2016

Giving Trends & PredictionsAn OKP Initiative

The Giving Trends research team is excited to bring you a fresh new look for Giving Trends & Predictions 2016. We have taken on board some feedback from our subscribers to ensure Giving Trends continues to be a relevant and highly valued resource for people in the business of fundraising and philanthropy.

We would like to take this opportunity to thank everyone who has taken the time to complete the Giving Trends survey and shared their valuable insight, knowledge and experience. It is wonderful to be part of an industry where people practice the generosity they preach and are so willing to contribute their time for the benefit of others.

We hope that Giving Trends & Predictions 2016 inspires you to examine your fundraising efforts, explore new possibilities and feel empowered to try something new.

Introduction

Contents

Management’s Letter 4

To Our Shareholders 7

Chairman’s statement 8

Financials 10

Financial Highlights 12

Management’s Discussion and Analysis 14

Detailed Results of Operations 18

Summary of Operating Data 22

Corporate Information 26

Our Company 28

The History 30

The Board and Capital Structure 32

Contents

Chapter 1 – Looking Back

5 Programs Most Likely to Feature in the Fundraising

5 Programs Least Likely to Feature in Fundraising

Programs Most Likely to Deliver Income Growth

Chapter 2 – Where We Currently Stand

Giving Survey Overview of Operating Budget &Fundraising Income Chapter 3 – Looking Forward Corporate VS Private Giving Biggest Changes

Chapter 4 – An OKP Perspective Special Investigation Series

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Examine: the activities and performance of organisations seeking philanthropic support.

Explore: the current and future giving environment.

Empower: fundraisers with information, knowledge and insights.

Giving Trends Aims to...

Giving Trends is a resource developed specifically for organisations seeking philanthropic and corporate support. Underpinned by ongoing market research and analysis, it provides valuable intelligence and insight for those looking to advance their efforts and be more strategic in their approach.

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Historically, Giving Trends has focused on securing the participation of CEOs, topline managers and other leaders in its annual survey. However, we have now decided to cast a wider net and seek input from people working at multiple levels within the fundraising industry. We felt that it was important to include the perspectives of those “on the ground” so to speak, and create a larger sample from which to draw our data.

Giving Trends was fortunate to secure the participation of people from a wide range of sectors. The most heavily represented sector was the Education sector, followed by the Health sector, Social, Family & Youth Welfare sector and the Disability sector.

Geographically, survey participants came from every State and Territory of Australia and a small number from overseas. The majority of organisations represented were based in capital cities with 11% being based in rural areas of Australia.

The survey on which this document is based was conducted in late 2015. Any annual figures quoted pertain to the 2014/2015 financial year.

Through the Giving Trends reports and associated activities, we hope to build the capacity of the third sector and support organisations in their growth and development. The resources that we provide have been designed to help professionals in the sector:

• Remain up to date and in the know of industry trends

• Make informed decisions and wiser investments

• Understand their position within the broader philanthropic environment

• Refine methodologies for optimal success

• Gain insight into the future direction of giving in Australia

Data Collection

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Chapter 1 Looking Back

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The 5 Programs most likely to feature in the fundraising mix

Topping the list of most popular fundraising programs was online fundraising, with 83% of survey respondents reporting that their organisations ran an online fundraising program in the 2014/15 financial year. Not that long ago, we were warning not-for-profits to embrace technological change or be left behind. So it is very encouraging to see this significant shift in the fundraising landscape.

Not only is online fundraising becoming more popular with charities and not for profits, it is evidently more popular with donors. Online fundraising income increased for 72% of those future-focused organisations, with a further 24% reporting income in line with the previous year.

Direct mail remained both popular and effective. In the 2014/15 financial year, 79% of organisations surveyed conducted at least one direct mail appeal. Direct mail income was steady or rising for 73% of survey respondents.

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Online Giving 83%

Direct Mail 79%

Major Gifts 78%

Bequests 76% Acquisition/Corporate Sponsorship 76%

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The 5 Programs least likely to feature in the fundraising mix

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Service Clubs 12%

Face to Face Selling 15%

Emergency Appeals 17%

Endowment 20%

Telemarketing 23%

The list of unpopular fundraising programs shows that the sector has responded to public criticism of more aggressive and unsolicited fundraising methods, such as face to face selling (often referred to as chugging or charity mugging) and telemarketing. However, it is important to note that these fundraising methods can be effective in the right circumstances.One program which probably deserves greater popularity is endowment. From an organisational perspective, endowment programs help create long-term financial security and soften the impact of economic downturn. For donors, knowing that their support will safeguard the future of their chosen charity is incredibly motivating. In 2014/15, endowment income was steady or rising for 93% of organisations who employed this underrated fundraising method.

