Living & giving

We have more charities than any other country - and most of us are turned off by the constant pressure to donate. Edward Rooney sketches the new face of fundraising.
Olivia knew straight away she needed to do something for the poor kids the moment the 4-year-old saw their awful plight on TV. "I saw all their dirty water and I thought I'd like to help them. So we decided to buy a cow and I had a toy sale and a cake sale."
Now aged 7, the Mt Albert girl's recollection differs slightly from her mum's: "The World Vision ad talked about 17,000 children dying each day and Olivia asked us if we could sponsor all the children," says Gail Burgess.
The Burgess family was already sponsoring children through World Vision schemes, so Olivia's parents suggested she fundraise for an animal to give to a poor family. "We were hoping she'd choose a chicken," says Gail.
"It's an important part of our family culture, so when Olivia starting talking about it, I  helped her get started. It is easy to ignore it when children say things like this, but they will follow it through once you show them ways."
The final tally of Olivia's fundraising efforts came to $446, enough to buy a cow and three piglets. Gail: "People were touched by such a simple idea. One friend even sent money from Canada. Another in Australia made some bags for Olivia to sell at her stall."
Olivia's efforts went into a massive charitable fund. The top 10 charities in Auckland pulled in almost $112 million in donations, or koha, in the last financial year. The biggest earners by far are Olivia's friends at the World Vision of New Zealand Trust Board with a total of $47 million.
Other top charities are The Evangelical Alliance Relief (TEAR) Fund with $9.5 million and Auckland Regional Rescue Helicopter Trust, $5.3 million.
Prompting people like Olivia to raise money and donate it is big business indeed - estimated to be a $1 billion industry in New Zealand.
Kiwis have the highest ratio of charities per person in the world. By the latest estimates, there is one charity for every 172 of us. The next highest ratio is the UK with 1:297.
But change is afoot at the places where your dollar goes after it's dropped in a bucket on Main St. In an effort to beat "charity fatigue", a stagnant amount of money and rising charity causes, charities are joining others with similar aims to work as group concerns.
In Auckland, 38 groups are now registered with the Charities Commission as sharing common charitable purposes and rules. The largest local cluster is the Roman Catholic Diocese of Auckland Group, which has income and assets worth $793 million. Others include The Selwyn Foundation Group (around $250 million) and Sisters of Mercy Ministries ($133 million). Members of these groups are clearly bound by common, religious-based values.
Recently, the Auckland Communities Foundation head, Mark Bentley, completed MBA research into methods of encouraging charities to work together to overcome unnecessary competition and duplication of activity.
His foundation, set up in 2010, is a charitable trust that aims to match generous individuals and organisations with worthy causes.
"There are currently about 24,000 charities in New Zealand," he says. "There's something in our psyche that, when we get passionate about something, we want to set up a charity. With so many charities, there's potential for duplication and working across the same areas, competing for the same money, the same jobs and the same locations.
"Our paper explores the options so we don't get that overlay. There's lots of work being done currently on collaboration, but I've been looking at how it can be incentivised. This is part of a global scene of what's happening in the not-for-profit, charitable area.
Research shows the demand for shared responses to social problems is rising as governments withdraw from their role in solving society's problems.
Other reasons for charities to share efforts include: being able to get involved in new issues without having sole responsibility; ability to show widespread attention on an issue; creation of "critical mass" behind an effort; mobilisation of talent and resources; recruitment of helpers from diverse groups.
However, there could be downsides. A common criticism of collaborations is a tendency to focus on the positives while overlooking actual costs. As well, there's also the potential loss of autonomy, the expending of scarce resources, time commitments and shared leadership problems.
Mr Bentley says the UK Charity Commission found only 5 per cent of charities involved in collaborations felt the arrangement wasn't beneficial. He says the main "flashpoints" for failure were: breakdown in communications (29 per cent); lack of clarity in relationships (18 per cent); lack of initiative in partner charities (18 per cent).
The UK commission now has a dedicated "mergers unit" to encourage and assist charities to get together.
For his New Zealand research, Mr Bentley asked the chief executives of major charities and leaders of 10 private foundations for their views on how to encourage charities to work together. "The response we got back was nine incentives and, surprisingly, only four were financial, so the majority are non-financial.
"There are some things at the moment about the relationship between Government and the philanthropic sector that appears to encourage duplication for competitive funding. By giving small grants, it's effectively survival of the unfittest.
"We've got to take a pretty hard look at ourselves, and how we can improve things. By collaborating, it's not so much more efficient, it's more effective; that's if you're doing it right.
So what difference would the person dropping a coin in a collector's bucket notice?
Professor Tim Hazledine of the University of Auckland Business School says the question the public should ask is: why would charities want to collaborate?
"It could be the main concern is reducing transaction costs for the charities involved. It may be that is the only justification for combining forces.
"Anything that means more dollars get from the buckets to where they're needed is a good thing. But I see a danger that, to the extent that people like to choose where their money goes, they might contribute less to an amalgamated fundraising drive - ie., fewer dollars going into the bucket."
David Bishop, a Professional Practice Fellow at the University of Otago doing a PhD thesis on not-for-profit organisations, says change is necessary in the charitable sector.
Fundraising has been hit by a number of factors in recent years, including the increasing number of charities; fewer people willing to collect; a static population; increasing collection costs; and increasing public scrutiny of the bona fides of non-profit groups.
"The competitive pressure for funding via the Government and its agencies and commercial sponsors is also increasing as the available pool of funds generally remains static but the number of organisations seeking funding increases."
Past research suggests most people who drop coins into collection buckets may already have personal lists of their favourite causes. "As the number of causes has increased, it seems that the public has become even 'harder'. Where they might have tossed a coin into a bucket rather than ignore the smile of a collector in the past, they now just walk on by.
"There are too many causes looking for funds. What's more, it is getting harder to find people willing to collect, simply because the demands for such volunteers have been overwhelming."
Non-profit groups are waking up to the need to align with a good "brand", he says, displaying characteristics that make people more likely to donate.
As well as that increasing awareness, groups who spoke with Mr Bentley also pointed to an ability to focus energy through collaborations. Another benefit cited includes shared education to pick up each other's best practices and, ultimately, societal good.
Considering the sense of satisfaction already for people like Olivia and her family, any further benefits are bonuses.
Lost causes?
In a survey last year, the Charities Commission explored people's motivations for donating to causes. Typical comments from the Insight Report into Public Trust & Confidence included:
"There's so many of the charities doing the same thing these days."
"Most people are struggling with charity fatigue."
"You can't turn on the TV these days without seeing one of the big charities advertising."
"They're always there, even in the pub. Always in your face."