02/06/2015 - 04:59

Tough times challenge generosity

02/06/2015 - 04:59


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Charities may find 2015 is the big test for their fundraising abilities.

Charities may find 2015 is the big test for their fundraising abilities.

LAST year was definitely great for the top Western Australian charities in terms of raising funds for their causes.

We published the list last week, but I thought it was worth doing some further analysis of the results. Revenue is the best measure for this sector because, as not for profits, those operating in it are focused on spending what they have.

Of the largest players that have provided figures for the 2014 financial or calendar years, the majority grew their revenue significantly compared with the previous corresponding year.

Average revenue for this group was more than $33 million, up around 10 per cent.

Of course there were some outliers.

It is worth noting that there is a bit of double counting in this because the Channel 7 Telethon Trust is a pure fundraising vehicle, which pretty much donates all it raises straight away to a long list of charities, starting with the Telethon Kids Institute, which receives about half of what is raised in Telethon-associated events).

Apart from the institute, other big lumps are mainly directed at children’s health. For example, significant funds are also given to fundraising enterprises related to Princess Margaret Hospital, the near complete New Children’s Hospital, and Joondalup Hospital’s paediatric service. Other big recipients were Community Cinemas (which in turn raises money for kids in a health or physical crisis), the Lions Eye Institute, and Youth Focus.

The Cancer Council of WA was one major charitable group that went backwards in 2014 in terms of revenue. Looking at its accounts, it appears bequests dropped from $5.5 million to $2.7 million; otherwise it looked fairly stable.

The most interesting follow up to this will be what happens next year. Anecdotally, charities are bracing for something of a double whammy – a fall in revenue as the economy slides and generosity loses out to expediency while, at the same time, demand for services in some areas such as homelessness rises.

That will be a challenge; fortunately there are some great business leadership on these leading charity boards.

Going to the dogs

A FEW years ago, our dog was run over and well-meaning members of the family rushed it off to an emergency facility.

While an endangered limb was ultimately saved, the incident cost us an arm and a leg. After we eventually extracted our pet from this facility we discovered that our local vet could have handled things more efficiently for much less costs had the accident occurred in normal working hours. Asking around I found numerous others who’ve had similar and much worse experiences.

It appears that there is a strong correlation between the increased ‘humanising’ of animals and the willingness of owners (can we still call them that?) to part with dollars for their pets, including health care.

This, along with expensive horror stories, has led to the rise of pet insurance. I am certain it’s a catch-22 situation, i.e. more people take out pet insurance, the cost of pet health care rises as a result, prompting the need for insurance.

So whether or not you believe this is a good outcome for the animal-loving side of society, the cynical investor in me asks how to gain exposure to this phenomenon? Enter the IPO of Greenstone, which is big in the pet insurance business, either directly or through affiliations with groups like the RSPCA.

According to Greenstone’s prospectus, its associate, PetSure, had 230,000 policies last year, about 80 per cent of a market worth more than $200 million, but barely scratching Australia’s total 7.5 million domestic dogs and cats.

Cumulative average growth has been a whopping 48.4 per cent from 2009.


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