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PROGRAMS MOST LIKELY TO DELIVER INCOME GROWTH

Face to Face

SellingOnline

Giving & Emergency

Appeal

Major Gifts

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While only a small number of organisations utilised Face to Face selling in 2014/15, over 80% reported an increased income from that activity. Specifically, income growth was generated by Online Giving, Emergency Appeal (72% of respondents) and Major Gifts (62% of respondents) programs.

Other successful income generating programs where Online Giving, Emergency Appeal (which generated income growth for 72% of organisations) and Major Gifts, where income growth was experienced by 64% of respondents.

It is interesting to note that a Major Gift program was significantly more likely to generate income growth than a Capital Campaign, despite them being very similar forms of fundraising.

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Chapter 2 Where we currently stand

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Survey participants were asked to give their opinions on the state of various types of giving.

While most respondents seemed confident in their view of personal giving, a significant proportion of respondents were unsure when it came to other forms of giving.

Over half of the people surveyed named the 60-74 age group as the most generous. While 29% said 40-59 year olds were the most generous. Only 8% thought people aged over 75 were the most generous, slightly more than the 7% who thought 25-39 year old were the most generous.

Type of Giving Rising Falling No Change Unsure

Personal Giving 54% 16% 26% 4%

Corporate Giving 18% 46% 19% 17%

Corporate Sponsorship 18% 43% 22% 17%

Grant-making 28% 26% 25% 21%

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Overview of operating budget, fundraising income and full-time equivalent employees

Knowing where your organisation stands in relation to your colleagues can help you better understand your position in the marketplace, set more realistic goals and plan for future growth.

Under $250,000 23.3%

11.3%

12.0%

6.7%

2.0%

3.4%

11.3%

18.0%

5.3%

6.0%

0.7%

Fundraising Income

$250,000 to $500,000

$1-3 million

$5-10 million

$20-50 million

$500,000 to $1 million

$3-5 million

$10-20 million

Under $500,000 13.4%

14.8%

6.0%

12.8%

6.7%

6.0%

8.1%

12.8%

10.1%

9.3%

%Operating Budget

$500,000 to $1 million

$3-5 million

$10-20 million

$50-100 million

Unsure

$1-3 million

$5-10 million

$20-50 million

Over $100 million $50-100 million

Unsure

Over $100 million

Less than 10 24.3%

11.8%

26.3%

17.9%

19.7%

FTE Employees

10-50

51-100

100-500

Over 500

%

10

%

While we were very pleased to raise over $1 million last year, I am wondering if perhaps we should be aiming even higher.”

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The Baby Boomers are without a doubt the most generous supporters of our organisation. They not only give more, they give more often.

We have become increasingly more

reliant on personal giving as the

corporate dollar gets harder to secure.

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” ”

“

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Chapter 3 Looking Forward

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Corporate vs Private GivingIt appears that third sector workers are mostly very positive about the future of philanthropy in Australia. Over 70% of survey respondents reported feeling optimistic about philanthropy over the next 3 years. However, when it comes to feelings towards corporate engagement, the sector is very much divided. Only half the people surveyed felt optimistic about corporate engagement over the next 3 years. The remaining people where either feeling unsure (25%) or pessimistic (29%) about corporate engagement in the coming years.

Demand For ServicesOver 75% of respondents expect demand for their services to increase over the next 3 years, while only 1% predict demand will decrease. This is likely to mean organistions will be under increasing pressure to grow fundraising income to meet service demands and cover funding shortfalls.

Gift Seeking ApproachesDespite advancements in technology and the growing popularity of online giving, survey results show most organisations are planning to stick with tried and tested methods of fundraising. Survey participants were asked to predict which three solicitation techniques would be most effective for their organisations. The top three responses were direct mail, personal approaches (including major gifts, capital campaigns) and planned giving (including bequests and endowment). Respondents felt the least effective solicitation methods would be door knocks, merchandise programs and SMS campaigns.

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What do you think the biggest changes will be to the industry in the next 5-10 years?

