How do you decide on what charity to donate to?
The last 12 months has seen two major events to affect Australia and the world. The first was the bushfires experienced throughout Australia between November 2019 and February 2020, the second is a global health pandemic, COVID-19. Both incidents got people saying “How can I help?”, with many answering by donating food, equipment or materials or their expertise in the case of COVID. In the case of the bushfires, this soon became difficult to manage the logistics of moving everything around to where it needed to go. The focus then moved to donating money to the charities that could help. Many people started to ask, “What charity should I donate to?”. We have built a tool that can help you answer this question, whether its for the Bushfires, COVID-19, animal welfare, the homeless or any other valuable cause you feel the need to support. We use the bushfires to walk through our decision making process.
Who should we donate to, for fire relief?
On 12 November 2019, a catastrophic fire danger was declared in the Greater Sydney region for the first time, with other regions experiencing catastrophic fire dangers soon after. At its peak, there were over 100 fires burning across NSW alone, with every state and territory experiencing significant bushfires.
As of 9 March 2020, 18.6 Million hectares (46 M acres) had been burnt, 2779 homes destroyed and 34 lives have been lost, many of whom were volunteer fire fighters serving their local communities.
Just to try and make the point, here are some stats relating to the total fire area, to a number of countries. 186,360 km2 of Australia has been burnt by the fires, 2.4% of the whole country. This is also 143% the size of England, 76.85% of the UK, and almost 2% of the USA or mainland Europe.
With this unprecedented scale and intensity of bushfires, we wanted to figure out which organisation to best donate to, for fire relief. We decided to use data science to analyse the data to figure out which charity would fit Lynxx best. We sought to answer three main questions that will be relevant for anyone wanting to donate. You may have additional questions you want answered to help you find the right organisation. The 3 questions we answered were:
1. What is the main cause we want to support;
2. Where do we want to focus our donation; and
3. How much of our donation dollar will go directly to the cause?
To answer these questions, we need some data.
The Australian Government hosts open data for a number of sectors, one of which is the Australian Charities and Non Profit Commission (ACNC). Charities that wish to access government funding and tax concessions are required to register with ACNC. As part of the registration, the charities lodge an annual information statement that ACNC make available to the public. These statements are used to create a database of financial information for each registered charity.
In 2018, there were 47,301 registered charities, all advocating different activities from legal services, sport, and religious activities, to animal protection, domestic abuse and emergency relief.
Now let’s answer our questions:
1. What is the main cause we want to support?
We have already expressed that we would like to support the fire relief efforts. There is no Fire relief category that charities focus their attention on; the closest activity available is Emergency Relief. We can use this to filter the data set based on the charities’ main activity, which leaves us with 1364 charities of varying sizes.
I will note that the Australian Red Cross does not appear in this list as their main charitable focus is on social services.
We can see that there are a lot of small charities (annual revenue less than $250,000) with some medium (annual revenue between $250,000 — $1 million) and a few large charities (revenue greater than $1 million). Most of the emergency relief income is received by charities operating in NSW and QLD; this is to be expected as this is where the majority of Australia’s population lives.
2. Where do we want to focus our donation?
This question has two parts, a) Do we want to support communities, individuals or animals? And b) do we want to focus our donation on a national, state, community or individual level?
We could choose to support an individual affected by the fires, like some of the families that have lost family members fighting fires (like Geoffrey Keaton, Andre O’Dwyer and Samuel McPaul), one of the local communities affected or the whole state or country.
We have decided to focus our donation on the charities in local NSW communities affected by the fires. So, we can likely assume that the relevant charities will be small, or maybe medium size charities. This leaves us with 285 charities.
We can see that most of the income the small or medium NSW emergency relief charities receive is from donations and goods and services.
3. How much of our donation dollar will go directly to the cause?
We can answer this question in several ways, by looking at how much money goes to expenses to run the organisation or a comparison of donations in, to expenses out. We could even look more broadly at the total income and expenses to see how much money is left over, making sure that this money is at least donated. We have decided to keep it simple and make a comparison between the donations received and the donations made for use within Australia. The donations received is the money that the public donates to the charity, the donations made for use in Australia is the donations the charity hands out within Australia. For some charities, this will be greater than 100% because the income is not only from donations received. By limiting the charities that donate at least 90% of the donations received, we filter our list down to 33 charities to focus on.
There are a number of charities that don’t really fit with our intentions of supporting the bushfire appeal, such as Charlies Run 4 Kids, which is focused on one family who lost a child due to Neuroblastoma. So, we will need to look at the remaining charities individually. Looking through the list of charities left, many seem to focus on community support, but are not specifically related to fire relief. There are two charities that specifically relate to supporting communities affected by the bush fires, The Trustee for NSW Rural Fire Service and Brigades Donations Fund (NSW Rural Fire Service) and Employees New South Wales Fire Brigades Relief and Welfare Fund Inc (Employees Relief and Welfare Fund). The NSW Rural Fire Service support the volunteers and brigades fighting the fires, the Employees Relief and Welfare fund supports the individual volunteers and employees when they need support.
This analysis was performed on 2018 ACNC data and does not include online campaigns such as those offered through GoFundMe, Givit or Facebook, like Celeste Barber’s enormously successful fundraiser. These campaigns are typically specific in what they support and are only active while the activity being supported is in the public focus. It is also difficult to determine how much of the donations actually go to the intended use, as the donations can be spread across a number of charities. In addition, as noted previously, large well-known charities like the Red Cross were excluded from this analysis because their main activity is for social services. It must be noted that some of these large international charity organisations set up specific campaigns for such large disasters. We would encourage anyone to ask the same questions when donating to these campaigns, to ensure that the maximum amount of money goes to the right people and cause.
Based on this analysis we have decided to donate our money to the NSW Rural Fire Service to support the men and women on the front line of these fires. We encourage you to find the right organisation for you to donate to as well.
If you want to find out which charity best suits your preferences, check out the Charity Chooser app.