Get App
How to donate to charity when cash is tight
20 Nov 2020
Under normal circumstances, as Christmas approaches, many of us would be thinking about making a donation to charity during the ‘time of giving’. Alas, it’s 2020 and circumstances are far from normal, not least for many people’s budgets.
Like other parts of Australia’s economy, the charity sector has been hit hard by COVID-19. But can you still make an impact if donating money isn’t an option right now?
This article covers:
- How have charities been affected by COVID-19?
- Are there alternatives to donating cash to charity?
- How can you donate money to charity?
- Which is the best charity to donate to?
How have charities been affected by COVID-19?
With many people losing their job or working fewer hours during the crisis, it’s no surprise that charities have seen a drop in the amount of money being received.
Donations are expected to fall by over 7% in 2020, with a further drop of almost 12% predicted in 2021, according to a report from wealth management business JBWere. At the same time, demand for many charities’ services has increased. Food rescue group OzHarvest reported that demand for food relief is at an all-time high, while mental health charity Beyond Blue said ‘contacts’ it received about depression doubled in July 2020 when Victoria reintroduced stage 3 restrictions.
The predicted drop in donations in 2020 and 2021 follows a general trend of Australian donating more money year on year. The Australian Communities report shows total revenue for the charities and not-for-profit sector increased from $103 billion in 2014 to a predicted $164 billion in 2020. However, the report indicates that most Australians say they would give less if they were to experience financial hardship.
One person who knows more than most how the pandemic has impacted charities is Matthew Boyd, CEO of Vollie, an organisation which supports not-for-profits by connecting them with skilled volunteers willing to donate their time online.
He told Canstar that the vast majority of charities he has spoken to weren’t prepared when COVID hit.
“So many of these organisations were relying on that one big annual fundraiser that gets 500 bums on seats and raises half a million dollars to fund the organisation for the next 12 months,” he said.
“Then all of a sudden, they couldn’t do that and they’re thinking, ‘What are we going to do now?’. So overnight, they’ve needed to completely transform the way they operate and engage donors and volunteers and so on.”
On a more positive note, Matthew said that the number of people who have recently looked to volunteering as an alternative to other forms of charitable giving suggests people’s empathy levels have remained high.
“From March, as soon as COVID-19 hit and the lockdowns commenced, our engagement has gone through the roof,” he said.
“We were hearing stories on a daily basis from people who had lost their jobs or were stuck at home and were looking to do something a little bit different from their day-to-day role, and are just so interested in working with charities.”
According to Matthew, the most in-demand skills among charities are in tech, marketing and operations. In particular, he said charities often need support with developing software solutions to improve their efficiency, support with branding such as logo design, and assistance with creating legal documents.
Of course, donating time and skills is just one of the ways Australians may be able to support charities if they don’t have cash to spare.
Alternatives to donating cash to charity
Here are some ideas for helping out without forking out, ‘donated’ by ME Bank’s General Manager for Personal Banking, Claudio Mazzarella.
1. Donate reward points
If you’re a loyalty scheme member, chances are you can turn reward points into charitable donations, according to Claudio. Frequent flyer points, and points earned through supermarket reward schemes, may be swapped for donations to a wide choice of charities.
2. Donate goods
If you have quality items lying around the home that you no longer need, these could be turned into cash by your local op shop. Consider checking which items are in demand before dropping them off to avoid donating unwanted goods.
Our students, staff and families have been collecting their winter woolies to donate to the Vinnies Winter Appeal.@VinniesAust @VinniesNSW #sharethelove #warmtheirhearts pic.twitter.com/pNZ78OwP4H
— Mater Dei Wagga (@MaterDeiWagga) July 1, 2020
3. Donate through your spending
Some banks may make a small donation to charity every time you make a purchase through certain transaction accounts. For example, ME Bank says it donates 1c to the National Breast Cancer Foundation each time a customer pays with its pink Buck card.
4. Donate blood
Blood donations are made through Australian Red Cross Lifeblood. For those who are eligible, it says it takes about an hour to give blood which can be made into 22 different medical treatments. About a third of blood donations are used to treat people with cancer, for example.
