By Angela Singer
As the New Zealand economy con-tinues to contract, charities and aid organisations are wondering if New Zealanders will continue their famed generosity.
It would seem likely that one of the first expenses to be cut when things get financially tight is charitable giving. But an opposing trend is being seen by British and United States charities, with most reporting no decrease in funding from individual private donors over the past year. Online donations in the US continued to grow in 2008. It is thought that instead of cutting back on giving, people are become more selective about the charity they give to.
The US Center on Philanthropy at Indiana University found that, “most households continue to give during times of financial insecurity, although some give less”, suggesting that individual giving is recession resistant, not recession proof.
Spending decisions are questions of priorities and donors may not cut charitable giving first, says Professor Cathy Pharoah, director of the independent ESRC Centre for Charitable Giving and Philanthropy in the United Kingdom. “Charities can help themselves by demonstrating that contributions are both needed and having a measurable impact. Lapsed donors often say they lost faith in the effectiveness of their giving.”
Comparing aid organisations can be difficult, but one factor in which donors are taking more interest is how much of their donation supports their chosen cause and how much is kept by the aid organisation.
A December 2008 phone survey by Spanz of six aid organisations operating in New Zealand revealed that two well known Christian aid organisations, Tear Fund and World Vision, keep up to 25 percent of every donation. Tear Fund says it keeps on average 20-24 percent; World Vision says it keeps on average 22 percent.
Oxfam keeps around 22 percent of your donation, splitting this into approximately 4 percent kept for administration and 18 percent that’s, “invested to generate income to get their message out there”.
Christian World Service (CWS) keeps no more than 10 percent. NZ Red Cross says that when a donation is part of a special appeal, 100 percent is passed on, but with other donations it keeps approximately 10 percent.
The Presbyterian Church of Aotearfoa New Zealand’s own Global Mission Office is the only organisation contacted that keeps no administration costs and sends 100 percent of all donations on to the disaster or project designated.
Although the forecast for future giviffng during the recession doesn’t look as bad as might be expected, if money does become tight, it is likely that people will find other non-financial ways to donate: for example, donating their time or goods. One of the reasons for this is that giving makes a majority of people feel good, or as the scientists would put it, giving activates the brain’s pleasure centres. The University of Oregon recently conducted research on the brain effects of donating money to a worthy cause. People were given $100 and their brain activity was monitored via an MRI scan as the money was transferred to a food bank’s bank account. Then the test was repeated but the subjects were allowed to choose how to donate the money. In the automatic transfer of funds to the food bank, pleasure areas of the brain were significantly lit up. In the second part of the study, when the subject chose how to donate the money, the effect was even greater.