Once-off mega donation led to surge in ATO charity statistics, KPMG analysis finds

Australians donated $9.1 billion to charity in the 2023 financial year, with the average tax-deductible donation surging 90.4 per cent from $1,067 to $2,032, KPMG analysis of ATO data revealed last Tuesday (13 January).

The surge was largely driven by a whopping $5 billion donation made by Andrew and Nicola Forrest to the Minderoo Foundation, which has funded climate and humanitarian projects.

“While the cost-of-living crisis squeezed family budgets and led to a fall in the value of donations it didn’t stop the Aussie spirit of generosity as more chose to donate than the previous year,” KPMG urban economist, Terry Rawnsley, said.

“Despite our generosity, charities are still facing pressure on two sides: a declining donor base in some states and heightened demand for their services amid cost-of-living pressures.”

The Forrest donation aside, KPMG found that more Australians donated in 2023 than the year prior. The number of Aussies donating to charity rose by 216,000 people to almost 4.5 million in the 2023 financial year, the firm’s analysis found.

Western Australia led in generosity, with an average donation of $1,155 per person. This excluded the Forrests’ hefty gift, which bumped up the average donation to $11,538 per person.

NSW was home to the most donors (1.4 million), but their average donation shrank 18.6 per cent in 2022–23 compared to the year prior, to $1,063. Victoria’s average donation also fell by 1.9 per cent, to $963 per person.

The Northern Territory had the lowest average donation rate at $503, which KPMG noted reflected typical income disparities across the country.

KPMG’s analysis found that affluent suburbs donated less in 2023, while others increased their generosity. Sydney’s Eastern Suburbs donated 34 per cent less in 2022–23 than the year prior, while the city and inner south donated 60 per cent less.

In comparison, the Central Coast saw average donations rise by 63 per cent, while average donations in Toowoomba, in regional Queensland, rose by 87 per cent.

Rawnsley noted that the influx of people from the cities to the regions during the pandemic could have driven the rise in philanthropy in regional areas.

“Post COVID we saw a strong migration of people out of the inner city to lifestyle-oriented locations like the Central Coast and Southern Highlands. It stands to reason that many high-net-worth individuals were part of that migration and have brought their philanthropy to these regional areas,” he said.

KPMG tax partner Craig Robinson noted that tax deductions could enable taxpayers to be more generous with their donations.

For taxpayers looking to receive a deduction for their donations, he noted that they must not receive any material benefit in return, meaning raffle tickets and fundraising dinners would not qualify for a tax deduction. Only donations to recognised charities would be deductible, he added.

“When considering a donation, taxpayers will only be able to claim a deduction for donations to qualifying deductible gift recipients.”

“When considering making donations to international causes, individuals may wish to check whether there is an entity or partner organisation which holds Australian deductible gift recipient status to obtain an income tax deduction.”