Behind every amazing health worker there’s an amazing donor. Support our frontline by donating blood or plasma for patients around Australia. https://t.co/3q0H3dWSJT pic.twitter.com/UK26wb3jpY
— lifebloodau (@lifebloodau) September 28, 2020
How to donate money to charity
While cash is tight for many households, some may still be in a position to make a financial donation to charity. There are a range of possible options for donating money, including giving cash (e.g. a bucket collection), donating online (direct to the charity or through sites like GoFundMe) or via bank direct debit. Some people even choose to make a donation through their will for after they have passed away.
Whichever way you might choose to donate, it’s important to ensure that the charity you’re donating to is legitimate and your money is getting to the people or cause it’s intended to help.
The Australian Charities and Not For Profit Commission (ACNC) suggests taking the following steps before donating:
1. Check the charity’s name
Using the ACNC’s Charity Register, you can enter the name or ABN of the charity you’re considering donating to, to ensure that it’s registered and regulated. The ACNC notes that registration with it is voluntary, so some charities may not be listed. If that’s the case, it suggests checking the registers of state or territory fundraising regulators for the name of any organisation asking for donations.
2. Ask for ID from anyone looking for a donation
Ask to see the person’s identification, as well as evidence that they are authorised to act on a charity’s behalf. You could also call the charity to verify the person’s identity.
3. Don’t feel pressured into donating
Being pressured to make a donation can be a warning sign, the ACNC says. If this happens, you could tell the person you will take their contact details and decide later or, if the person is in your home and you feel pressurised or uncomfortable, ask them to leave and report them if necessary.
4. Be careful of online requests for donations
The ACNC says this is particularly important if you are asked to click on a link or provide information via an email sent by someone you do not know. Before donating online, check that you are on the charity’s official website and that it is secure to avoid potential scams.
Victims of fake charity scams have reported total losses of $138,000 since 1 January 2020, with the highest personal loss of $30,000. If you've been the victim of a fake charity scam, report it to Scamwatch at https://t.co/XZWL2quEoD #ScamsWeek2020 pic.twitter.com/ksCF3IxwbY
— ACNC (@ACNC_gov_au) August 20, 2020
5. Don’t necessarily rule our charities if you can’t get a tax deduction
In fact, the majority of legitimate charities are not deductible gift recipients (DGRs) endorsed by the Australian Taxation Office (ATO) to offer tax deductions on donations, the ACNC says. If you’d like to find out more about DGRs, a guide is available on the ACNC website.
The Australian Business Register allows consumers to search for charities that are DGR-endorsed, if you’d like to donate to a charity and claim a tax deduction.
6. Check how the charity uses donations
To do this, the ACNC says you could check the charity’s annual report online and find out more about its activities, its mission and its financial situation.
While it’s wise to exercise caution, the ACNC urges potential donors not to let it deter them from giving.
“Take the time to verify charitable information and ask questions rather than choosing not to give at all. Your support is needed and important,” it says.
Which is the best charity to donate to?
Choosing a cause and an organisation to donate to is a very personal decision. You may wish to consider causes that impact you or a loved one personally, or a charity that is local to you. You may also wish to make a decision based on financial considerations, including how your money will be used by the charity, and whether you will be eligible for a tax deduction based on the amount you donate.
If you are volunteering, you may want to decide based on which charity would benefit most from your specific skills.
Ultimately, with so many causes to choose from, Matthew suggests following your heart and picking the cause that means most to you.
“It’s okay to be selfish because there are a lot of people looking to support a lot of different causes, and if you go with a cause that you’re truly passionate about, you will work hard for that cause naturally, and you’ll feel great about it,” he said.
“And if you’re really not sure where your passions lie, try a few different things and you will very quickly understand what your passion is.”
Main image source: Lemon Tree Images (Shutterstock).
This article was reviewed by our Sub Editor Jacqueline Belesky before it was updated, as part of our fact-checking process.
