Something is shifting in Australian philanthropy. The total amount of charitable giving has grown, but the way it’s distributed, the vehicles being used, and the expectations of donors are all changing in ways that have significant implications for nonprofits.

I’ve been tracking these trends for several years, and five stand out as particularly important for organisations that depend on philanthropic funding.

1. The rise of donor-advised funds

Donor-advised funds (DAFs) have grown rapidly in Australia over the past few years. A DAF is essentially a charitable giving account: a donor makes a tax-deductible contribution to the fund, then recommends grants to specific charities over time.

For donors, DAFs offer flexibility and simplicity. They get the tax deduction immediately but can distribute the money over multiple years. For some, it’s a way to smooth out their giving — make a large contribution in a high-income year and distribute it gradually.

For nonprofits, DAFs create uncertainty. The money sits in the fund until the donor recommends a grant, and there’s no obligation to distribute within a specific timeframe. This means billions of dollars are sitting in DAFs that have received tax deductions but haven’t yet reached charitable organisations.

The debate about whether DAFs should have minimum distribution requirements is heating up in Australia, and I expect we’ll see policy action on this in the next few years.

2. Trust-based philanthropy is gaining ground

The trust-based philanthropy movement argues that the traditional power dynamics between funders and grantees are counterproductive. Instead of detailed applications, onerous reporting requirements, and restricted grants, trust-based philanthropy advocates for unrestricted funding, simplified processes, and genuine partnership.

Several major Australian foundations have adopted trust-based principles. The Paul Ramsay Foundation, for example, has moved toward longer-term, less restrictive funding models. The Ian Potter Foundation has simplified its application processes.

For nonprofits, this is mostly good news. Unrestricted funding is more useful than restricted project grants because it allows organisations to spend money where it’s most needed. Simplified reporting reduces the administrative burden that diverts resources from mission delivery.

But trust-based philanthropy requires trust, which means it tends to favour established organisations with strong reputations. Smaller or newer nonprofits may find it harder to access funding when the emphasis is on relationships rather than competitive applications.

3. Impact expectations are rising

Donors — particularly high-net-worth donors and institutional funders — increasingly want to know what their money achieved. Not just how it was spent, but what outcomes it produced. This is part of the broader impact measurement trend, but it has specific implications for philanthropy.

Organisations that can demonstrate clear evidence of impact are finding it easier to attract funding. Those that can’t are struggling. This is creating a two-tier system where well-resourced organisations that can invest in evaluation and reporting attract more funding, while smaller organisations that lack evaluation capacity fall behind.

The response from the sector has been mixed. Some organisations have genuinely improved their impact measurement. Others have simply gotten better at presenting their activities as outcomes. And some funders are becoming more sophisticated about distinguishing between the two.

4. Giving circles and collective philanthropy

Giving circles — where groups of people pool their donations and collectively decide which organisations to fund — have grown significantly in Australia. They’re particularly popular among younger donors and women.

Models like the Australian Women Donors Network and various community-based giving circles allow people to give more collectively than they would individually. They also provide a social element to giving that appeals to donors who want to be more engaged than simply writing a cheque.

For nonprofits, giving circles can be valuable sources of funding and advocacy. But they also require a different engagement approach than traditional major donor cultivation. You’re not selling to one person; you’re presenting to a group that makes collective decisions.

5. The next generation gives differently

The intergenerational transfer of wealth in Australia — estimated at hundreds of billions of dollars over the coming decades — is going to reshape philanthropy fundamentally. But the next generation of wealthy Australians doesn’t give the same way their parents did.

Younger donors tend to be more issue-focused than institution-loyal. They’re more interested in systems change than service delivery. They want to be engaged in the work, not just receive updates. And they’re more likely to use giving vehicles like DAFs and impact investments rather than traditional annual donations.

For nonprofits, this means rethinking how they engage donors. The annual gala and the personalised letter from the CEO aren’t going to cut it for a generation that expects transparency, engagement, and evidence.

What this means for nonprofits

The common thread through all five trends is that the relationship between donors and nonprofits is becoming more complex and more demanding. Donors want more information, more engagement, and more evidence of impact. The vehicles for giving are multiplying. And the expectations are rising.

Nonprofits that adapt to these changes — by investing in impact measurement, simplifying their donor engagement, diversifying their funding sources, and building genuine relationships with the next generation of givers — will thrive. Those that don’t will find themselves competing for a shrinking pool of traditional philanthropic dollars.

The age of “give us money and trust us” is ending. What replaces it is still being negotiated.