Let’s Talk About Giving in Australia

Let’s Talk About Giving in Australia

“Liverpool man who inherited £100,000 lets 12 strangers give the money away.”

This headline in The Guardian grabbed my attention.  It told the story of David Clarke, who inherited £100,000 from his mother and gave it all away to charities in his home town of Liverpool.  Keen to do something to tackle inequality, he worked out that he had enough to live on without the inheritance and, through a consultation process, gave his neighbours and local community residents the power to decide what to do with the money. It came down to a group of 12 who researched local organisations in the area and came up with a list of four charities who each received £25,000. This is giving while you live in action.

Clarke has set up a website, Wealth Share, to publish the results of his project and encourage others to share their wealth wisely. He talks of ‘democratising wealth.’

This is a great example of philanthropic role modelling, something that Peter Winneke champions in his excellent book, Give While You LivePeter Winneke is a generosity and life legacy adviser, was the inaugural CEO of Australia’s largest grant-making family foundation and former head of the Myer Family Company’s philanthropic services.

He is calling for cultural change in the philanthropic sector in Australia to boost and enhance giving, particularly by High Net Worth Individuals (HNWIs).  In his work with wealthy families Winneke encourages them to calculate what they need to maintain their lifestyle, how much to leave their children and then how much is leftover – the surplus – which can then more easily be directed for community benefit.  He also talks about the importance of instilling in the next generation an ethos of caring and giving, and the educational benefits of a family coming together to develop a family foundation – from developing the strategy to measuring the outcomes.

Giving in Australia is in its infancy compared to the US where generations of wealth have created a much more developed culture; most of the wealth in Australia has been created in recent decades, and, with higher rates of income tax, we have relied more on government to fix issues in the community. Moreover, in the US, sharing your wealth and leading by example is not frowned upon whereas Australia suffers (badly) from Tall Poppy Syndrome. One of Winneke’s heroes is Irish American businessman and philanthropist, Chuck Feeney, founder of The Atlantic Philanthropies (AP) who summed up his mission as: “I see little reason to delay giving when so much good can be achieved through supporting worthwhile causes. Besides, it’s a lot more fun to give while you live than while you’re dead!”

The research and stats in the chapter on Australia’s Giving Culture indicate that despite wealth increasing, giving levels by HNWIs remain low. For example, nearly all those listed on the Australian Financial Review’s Rich List and Philanthropy 50 are giving small percentages of their net wealth. Plus, twenty years on from the establishment of Private Ancillary Funds (PAFs), they still number only 2060 even though Credit Suisse advises that there are a staggering 58,000 Australians with wealth around $10 million. There is definitely room for growth in giving in Australia! Especially given the estimated intergenerational wealth transfer of $3.5 trillion over the next two decades (Productivity Commission).

Give While You Live is an insightful and thorough critique of all aspects of philanthropic giving in Australia with tips on best practice for families, foundation CEOs, philanthropy advisers, wealth advisers and fundraisers. And Winneke is not afraid to tackle some of the trickier topics and barriers to growing giving including:

The lack of transparency around giving in Australia – as well as a call for philanthropists/wealthy families to inspire others and talk publicly about their giving through role modelling, he also argues that PAFs should lose their privacy status. While PAFS are required to report to the ATO and the Australian Charities and Not-for-profits Commission (ANCN),  they can choose to withhold personal information from the ACNC’s charities register.

The power imbalance between funder and grant recipients – he advocates for greater trust in funder/grant recipient relationships and for greater humility among funders as they don’t have all the answers to the issues in the community.  “A foundation can only achieve its goals if it has talented partners working on the ground.” Hear, hear I say.

Ethics: does philanthropy undermine democracy – and how was the wealth created? The tensions around using private money to achieve public ends and the power of private money to influence social policy were topics recently explored by Glyn Davis AC, Secretary to the Dept of Prime Minister and Cabinet, in the recent Kenneth Myer Lecture. Some of the late 19th Century philanthropists in the US, the wealthy industrialists such as Carnegie, attracted criticism from those who argued that their wealth creation perpetuated the inequity that allowed such huge to wealth to accumulate in the first place. As a more recent example, he cited the Chan/Zuckerberg initiative – some maintain that Facebook is creating more problems than it sets out to solve.

Failure by foundations to fund overheads: this is one of my biggest bugbears but I’ve recently pledged my support to reframeoverhead.org . Check out their website for a downloadable guide for NFPS on how to use key facts and language to reframe overheads for funders and donors.

Short-term funding and a scattergun approach – quite rightly, Winneke argues that funding projects for one to three years is basically funders telling organisations, the experts in their field, that they need to solve problems in one to three years. Short term funding along with onerous application forms and reporting requirements creates inefficiencies especially when funders are giving out many small grants rather than fewer, larger ones.  A better plan is to let fundraisers get on with the job of delivering on their mission by  simplifying the process and awarding unrestricted long term funding.

Other factors he covers are the lack of lived experience and specialist knowledge among funders and decision-makers, foundation CEOs remaining too long in their roles, the lack of opportunity for charities to give frank feedback to donors/funders, and the lack of self-evaluation by funders around their impact.

Balanced against this exposé of what is not working are inspiring examples of funders and foundations leading the way through collaboration, leveraging their networks, providing long-term funding, engaging with organisations, advocating for social and policy change, funding overheads and evaluating their  impact. He includes 35 Case Studies of Australian and international organisations that demonstrate best practice in action.

But there is a long way to go! Giving rates across the board are low in Australia – Winneke cites research showing that across all individual Australian tax payers on average we only donate 0.4% of our assessable income.

He concedes it’s tough being a fundraiser in Australia – we’re all competing with the other 59,999 charities!  But he quotes Beth Breeze (Director of the Centre for Philanthropy at the University of Kent) on making miracles happen. “The passion I feel about what I do is because I’m giving someone with money the opportunity to do the best thing they’ve done all year, or all decade – or ever.”  Just today, I shared this quote with a client who was feeling shy about engaging with a funder. Fundraisers are a vital part of the philanthropic ecosystem and  can play an important part in changing the giving culture, by speaking up and pushing back against outdated funding models. This book is a clear call to action and practical guide for all those keen to grow more and better giving in Australia. A must-read.

To find out more and to order a copy of Peter Winneke’s book go to: http://www.givewhileyoulive.com.au