Dr Christopher Baker

Last week I attended a forum entitled Philanthropy, Old, New and Enduring presented by Swinburne University’s Asia Pacific Centre for Social Investment and Philanthropy in conjunction with O’Keefe and Partners. 

Julie Johnson, Managing Director at O’Keefe Partners, presented on giving trends research which they undertake annually, evaluating changes in performance and perceptions from not for profits.  It was apparent from much of the information presented that perceptions are radically different to performance and I don’t know how valuable that is in practical terms when one is trying to implement a fundraising plan. But what was quite interesting was to see that corporate sponsorship had increased in 2011 – 2012, and differences in donor segmentation.  By that we mean – who are the most philanthropic amongst us as ranked by age.  The research presented indicated that people aged 40 – 59 are a new part of the population who are giving now, joining the 60 – 74 year olds, and that their charitable emphasis is on social and family welfare and education (which probably reflects where they are in their lives and their focus on family).

One key change in perceptions which I did find useful, was in the challenges faced by not for profit organisations.  Apparently, for the first time, charitable competition is a key factor, or something that organisations are taking into consideration, joining issues such as the economy, acquisition costs (ie costs of fundraising) and the global financial crisis.

The good news is that the research indicated there will be growth in the philanthropic landscape in the next 3 -5 years with an increase in the giving pool, and that people want to put money where it will make a difference, but also want to see accountability and transparency.  Key motivations seem to be wanting to invest in society and making it a better place.

Dr Christopher Baker from Swinburne then spoke on his research on Inheritance and Charitable Giving, which involved a long search into Victorian probate records from 2006 to see where, if any, charitable bequests were being made.

The data showed that inevitably, immediate family are the main beneficiaries of wills and that 9/10ths goes to children.  Only 1 in 20 wills make a charitable bequest which make up 1% of the total value of the testamentary trusts, and the wealthy do not give more proportionally than the less well off.

The data represents a snapshot of the intentions of people who were mostly born before 1930, giving weight to Dr Baker’s assertion that he has concluded that “it is indeed older people who tend to die” and therefore people who had a particular life experience including living through the depression, World War II and the norm of nuclear families. Dr Baker points out that in 2006 Australia had experienced its 15th consecutive year of growth in net wealth (with 55% of wealth held in houses and 70% home ownership), so that when these over 80 year olds passed away, they were mostly relatively comfortable and their children would arguably be in their 50s and no longer necessarily economically dependent (thus perhaps leaving space for a charitable bequest without this being to the detriment of the family if only one had thought of it at the time of amending/updating one’s will).

Probate is a record of personal assets held at time of death and excludes superannuation.  Apparently there are 35,000 deaths each year in Victoria.  Of the probate records sampled by Dr Baker, out of 1700 final estates (with no surviving spouse) 91 bequests were made to charities and 75% of the records viewed were of estates less than $500,000.  The value of total bequests studied was $11 million, but the typical – ie median bequest was $20,500.  Dr Baker’s studies showed that smaller estates left a larger proportion to charity.  However, he notes that the probate data under-represents the very wealthy who may well have other vehicles for investment (such as trusts etc) outside their personal estate.

What was interesting is that 80% of estates of people with children left nothing to charity, but people without children were 10 times more likely to leave a charitable distribution.

A national study (excluding Queensland*) will be undertaken by Dr Baker next year, and it will be interesting to see if there are state differences.

As an aside, Include a Charity is a new campaign aimed at increasing people’s awareness about making charitable bequests and providing more information to financial and legal advisers.

The session ended with a short panel discussion.

Does your organisation have a bequests strategy?  On the basis of this data, one might be discouraged from even considering chasing bequests – is it too hard? or is it a blue-sky opportunity?

How do you feel about bequests in your own situation?    Is an argument for “giving while living” a contradiction of the benefits of giving through bequests?

Let me know what you think – I look forward to your comments.

* Apparently the Queensland Government has denied a request to waive search fees on probate records for Dr Baker’s research, so they will be excluded from the study.