Reimagining Charities as Sustainable Businesses
26 Sep 2018
LUKE MICHAEL
Charities will need to reposition themselves as sustainable social enterprises to be successful in the future, according to a new report.
The Koda Capital Snapshot of Australian Giving said the concept of a charitable organisation may need to be reimagined with people becoming less charitable and less trusting of charities.
“Not only do many of our largest and best-resourced charities operate businesses and effectively run as sustainable social enterprises… they do this without as much pressure to justify their expenditure on administration, fundraising, research and development,” the report said.
While charities collect roughly $143 billion in annual revenue, only 7 per cent comes from donations and bequests.
Concerningly, 90 per cent of charities share just 6 per cent of all donation income, with the other 94 going to the top 10 per cent of fundraising charities in Australia.
The report warned growth in the giving population was not evident and said new money was coming from a smaller number of wealthier donors who expected a return on investment.
Koda Capital’s head of philanthropy and social capital, David Knowles said charities needed to be more businesslike and generate more income outside of traditional donation methods.
“I think the donor appetite to give a traditional hand-out is diminishing, and successful charities will be the ones that operate more like a sustainable business than a traditional charity,” Knowles told Pro Bono News.
The report also found less employees were donating via workplace giving, and the average amount given was also falling – from $43 million to $35 million in 12 months.
Knowles said workplace giving had huge potential but a different approach from employers was needed.
“The key to unlocking the potential for workplace giving is understanding the reasons why people don’t participate even though it’s a very simple and effective way to give,” he said.
“The number one thing that stops people giving is a belief that the money they give is just used to make their employer look good.”
The report said if one in three employees used workplace giving, Australian charities could receive an extra $245 million a year.
“It remains hard to convert workplace giving participation into meaningful relationships and the volume of money just isn’t there yet,” the report said.
Read more at probonoaustralia.com.au
Latest news
Investors Urged to Vet Private Credit Managers After ASIC’s ‘more failures’ Warning
23 Apr 2025
Investors in private credit funds are being warned to closely scrutinise the valuation methodologies being used by managers operating in the booming sector, amid growing expectations of an uptick in troubled loans as the broader economy falters. Private credit funds managed $148.6 billion at the end of 2024, according to ASIC, up 161% over the...
Australia ‘well placed’ Despite Escalating Trade War Between US and China
17 Apr 2025
Koda Capital Chief Economist Brigette Leckie claims that despite the trade war between the US and China, Australia is “well placed”. “We could see … core goods deflation – lower, lower prices,” Ms Leckie told Sky News Business Editor Ross Greenwood. “We [Australia] are again well placed.” Watch more videos here: Sky News
Subscribe to Koda insights
*Please note that the majority of research Koda produces and distributes is client-access only. Subscribing to the insights distribution list will only give you access to publicly available Koda reports.