Environmental giving trends

Environmental giving trends

We are routinely asked how much philanthropic support goes towards the environment.  

We would love to have a confident answer.

The reality is that in Australia, no single, publicly available source of information about philanthropic giving exists. 

To bridge this data gap we have collated information from a variety of sources in Environmental Giving Trends 2020 (pdf). This includes research into the wider charitable sector and data from the Australian Charities and Not-for-profits Commission, plus the findings drawn from a research partnership between the AEGN and the Australian Government Department of the Environment and Energy.

The process of using these inputs to build a picture of environmental giving was like watching a photograph slowly develop in a darkroom. The image that emerged was alarming: The environment receives only 2.5 per cent of all charitable donations and bequests and 0.5 percent of all revenue received by charities.

As our nation reels from the impacts of the most devastating bushfire seasons on record, the public conversation around supporting the environment and combatting the climate crisis is louder than ever. Ordinary Australians have responded to the fires with swift generosity (the extent of which will form the basis of our future reporting).

The outpouring of support for our environment and wildlife charities is extremely heartening but we know that funds raised during an emergency will only go so far.

Given that the impacts of climate change will be felt across all sectors and cause areas, growth in sustained philanthropic support of environmental organisations is urgently needed and it’s needed now.

According to Giving Australia 2016, environment is an important funding priority for 23.9 per cent of philanthropic grantmakers who structure their philanthropy (Baker etal 2017). But unfortunately, while it’s hard to get good data, while the environment is a priority, this does not seem to have translated to actual significant giving. The data on PAF distributions between 2000-2014 (the years for which data exists) shows 5.8 per cent of distributions went to environment causes (ATO 2018).

The good news is that more recent research (McLeod 2018) shows that among Australia’s top 50 donors in 2017, environment was the fourth most supported cause behind only education, culture and arts, and health and medical research. As yet, we do not have the data to tell us what this actual dollar figure is.

What we know

Who’s giving? Individuals (rather than trusts and foundations) provide most environmental donations and the market for individual giving is dominated by a small number of groups with well-known brands and capacity to engage the wider community.

Individuals provide most environmental donations…

That may change over time. The 2016 Giving Australia report found that 23.5 per cent of respondents who practice structured philanthropy deemed the environment an important funding priority. It’s a sentiment that holds true for high-net-worth givers too, according to the 2018 Support Report which found that among Australia’s top 50 donors in 2017 the environment was the fourth most supported cause behind education, culture and arts, and health and medical research.

The existing ATO data on Public Ancillary Fund distributions between 2000 (when PAFs were first introduced) and 2014 shows 5.8 per cent of distributions went to environmental causes, suggesting PAFs were, and will continue to be, an important funding source for environmental groups.

Assessing the size of corporate giving to the environment is another challenging proposition. A recent examination of corporate giving in 2018-19 found that 10 of the top 50 corporate givers supported environmental causes but it is impossible to know how much this equates to in dollars, particularly when only 10 per cent of support was monetary; the remainder was in-kind or volunteering.

Where are the donations going? The work of Australia’s 921 environmental charities was fuelled by $740 million in funding in 2017. That funding came from donations (31 per cent of all revenue), government grants (33 per cent of all revenue) and other sources.

These environmental charities are mostly very small in size, with many operated entirely by volunteers. Even the largest environmental organisations are modest in comparison with other sectors; Australia’s largest social services organisations have 15 times more revenue and employ 30 times as many staff as their environmental counterparts.

Among environmental charities, funding is unevenly distributed with the largest 25 groups receiving more funding than the remaining 896.

Although 128 environmental charities reported receiving more than $1 million in annual revenue in 2017, the five largest environmental charities received on average $29.7 million in revenue and employed 146 full time equivalent staff. By contrast, the five largest social services charities in Australia averaged $470.9 million in revenue, with 3244 staff.

Looking across the last decade, the value of donations to charities on the Register of Environmental Organisations (REO) is growing (there was an encouraging spike in 2018) but the number of donations is trending downwards.

In effect, fewer donations are being made, but those that are given are of a larger monetary value.

Most of these significant gifts are made to large, long-established environmental organisations, which further concentrates giving. In 2018, 24 organisations on the REO accounted for 76 per cent of all donations.

Sizeable individual donations, including bequests, underpin the current environmental giving landscape in Australia.

Key takeaways: Size matters. Bigger donations and grants are critical for environmental organisations, large and small. Substantial growth in donations is needed across the whole environmental sector, rather than an increasing concentration to a handful of not-for-profits.

Though a critique about admin and overheads is often levelled at larger environmental charities, the reality is that they are operating on much leaner budgets than their counterparts in other areas such as social services, and they are largely funded by the community.

We need to help more Australian philanthropic funders see the importance (or indeed, the urgency) of supporting environmental causes. This report, and the ongoing work of the AEGN, aims to grow an informed understanding of environmental giving so that we, and our members, can deepen our collective impact for Australia’s environment.

About the report:  Environmental Giving Trends 2020 (pdf) is designed to help grantmakers, policy makers and the environmental community understand the profile of the not-for-profit environmental sector, the scale of charitable giving and philanthropic support for environmental charities, and how Australian environmental giving fares in the international context.