Is Australia one of the most generous countries in the world?

Each year for the past ten years, the Charities Aid Fund publishes a list of “the world’s most generous countries.” It’s called the CAF World Giving Index (https://www.cafonline.org/docs/default-source/about-us-publications/caf_wgi_10th_edition_report_2712a_web_101019.pdf) and it uses data from the Gallup World Poll (https://www.gallup.com/analytics/232838/world-poll.aspx).

Based on 10 years of data (2009 – 2018) from 128 countries, the CAF ranks Australia #4 in the world in generosity, with the USA, Myanmar and New Zealand ahead of us.

That’s great news for Australia and a strong indication of our overall charitable endeavours.

But are we really one of the most generous countries in the world? Well, as I tell my research students, it all depends on how you define the variable in question and how you measure it. Which is why it’s always a good idea to go beyond the headline and look at the Methods section of any data collection report or empirical publication.

In the Gallup World Poll, there are three questions that pertain to charitable endeavours.

In the last 30 days, have you:

  • Helped a stranger or someone you didn’t know who needed help?
  • Donated money to a charity?
  • Volunteered your time to an organisation?

 In calculating a country’s giving score, each of the responses are weighted equally.

Are these 3 questions a good indication of generosity? With generosity defined as the quality of being kind and generous (without reference to the quantum of each of the above) then the answer is certainly YES. And my hat is off to Australia for its overall generosity.

But before we take this to mean that we are equally financially generous with regard to our charitable donations (i.e., gifts of cash and other near-cash assets such as real estate, art, etc.), we need to look deeper.

Specifically, we need to examine tax-deductible charitable donations. Now, don’t get me wrong – helping others in need, especially when it means you have to go out of your way, and volunteering your time are generous and noble behaviours that contribute to our national ethic. But cash is cash, and for me, if you have cash beyond your needs, that puts giving cash in a very noble giving category. And the quantum of cash relative to your net worth is an even more telling indicator of financial generosity.

Each year the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at the Queensland University of Technology (QUT) publishes a report (https://www.qut.edu.au/business/about/school-of-accountancy/research/australian-centre-for-philanthropy-and-nonprofit-studies) on the tax-deductible charitable donations claimed by Australia’s individual taxpayers (not corporates and related entities). And they use information directly from the Australian Taxation Office. Here’s what the ATO data for 2016-17 reveal about charitable donations:

  • On average, each of us gives away tax-deductible cash of 0.42% (.0042 or approximately 4/10 of 1%) of our annual taxable income.
  • About a third (32.6%) of us do not make a tax-deductible donation of any kind, even a $2.00 donation (the lowest amount of cash giving that is tax-deductible).
  • More than 44% of those with taxable incomes of $1,000,000 ($1m) or more make no take-deductible donations of any kind, not even a single $2.00 donation.

So while we are, on average, a generous nation, we have a long way to go before we can feel comfortable labelling ourselves a financially generous nation – especially amongst those earning incomes at the highest levels.