Too little to give

Fundraising Institute of New Zealand chief executive James Austin. Photo: supplied
Fundraising Institute of New Zealand chief executive James Austin. Photo: supplied
Philanthropy New Zealand chief executive Liz Gibbs. Photo: supplied
Philanthropy New Zealand chief executive Liz Gibbs. Photo: supplied
University of Otago marketing department researcher Dr Leah Watkins. Photo: ODT files
University of Otago marketing department researcher Dr Leah Watkins. Photo: ODT files
Wellington based Institute for Governance and Policy Studies research associate Max Rashbrooke. ...
Wellington based Institute for Governance and Policy Studies research associate Max Rashbrooke. Photo: supplied
Carisbrook School principal Ben Sincock. Photo: ODT files
Carisbrook School principal Ben Sincock. Photo: ODT files
Otago Multiple Sclerosis Society manager Tania McGregor and collector Paul Paardekooper. Photo by...
Otago Multiple Sclerosis Society manager Tania McGregor and collector Paul Paardekooper. Photo by Gregor Richardson
New Zealanders are known for being generous. It is estimated that Kiwis give just over $3 billion...
New Zealanders are known for being generous. It is estimated that Kiwis give just over $3 billion a year in voluntary donations. Photo: ODT files

New research shows more of us have stopped giving to charity. But the seriously wealthy are stepping into the gap, writes Bruce Munro. So what's the problem?

• Giving groups -where do you fit in? 

When the school bell announces morning tea at Carisbrook Primary School, children rush for their bags like Olympic athletes out of the starting blocks.

They return to their desks triumphant, clutching tasty trophies.

The teacher is tidying up after her lesson, but watchful as the hubbub gives way to attentive munching and slurping.

One boy is not at his seat. He has already come to her notice this morning; unfocused and unsettled during maths.

And that, after not being at school at all yesterday and then turning up this wet, spring morning in just a sweatshirt and track pants, soaked and shivering.

She asks who knows his whereabouts, and is told he has gone to the toilet. Fair enough. But when he returns to his desk, it is without morning tea.

''Not hungry, Miss,'' he replies when asked.

A few minutes later the class makes a noisy exit to the playground, but she calls him back just before he steps out the door.

Alone, she asks whether he has any food with him today. He shakes his head, looking away. And what about breakfast? Another shake of his head.

''Well, how about we go over to the school office and make sure you get something filling in that stomach of yours,'' she says. "We might be able to find you a waterproof jacket too.''

New Zealanders are known for being generous. It is estimated that Kiwis give just over $3 billion a year in voluntary donations.

In 2011, our per capita giving to charity was estimated at twice that of Brits, Aussies and Canadians. Admittedly, it was about half of what the average American gave, but it was still right up there, and generous to causes both domestic and international.

That, however, was then. What about now? It appears there has been two significant changes.

Firstly, a new study by University of Otago marketing department researchers shows the number of New Zealanders who never give to charity has doubled in the past eight years.

Dr Leah Watkins is the lead author of Change, Challenge and Choice: A New Zealand Consumer Lifestyles Study which examines our lifestyles, consumption choices and behavioural trends.

Her wide ranging study, released just over a fortnight ago, has some fascinating things to say about changes in Kiwi attitudes and practices since the last survey in 2005.

As a nation, we are less inclined to amass credit card debt, more likely to do some DIY in the weekend, increasingly concerned about social issues, keener to protect the environment and hanker for a return to the standards of our grandparents.

The study also found a significant jump in the number of New Zealanders giving the collection bucket a miss.

Among almost 600 questions, the 2036 study participants over the age of 18 were asked how often they gave to charity.

''What does stand out here, is that the number of people who never give to charity has increased from 19% in 2005 to 37% in 2013,'' Dr Watkins said.

''While the number who engage in community or volunteer work has remained steady.''

That means more than a third of all adults never sponsor a child, nor text to donate when a disaster strikes, nor drop a coin, let alone a note, in the bucket of this week's charity street appeal.

It is a dramatic change in less than a decade. Other results from the Lifestyles Study suggest some possible reasons for this decline in generosity.

Compared with 2005, people are significantly less likely to agree that, ''our family is better off financially than we were a year ago'' - a drop from 44% to 27%.

''And they are significantly more likely to agree that, ''I believe in being careful in how I spend my money'' - a rise from 15 percent to 32 percent.''

