exempt certain audiences or market segments such as public appeals, members or persons with shared workplace, etc. In describing what kind of fundraising practices are regulated or exempt, some regulators refer to various marketing channels or marketing means such as mail, telephone, radio or television advertising. Finally, the regulation refers to whom may engage in fundraising, so that some regulation refers to members, commercial agents, traders and employees. In practice, modern fundraising techniques use combinations of fundraisers (whom) to solicit support in various forms (products) from carefully selected market segments (markets) using one or a combination of marketing channels (means).’ (Sargeant and Shang 2010) While the regulation of fundraising is primarily the responsibility of the state and territory governments in Australia, the Australian Charities and Not-for-profit Commission (ACNC) at the federal government level does have a role to play in that one of its important functions is to ‘maintain, protect and enhance public trust and confidence in Australian not-for-profit sector’. Since the fundraising activities of not-for-profit organisationsNPOs are often the points of contact that members of the public have with charities, the quality of those experiences have the potential to influence levels of public confidence in the sector (Hager 2004). Intense competition among charities in the UK since the late 1980s has been blamed for a rise in the levels of public dissatisfaction with some fundraising methods. This has led to calls for greater regulation of some fundraising practices in some jurisdictions (Breen 2012; Etherington et al. 2015; Sargeant, Hudson and Wilson 2012). In Australia, the Australian Charities and Not-for-profits Commission (2013) report entitled Public Trust and Confidence in Australian Charities found: ‘Overall, results from the quantitative research indicated that trust in the Australian charities sector was quite strong, although it appeared that there had been a small decline in trust from 2013 to 2015, with mean scores of 6.6 and 6.4 respectively.’ The establishment of the ACNC was intended to be the catalyst for regulatory reform in the NPO sector and some progress has been achieved at the Commonwealth Government agency-level to reduce duplication and cut ‘red tape’; however, major reform of the state-based fundraising regulatory environment has not yet been achieved. Self-regulation of fundraisingThere are two types of self-regulation of fundraising. The first is the form of regulation imposed by professional ethics and codes of conduct; the second, industry self-regulation, is generally designed as a form of industry–government co-regulation (Breen 2012; Sargeant, Hudson and Wilson 2012). FIA requires its members to comply with its ‘FIA’s Principles and Standards of Fundraising Practice’ (Fundraising Institute Australia 2014) which include standards of practice for most of the major types of fundraising activities. A similar set of codes and standards are imposed on the members of the Institute of Fundraising in the UK (Institute of Fundraising 2012). In 2006 the Fundraising Regulation Standards Board (FRSB) was established with five years seed funding from the Cabinet Office and the Scottish Government. Hosted by the Institute of Fundraising (IoF), the FRSB adopts IoF codes as its own, although membership of the IoF does not make an entity an automatic member of the FRSB, thus requiring a fundraising charity to join the FRSB separately and pay the relevant membership subscription. Following ongoing concerns about the efficacy of the FRSB system in the UK an independent inquiry was established in 2014. The subsequent Etherington Review (Etherington et al. 2015, 8) report into the UK’s fundraising self-regulation scheme found that ‘the Review has received sufficient verbal and written evidence to show that the current approach to self-regulation is no longer fit for purpose. A number of systemic weaknesses were identified in both the design and implementation of the current system. Self-regulation has lost the confidence of both fundraising organisations and the public.’ Consultations continue in the UK in order to reform the present system. 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