World Giving Index

Australia is the most generous country in the world

The high levels of involvement in the three giving behaviours in Australia mean that this country sits at the top of the World Giving Index this year. In a typical month, more than two-thirds of Australians donate money to charity and help a stranger. More than a third volunteer. In addition, Australia has the highest score on average over the past five years. There is tangible evidence that the Australian government is taking action to further encourage philanthropy, allowing the donations and efforts of the Australian public to have yet more impact.

Globally, average participation in giving has fallen since 2007

The average participation in each of the giving behaviours has fallen since 2007. Participation in helping strangers stood at 47.0% in 2007, and fell to 45.1% by 2011. The equivalent figure for donating money to charity was 29.8% in 2007, falling to 28.0% in 2011. The decline for volunteering time was the largest of the three: from 21.4% to 18.4%. Although the percentage of people participating has declined, the actual number of people who donate money and volunteer time is higher than it was in 2007. This, however, has been shown to be due to the rise in the global adult population over the period - had there been no increase in population since 2007, fewer people would now be engaged in each of the three giving behaviours.

There has been a 'double dip' in giving

Global participation in each of the three behaviours was at its lowest level in 2009. Engagement in the three behaviours then rebounded relatively strongly in 2010, before falling again in 2011. Over recent years, the fluctuation in global participation in giving has echoed both the rate of growth in global gross domestic product (GDP), and the numbers of disasters and emergencies recorded around the world.

2011 witnessed a sharp fall in engagement across giving behaviours

Between 2010 and 2011 the number of people who have donated money, volunteered time and helped a stranger have each, on average, fallen by at least 100 million. Average participation has also fallen by approximately two percentage points in each case. The most generous countries have very diverse social, economic, geographic and political profiles The World Giving Index focuses on the percentage of people who donate money, volunteer time, and help a stranger, to any extent, in a typical month. It does not quantify the amount of money donated, the number of hours volunteered, or the number of strangers helped. The strength of this approach is that it provides a clear view of the basic state of giving worldwide - by showing who is 'included' in giving, and who is not. The 20 highest ranked countries have very diverse profiles. Geographically, the list includes at least one country from each continent. In terms of economic strength, it includes Qatar, the second highest on the list of countries by GDP per capita, and Liberia, the second lowest. It includes the United States of America, a country of over 300 million people, and Trinidad and Tobago, a country of just over one million.

Helping strangers is the most commonplace giving behaviour, volunteering time the least

The proportion of people who help strangers on a monthly basis (45.1%) is more than seventeen percentage points greater than the proportion who donate money, and more than double the proportion who volunteer time. Over time, participation levels in the three giving behaviours have fluctuated in unison Over the five-year period examined in this report, levels of engagement in the three behaviours have broadly fluctuated in unison. Only at one point - 2008 - was any divergence observed. At this point, the percentage of people donating money rose markedly as engagement in helping strangers fell.

Continents differ clearly in how they give

The report shows how much variation exists in terms of the extent to which people of different continents are able to engage in the three giving behaviours. Engagement in donating money for example is more than four times higher in Oceania than it is in Africa. Average participation in helping strangers is also far higher in Africa than it is in either Europe or Asia. Africa has seen a clear reduction in its giving, over the past five years Africa's average giving score for the most recent year stands three percentage points lower than its average across the past five years. All other continents are within one percentage point of their five- year average. Moreover, the reduction in giving in Africa has been felt evenly across the three giving behaviours of donating money, volunteering time and helping strangers.

Globally, women donate money more than men but men volunteer time and help a stranger more than women

Throughout the past five years, at any point in time, there has been less than a five percentage point difference between the proportion of men and women who donate money to charity, volunteer time, and help strangers. Whilst it is true that more women donate money to charity than men, and that more men volunteer time and help strangers, it is also true that the aggregate differences between the two are relatively narrow. Deeper research would be required to understand if the total value of money donated, or total amount of time dedicated to giving, are as similar.

Young people are less engaged with donating money to charity

There is a marked difference in the involvement of the world's youngest and oldest people when it comes to donating money. Over the past five years, the youngest generation (16 - 24 year olds) has consistently been within a few percentage points of the oldest generation (50+) in terms of likelihood to volunteer time and helping strangers, but as much as 10 percentage points less likely to donate money to charity.

Five myths about charitable giving

By Ken Stern, Published: December 27

http://www.washingtonpost.com/opinions/five-myths-about-charitable-giving/2012/12/27/99cde18a-4de6-11e2-839d-d54cc6e49b63_print.html

Ken Stern is the chief executive of Palisades Media Ventures and a former chief executive of National Public Radio. His book “With Charity for All: Why Charities Are Failing and a Better Way to Give,” will be published in February.
by Ken Stern The last few days of the year may be a time of celebration and indulgence, but it is also when many people think about helping others. Though much of the roughly $240 billion in individual charitable contributions comes in December, these donations are often made hastily, based on poor information. Before writing those end-of-the-year checks, here are some things to remember about how charities work and how to evaluate them.