While frugality has been argued to be a desirable goal for societies and individuals and is recognised as a deliberate lifestyle choice,'' Dr Watkins writes in the study summary, ''it should be noted that while for some it may be a conscious and voluntary decision, for those whose personal resources are already stretched or depleted, it may be as much a necessity as it is a choice.''

So, although an increasing number of households may be reducing charitable giving as part of a deliberate decision to do a better job of cutting their coat according to their cloth, another growing group may be finding they have no cloth to cut.

This is borne out by a breakdown of who is giving. But only to a point.

The study reveals those earning less than $20,000 a year and without tertiary education, that is, those on the lower branches of the economic tree, are more likely not to give. Those earning between $50,000 and $60,000 are more likely to give more than once a month. So far, so good.

But the trend does not continue. As income levels increase from there, the frequency of individual giving plateaus or decreases.

Charitable sector 'growing'

At first glance, the assertion that more people have stopped giving to charity seems to contradict what others are saying.

James Austin, who is chief executive of the Fundraising Institute of New Zealand, says the amount being given is increasing.

''The charitable sector is growing. It is a large part of civil society, generating $18.2 billion of income a year. Of that, a little over $3 billion is through voluntary giving,'' Mr Austin said.

He is echoed by Liz Gibbs, chief executive of Philanthropy New Zealand.

''We know the bucket of money is increasing. Our 2011 research, Giving New Zealand, told us that philanthropy, including individual giving, was about $2.67 billion a year. That's an increase of about 80 percent over a five-year period.''

More up to date figures are due next month, when the new Giving New Zealand report is released.

But that bigger bucket does not preclude the Lifestyles Study findings. Where the money is coming from within the total population could be changing. Some could be giving more and others less.

To date, that analysis of the Lifestyles Study data has not been done.

But good money could be waged on the reduction in giving being most pronounced among those whom it is already known are most likely not to give - those with the least. Other indicators point to lower levels of charitable giving by younger age groups or among some ethnicities.

What is clear is that the need for charity is not diminishing. Income inequality rose rapidly from the mid 1980s to the early 2000s.

The gap has continued to widen, albeit less obviously, because the rate of return on wealth has generally been much higher than increases in salaries and wages.

And we know it. The Lifestyle Study shows we strongly agree that ''the gap is growing between the rich and the poor''.

That includes here in the South.

Poverty 'alive and well' 

At Carisbrook School, courtesy of Fonterra, Sanitarium and KidsCan, staff provide daily breakfast for up to 20 children. With the assistance of KidsCan, they also give shoes and warm, waterproof jackets to those without.

Poverty is alive and well, and not just in South Auckland, Carisbrook School principal Ben Sincock said.

''People aren't aware that poverty exists in Dunedin. Often they are very surprised that there are families on the bread line in this city.''

Carisbrook is one of two KidsCan schools in Dunedin, six in Otago and Southland, and 485 in New Zealand. It is one of 730 Kickstart Breakfast schools nationwide.

Ironically - and here is the other significant change - the same forces that have given us greater income inequality, and therefore a growing need for charity, have given charity organisations and social service agencies a potential new source of funds; extremely wealthy donors.

Mr Austin says the country is not the ''prosperous middle income society'' it once was.

''We are now getting greater variations than there used to be. Which is a challenge for many providers of social services because they have more people to help, which means they need more income.''

Therefore, we are tapping those people who have moved in to those more affluent classes ... Never had to do it before, because they weren't around.''

It is new, unfamiliar territory, he says.

''Running targeted campaigns to attract the major gift is an important potential income stream for charities, but we have a shortage of skilled fundraisers in this area.''

Wealthy New Zealanders getting involved 

While charities get their heads around the challenge, growing numbers of other ''high net value individuals'' are making it happen off their own bat.

Ms Gibbs, of Philanthropy NZ, says wealthy New Zealanders are getting involved in philanthropy more often, younger and earlier in their careers.

She cites the likes of Sam Morgan, who set up a philanthropic trust as soon as he sold TradeMe, and Derek Handley, co founder of The Hyperfactory which was sold to Meredith Corporation, who did the same.

''We're also seeing New Zealanders, slightly later in life, returning to New Zealand after having been very successful offshore and investing in this country; a combination of angel investment in start ups, often coupled with their own philanthropy.''

And they are having an impact, Ms Gibbs says.

For example, retired Northland couple Neal and Annette Plowman have decided to ''spend down'' their Next Foundation's entire $100 million fund during the next decade. It will be spent on high impact environmental and education projects.

