By Shane Wright
The cost-of-living crisis driving Australians to the nation’s charities has also forced up to 80 per cent of people to cut the amount they donate to welfare organisations.
In an indication of how difficult many households’ finances have become under the weight of high inflation and interest rates, research compiled by The University of Queensland for the Giving What We Can organisation found people had reduced donations despite recognising the pressures facing the less well-off.
Cost-of-living pressures have led many Australians to cut the amount they give to charities.
The most recent Suicide Prevention Australia community tracker shows half of the population is experiencing cost-of-living and personal debt distress beyond normal levels. This week, Reserve Bank governor Michele Bullock noted the cost of essentials, groceries, petrol, health, education and rents was going up, putting financial pressure on many Australians.
Individuals donate about $6 billion a year, with another $7.1 billion coming from businesses, community organisations and governments.
As part of a broad survey of people about their attitudes towards charitable giving, The University of Queensland found 78 per cent of respondents had reduced their donations because of the cost-of-living crisis.
Sixty-one per cent said they still believed it was important for them to have a social impact through donations despite the pressures on their own finances.
The researchers said this suggested many Australians were willing to sacrifice some of their discretionary spending to support causes they cared about, even if they were struggling to make ends meet.
Giving What We Can executive director Luke Freeman said it was clear people were trimming their donations because they were under financial pressure.
“It shows the harsh reality of charitable giving – that even though charities are being used a great deal because of financial pressures across the country, they are finding it tougher to get support,” he said.
“The cost-of-living crisis is affecting people. They want to give, but it’s hard for them.”
The survey found many people overestimated the generosity of Australians. Almost 80 per cent of respondents thought they were as generous as, if not more than, people in New Zealand, the United States, Canada and Britain.
But Australians are the least generous of the five nations, donating 0.38 per cent of GDP compared to 0.54 per cent among Britons, 0.77 per cent among Canadians, 0.67 per cent among New Zealanders and 1.44 per cent among Americans.
Most survey respondents also believed 73.5 per cent of people globally earned less than the average full-time Australian income. The actual figure is 98 per cent.
The survey also found many people were prepared to give to charities that could, transparently, show the effectiveness of their donations. Seventy per cent of respondents said they were not confident their donations had a lot of impact.
Freeman said as cost-of-living pressures eased, donors would look towards charities that could prove their work was helping.
“Australians are increasingly aware of the importance of effective charitable giving and this survey highlights a significant shift in donor priorities towards transparency and measurable outcomes,” he said.
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