The increasingly crowded marketplace will

become unsustainable forcing organisations to

merge or close

Digital technology will continue to revolutionise the way we fundraise and

communicate with our supporters

Smarter donors who ask more questions and demand greater

transparency from the charity sector

A shortage of appropriately skilled

fundraising professionals will see charities

competing for both staff and donors

More focus on women in philanthropy and their empowerment through their gifts

The rise of the major gift

Greater awareness of and interest in philanthropy

More private funding will be sought as

government money dries up

Social media “slacktivism” will make

it harder to attract financial support for

causes

The rising cost of living will increase the demand

for our service while reducing the disposable

income of our donors

Less reliance on direct mail to engage

with donors

A greater reliance on alternative

funding models and endowment giving

initiatives

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Chapter 4 An OKP Perspective

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Our decision to name 2016, the Year of Perspective, came out of discussions about the impact of the Giving Trends initiative on the third sector. Followers of Giving Trends value the perspective it provides and are enjoying the many benefits of more informed decision making. We have also heard that Giving Trends is being used to support goal-setting and helping to raise the bar for fundraisers across the country. This makes me incredibly proud to support the Giving Trends initiative and play a key role in sharing this valuable resource with a wider audience.

Endowment fundraising might be underrated at the moment, but I don’t think it will be long before its popularity starts to grow. As charitable competition heats up and donor fatigue sets it, the third sector will need to think outside the box when it comes to funding models and donor engagement. Funding endowments is attractive to donors with a long-term view, who like the idea that they can continue to make an impact on their chosen cause or charity well beyond their lifetime. Despite the common misconception, you don’t have to be a large university or hospital to successfully raise an endowment or sacrifice the success of your annual fundraising initiatives to do so. With a strategic approach and a compelling vision, endowment fundraising has the potential to open new doors and inspire greater levels of giving from your most loyal supporters.

Julie Johnson – Managing Director

Brian O’Keefe – Founder

Giving Trends 2016 provides some interesting and very valuable insights for those working in the not–for–profit sector. Here we have asked a few of the experts from O’Keefe and Partners to pick out several key points from the report and reveal what they think it means for their clients and the sector as a whole.

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Sara Bidois – Principal Consultant

I was not greatly surprised to learn that many organisations are experiencing increased income growth from major gifts. For many years at OKP we have been talking to clients about the transformational potential of major gifts. Why take slow and steady steps towards achieving your vision, when you can take a giant leap? That’s not to say that sourcing, securing and nurturing major gifts is easy, but it is achievable for those willing to put in the time and effort required. With the right planning and preparation, including a detailed feasibility study, any organisation, large or small, has the potential to attract significant support for their cause.

O’Keefe & Partners (OKP) is an award-winning agency and

leading provider of solutions for the not for profit, health

& education sectors. It also assists corporations, trustees

and individuals engaged in philanthropy to be more effective

and strategic in their support of the third sector.

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Over a period of 35 years, OKP has built an enviable reputation across Australia and New Zealand and is considered by many as the industry’s most powerful “secret weapon”. OKP has been the driving force behind the philanthropic success of countless organisations from large and complex organisations such as The Salvation Army and Microsoft, to those taking their very first steps.

The team at OKP brings to the table an unparalleled set of experience, knowledge, skill and capabilities. To ensure their client’s success, teams are tailored to each activity, thus ensuring the ultimate united resource. This approach enables OKP to orchestrate practical and sustainable solutions across a broad range of areas including integrated campaign strategy, fundraising development and marketing & communications.

OKP played a key role in the establishment of Giving Trends and is proud to continue its long association with the initiative. The support and guidance provided by OKP ensures the ongoing development of Giving Trends as a valuable and relevant resource for the third sector.

Special Investigation Series

ONLINE

www.okp.com.au.au enquiries@okp.com.

TELEPHONE

1300 721 799

You’ve Got Mail Throughout the years direct mail has remained one of the most popular and effective fundraising methods, but is that all about to change with the advent of online fundraising?

The Three R’s of Fundraising The three R’s of fundraising, regulation, reporting and red-tape, are an unavoidable reality for the third sector. With controversy and debate surrounding the Australian Charities and Not for Profit Commission (ACNC), we wanted to uncover the thoughts and feelings of those working on the ground.

Viva La Volunteers The economic contribution of volunteers in Australia is estimated to be over $20 billion, making our volunteer workface an incredibly valuable asset. Viva La Volunteers looks at volunteering in the third sector and how we are engaging those who support through the gift of time.

To automatically receive these reports along with regular Giving Trends updates, please visit www.okp.com.au and register for Giving Trends updates.

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