1. Charities are principally dedicated to serving the poor and needy.
The term “charity” is associated with helping the poor and downtrodden, but American charities — 1.1 million organizations with $1.5 trillion in annual revenue — make up a large, rapidly growing economic sector that includes health care, higher education, scientific research, social services and the arts. There is incredible diversity among charities, from tiny neighborhood food banks to multi-state hospital chains boasting lavish concierge services and million-dollar salaries for executives. In fact, hospitals are the largest component of the U.S. charitable sector, but they are more likely to be profitable than for-profit hospitals and aren’t much more likely to serve the needy.
It’s also astonishingly easy to start a charity. The Internal Revenue Service approves more than 99.5 percent of charitable applications, often in very short order. Because of this, the sector includes more than a few organizations that have little connection to common notions of doing good: the Sugar Bowl, the U.S. Golf Association, the Renegade Roller Derby team in Bend, Ore., and the All Colorado Beer Festival, just to name a few.


2. Donors should reward charities that have low overhead.
The notion that charities should put as much money as possible into services and as little as possible into overhead expenses is widely accepted. Overhead ratios, which measure the relationship between a charity’s income and expenses, are one factor in popular rating systems such as Charity Navigator and the Better Business Bureau’s Wise Giving Alliance. Charity Navigator, for example, suggests that administrative spending greater than 30 percent is unreasonable, and it rewards its highest ranking to organizations that put less than 15 percent of their resources toward such costs.
Low overhead has become a point of pride — and marketing — for charities such as the Brother’s Brother Foundation, a Pittsburgh-based relief organization whose Web site boasts that “less than 1% of the value of donations [is] used for overhead.”
But charities need to spend on research, training and financial systems, all classified as “overhead,” to be effective. Those that shortchange these investments — and many do — are less likely to achieve their goals. The American Red Cross, for instance, struggled during Hurricanes Katrina and Sandy in part because it hadn’t invested enough in the infrastructure necessary to handle complex emergency relief.
That lack of investment is partly due to public pressure, rather than a shortage of funding. When then-Red Cross chief executive Bernadine Healy tried to appropriate unused money from the 9/11 Liberty Fund to correct weaknesses in the group’s broader emergency response capacity, she was forced to resign.


3. Tax incentives are critical to charitable giving.
People with income in the lowest quintile give a higher percentage of their earnings to charity than do more wealthy Americans. This pattern persists despite the fact that low earners have less disposable income and rarely take advantage of itemized tax deductions for charitable donations. Sure, some contributions are tax-driven: Almost a quarter of online giving occurs in the last two days of the year as taxpayers rush to qualify for deductions. But Americans’ generosity may be more resistant to changes in the tax laws than most people think.
According to Congress’s Joint Committee on Taxation, the charitable tax deduction will cost the federal government $230 billion from 2010 to 2014. Some economists believe that charities would lose less than that amount if the exemption were eliminated or modified, since people give for many reasons unrelated to tax incentives. Because of the perceived unfairness and inefficiency of the current system, many analysts, including at the Congressional Budget Office, have begun to look at substantial changes, from establishing floors or ceilings for deductions (sometimes in combination with making incentives available to non-itemizers) all the way up to eliminating the deduction.


4. Nonprofits are not profitable.
In 2010, U.S. charities reported more than $2.7 trillion in assets. Even putting aside the multibillion-dollar endowments of Harvard and Yale universities, many lesser-known charities have substantial war chests. In 2007, Ascension Health, a large Midwest charity hospital chain, reported reserves of $7.4 billion, more than twice the cash on hand at the Walt Disney Co.
Some donors look for small, underfunded charities, thinking their gifts will make a bigger difference. But that is not necessarily an effective strategy. Many of the charities with strong track records in delivering results — organizations such as Youth Villages of Memphis and the Nature Conservancy — are also quite good at building financial reserves. Charities like these identify clear goals and have third parties evaluate their work, practices that are more important than how much they have in the bank.


5. It is easy to find a good charity to support.
In fact, it is enormously difficult. Not only is there considerable confusion among charities — for example, there are more than 60,000 with the word “veteran” in their names — there is little information on groups’ effectiveness. The mutual fund industry employs 159,000 people to help investors make good choices. But there are fewer than 100 people nationwide whose jobs are to help the giving public make wise donations. So what is a conscientious donor to do?
Put in the work. On average, Americans spend more time watching television in one day than they do researching charities in an entire year. Finding good charities takes time. It means using the few organizations, such as GiveWell, that do in-depth studies of charities’ effectiveness. And it means remembering that the best organizations, charitable or otherwise, are built on more than a good story or a charismatic leader.
As Warren Buffett once said: “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” That’s good advice when trying to make sure donated dollars actually do good.