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Australia’s wealthiest families are favouring a new approach to philanthropy — one that requires deep, strategic thinking — to create much-needed change and leave a lasting legacy.
AUSTRALIA IS EXPERIENCING a major shift in how our wealthy families choose to give. Instead of donating to a multitude of charities because it’s a nice thing to do, more and more are choosing to focus their donations on select causes, using their money, ideas and strategic partners to address some of our most intractable, long-term social and environmental problems.
It’s a positive change with potentially huge benefits. Although charitable donations that offer an immediate fix play a key role in our society’s wellbeing, more targeted, strategic giving that addresses the root cause of systemic issues will give us greater hope for the future.
Philanthropy comprises just 7% of overall charity income in Australia, but its propensity to take risks, advocate for change and champion new ideas mean it punches well above its weight, often providing the necessary inspiration and impetus to help build a genuinely better Australia.
The emergence of a new, more engaged philanthropy is not surprising. Back in 2001, the federal government introduced private ancillary funds, a tax-effective investment vehicle that allows people to better structure their giving. High-profile philanthropists such as Bill Gates have also shown us what can be achieved, at a time when many of us are concerned about our society and environment, and want to do something about it.
In Australia, several philanthropists are helping to change our idea of giving — not just because of the size of their contributions, but because of the public, targeted way they choose to go about it.
The Paul Ramsay Foundation aims to support promising ideas and methods, scalable innovation and leadership that helps people and organisations adapt and thrive. It has put considerable money and effort into attempting to break the cycles of disadvantage in Australia, committing more than $600 million in grants since 2016. It took out the top spot on The Australian Financial Review Philanthropy 50 list for 2020–21, a compilation of Australia’s top personal givers compiled by JBWere since its inception in 2016.
The foundation’s recent Learning Lives, Strengthened in Culture initiative works with six Indigenous-led partner organisations to enable more Aboriginal and Torres Strait Islander children to reach their academic potential. The Aurora Education Foundation, for example, will receive almost $10 million over five years to further its work in providing individualised learning programs for Indigenous high school students.
Meanwhile, Andrew and Nicola Forrest’s Minderoo Foundation focuses on a range of issues, including protecting the environment, arts and culture and building communities. Its international human rights arm, Walk Free, aims to eradicate modern slavery practices by “integrating world-class research with direct engagement with some of the world’s most influential government, business and religious leaders”. Its achievements to date include successfully campaigning for a national Modern Slavery Act in Australia, as well as publishing four editions of the Global Slavery Index — a country-by-country ranking of the number of people in modern slavery, including in the hardest-to-access countries.
As Walk Free notes, “you can’t solve a problem if you can’t measure it”.
In April this year, trucking magnate Lindsay Fox and his family donated $100 million to the National Gallery of Victoria to help fund a new contemporary gallery — the largest cultural gift for a capital program made to an Australian museum by a living donor.
START BY PINPOINTING WHAT’S IMPORTANT TO YOU AND YOUR FAMILY. ASK YOURSELF WHAT YOU WANT TO ACHIEVE. WHAT IS THE LEGACY YOU WANT TO LEAVE?
While such foundations support varied causes, what they share in common is a highly analytical approach. They assess the scope of their causes and ask: “What are we actually able to change?” and “Which partners would be the most effective?”
They also invest heavily in partnerships, both with individuals and organisations, to gain the all-important insights and expertise they need — as well as the capital.
The Ian Potter Foundation and the Myer Foundation came together in 2017 to create an independent national policy centre for water, recognising that Australia needed long-term thinking behind our water supply issues. The two foundations researched and formulated the idea, then brought several other philanthropic funders on board to help realise their vision.
It’s clear that such groups are also prepared to put up risk capital in the hope of nurturing social innovation. In fact, all of these foundations are willing to take risks and fail. Their potential reward is a solution that can be scaled up by governments and help change our society for the better.
Yet, at the same time, they take a highly businesslike approach, in which each decision is analysed to allow for the best possible returns — in this case the biggest social or environmental impact.
Creating a vision
For those of us at the beginning of our philanthropic journey, it’s worth noting that none of these foundations would exist without the highly personal vision behind them. That’s why it’s critical to start by pinpointing what’s important to you and your family. Ask yourself what you want to achieve. What is the legacy you want to leave? The clearer you are on where you want to head as a family, the better chance you have of meeting and sustaining your goals through the generations.
Even if your family does have a shared vision, there’s every chance you won’t know the particular causes you wish to support first off. Indeed, you may even find you change them over time. Some of the top foundations have certainly done so.
It’s a good reason to start wide: to get to know the field, understand the issues, familiarise yourself with the people who are influential in your area. You’ll also want to keep things in perspective. The fact is, you’re not going make an impact from day one. But by following best practice, you’ll be well on your way to helping make the positive change you hope to see.
Where to next?
The Productivity Commission says Australia is likely to see the transfer of $3.5 trillion in intergenerational wealth over the next two decades. The hope is that a large portion of this will be harnessed for philanthropy — supercharging giving in Australia.
Australia’s Biggest Givers
Source: The Australian Financial Review Philanthropy 50 list for 2020–21.
The information contained in this article is gathered from multiple sources believed to be reliable as of the end of April 2022 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 (NAB) recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.
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