Or take the Tindall Foundation's involvement in South Auckland, Ms Gibbs says.

Believing it was ''crazy'' that Counties Manukau District Health Board, serving high unemployment South Auckland, was having to recruit staff from overseas, the Foundation partnered with the DHB and the education sector to support locals into health career training.

''They ... have enabled about 495 skilled jobs for people who have been through that programme and are now employed by the DHB,'' Ms Gibbs says.

The goals of these wealthy givers are as lofty as they are laudable.

''There is a lot more we clearly need to be doing, which is why philanthropy has a role to play,'' Ms Gibbs says.

''We'll know we are there when New Zealand's social and economic outcomes are positive for all people.''

Unfortunately, the whole picture is also fundamentally problematic. Bring together the two significant changes - more people feeling they cannot afford to give to charity and more extremely wealthy people stepping up - and it begs a serious question.

Is this the sort of country we want to become? Of course, if people are going to be enormously wealthy, philanthropy is a better use of their money than luxury consumption. And they can do a lot of good with it.

That is the view of Max Rashbrooke, who is editor of Inequality: A New Zealand Crisis and a research associate at the Institute for Governance and Policy Studies, Victoria University of Wellington.

But, he says, we do not want to become a country whose social system depends on philanthropy. A country like the United States.

''America relies very heavily on philanthropy but it has terrible social outcomes right across the board - very high teenage pregnancy rates, low life expectancy, very high rates of alcohol and drugs problems, very high rates of poverty, all sorts of issues,'' Mr Rashbrooke says.

Inequality in the US is still on a much grander, more terrifying scale than in New Zealand. But during the past three decades we have drifted in that direction.

''We aren't now like America, but we have become more like America in the last 30 years. That is absolutely true,'' Mr Rashbrooke said.

''If we do not want to also emulate US social woes, we need a different approach, he said.

''The evidence suggests that rather than accepting big income gaps and then relying on philanthropy to close up the gaps, if you want good social outcomes you are much better having narrower income gaps in the first place, which essentially means everyone earns enough to look after themselves.

''And given that all the wealth generated in New Zealand is generated by everyone's collective efforts, there are strong arguments based around ethics and fairness that a narrower income distribution would be a fairer reflection of everyone's efforts anyway.''


Philanthropic forces
Trends shaping charitable giving

• Despite fewer people carrying cash, those who want to give still make a point of doing so. - Tania McGregor, of Otago Multiple Sclerosis Society.

• A growing number of organisations are raising funds through text to donate technology. - Tania McGregor, of Otago Multiple Sclerosis Society.

• Otago MS stopped door to door collections about five years ago, both for the safety of the volunteers and because a growing number of people did not want collectors coming to their door. - Tania McGregor, of Otago Multiple Sclerosis Society.

• The rise of face to face fundraisers focused on signing people up to ongoing giving. Last year, on main streets and in neighbourhoods, they sealed the deal with more than 65,000 new donors and raised more than $45million for charity. - Public Fundraising Regulatory Association (PFRA) data.

• The growth of participation fundraising, both charity specific events and events open to all charities, such as the Auckland Marathon. - Gwen Green, of Oxfam New Zealand

• The meteoric rise of online fundraising sites, such as PledgeMe, Givealittle and Everydayhero, which are democratising giving. - Liz Gibbs, of Philanthropy New Zealand.  

• Donors want more clarity about where their money is going. - Julie Chapman, founder of KidsCan.


Generosity
Statistically speaking

• New Zealanders give just over $3 billion a year in voluntary donations. That equates to about $800 per person per year.

• In 2011, New Zealanders' giving equated to 1.35% of GDP, putting us ahead of Canada, Australia and the United Kingdom (each on about 0.6%) but behind the United States (2%).

• New research suggests the number of New Zealanders who never give to charity has almost doubled in eight years (from 19% in 2005 to 37% in 2013).

• There are 27,053 registered charities in New Zealand. They have a combined annual income of $16.34 billion.

• Otago has 1882 registered charities, with a combined annual income of $880 million.

• The five largest groupings within the charity sector, by number of registered charities, are: education, training and research (21.8%); religious activities (17.3%); arts, culture and heritage (9.0%); community development (7.5%); and, social services (7.2%).

• About 455,000 New Zealanders do voluntary work, contributing up to 2.7 million hours of work each week.


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