Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Smart Giving

By Andrew Leigh - posted Friday, 24 December 2010

With one day to go before Christmas, Australians everywhere are renewing our annual love affair with perfumed bath salts, matching tie-and-handkerchief sets and reindeer earrings.

But this season, why not break the family mould, and turn up with something that’s really going to turn heads around the barbie? In the name of aunt Phyllis, you can buy a chicken that will provide eggs to a family in Papua New Guinea. In honour of cousin Susie, you could pay a school teacher in a Ugandan refugee camp.

For dad, how about a pack of thermal blankets to assist kids sleeping rough in Kalgoorlie? And surely nothing would please grandpa more than knowing that his gift helped cover travel costs for a volunteer to provide business skills to Indigenous people in Wadeye?


As the average household grows increasingly affluent, more families than ever before have the opportunity to use Christmas as a chance to focus on people who are less fortunate. Yet my own analysis of charitable giving statistics suggests that the share of Australians who donate to charity has stayed fairly constant since the late-1970s. Economic growth creates the potential for us to become a more munificent nation - but rising incomes do not automatically translate into greater generosity.

Thanks to the internet, giving wisely is easier than ever before. Donate to a street-corner charity worker, and a good chunk of your money may go into paying their salary. But contribute online, and your hard-earned is more likely to get to where it’s needed. For quirky donation-gifts, it’s hard to beat which claims to have the largest registry in the southern hemisphere.

Locally, many charities are still running appeals for money and gifts for needy Australians. In my electorate, Gordon Ramsey of Kippax UnitingCare told me the story last week of a single mother with 3 children under the age of 10, who had lost all her children’s presents when floodwaters lapped around the base of her Christmas tree. When told that the charity could provide some new gifts, tears of relief rolled down her face.

But if you don’t have personal experience with a charity, how can you ensure that your gift goes where it will do the most good? Unfortunately, there are large disparities in effectiveness across charities, from those that rigorously focus their efforts on the neediest to organisations that aim to enrich their founders.

As Nicholas Kristof recently pointed out in the New York Times, rating charities is no easy business. A charity with a low ratio of administrative costs to total spending may be efficient - or it could just be underpaying its staff. A more useful guide is the share of the budget spent on fundraising. For example, the American Institute of Philanthropy (AIP) suggests that charities should not spend more than $25 to raise $100 in public support. The Institute also considers charities’ willingness to operate transparently, and marks down philanthropic bodies that hold excessive assets. In the most egregious cases, the AIP gives charities a grade of ‘F’.

Another major player in the US,, looks at trends over time. Charities that are growing are marked up. Those that run a consistent deficit are rated down.  Like the AIP, CharityNavigator focuses primarily on a charity’s organisational effectiveness.


However, because charities can be streamlined but misguided, my favourite US charity-rating agency is, which looks for evidence of program effectiveness and regular evaluation. GiveWell’s top-rated international charities are Village Reach and Stop TB (both global health charities), while its preferred US charities are the Nurse Family Partnership (early childhood intervention) and KIPP (school education).

If I could have a Christmas wish for the Australian philanthropic sector, it would be to see the development of our own charity-rating bodies that matched the depth and rigour of their US counterparts. Looking at the existing guides and websites that compile information about the Australian charitable sector, I get the sense that our raters need to be willing to ruffle a few more feathers in their search for the golden egg.

Yet don’t let the search for the perfect put you off doing good this season. There’s an outdoor toilet in Pakistan just waiting to be built in the name of uncle Albert. Just wait until you see the look on his face when he learns you’ve bought it for him.

  1. Pages:
  2. Page 1
  3. All

This article was originally published in the Australian Financial Review on 21 December 2010.

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

9 posts so far.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

Other articles by this Author

All articles by Andrew Leigh

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Andrew Leigh
Article Tools
Comment 9 comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy