GIVE AND TAKE 20 THE AFR MAGAZINE MAY

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1 GIVE AND TAKE Two cultures are emerging in the donation landscape. Some names on the AFR Magazine Philanthropy 50 list bestow money quietly without strings attached. And some are proactive one hand is in their pocket, the other is beckoning more wealthy Australians to join them. Story JEMIMA WHYTE Photo illustration SAM BENNETT 20 THE AFR MAGAZINE MAY

2 The conversation at every good dinner party eventually turns to idle gossip. For one regular supper group, it s an agenda item. Four times a year, a small group of foundation chiefs and trustees meet for dinner sometimes in Sydney, sometimes in Melbourne. An agenda is circulated beforehand, and always, right at the bottom, is the last item for discussion: gossip. I m always worried about what I don t know, says Leonard Vary, the chief executive of the Sidney Myer Fund and The Myer. What makes this gossip particularly valuable is the make up of the guest lists: some of the Australian philanthropy sector s best connectors. These are the people who give millions and raise millions and spend their time trying to work out how to maximise each dollar s impact. The once discreet business of giving away a slice of one s wealth is gaining scale, making networking more important than ever. Knowing who s who in the zoo makes all the difference in finding the right person to fill that spare seat on the foundation board, or how to go direct to the potential donor who s most interested in the fight against muscular dystrophy, or baroque opera. Vary, a former legal counsel at Linfox, borrowed the regular dinner party idea from James Canales, the president of the Boston-based Barr. It s one of many ideas that have crossed the Pacific. A pervasive trend, as Australia hones its own style of mega-giving and grant-making, is the influence of foundations in the United States. Another suggestion Canales made to Vary is the benefit of commissioning academic research, for example to interrogate if money is being deployed in the best direction. In the US there are academics who study philanthropy as an entire field. The new generation of philanthropists is more demanding and professional, says David Gonski, a long-time promoter of philanthropy who also chairs the Art Gallery of NSW and is chancellor at the University of NSW. When they give money, they no longer give for a general purpose. They set out and expect certain outcomes. There are two cultures emerging in the donation landscape. One talks of partnering rather than giving; these givers have an entrepreneurial bent and like being hands-on. The other sees the role of the philanthropist to give money, but not to necessarily offer advice. Some in this latter camp call themselves philanthrocrats echoing bureaucratic professionalism, and perhaps a touch of aristocracy. The former talks of measuring success, the latter takes a measured approach. In 2014, The Australian Financial Review Magazine found that Australian philanthropy had reached a watershed moment: within the previous 18 months, five gifts in excess of $50 million had been announced, each with the donor s name proudly attached. A year ago we published the inaugural Philanthropy 50, marking the first time data of who was giving the most had been compiled. This year s list shows a drop in the total amount given compared with last year from $470 million to $459 million. However, the 2016 figures were pumped up by a large number of bequests. Excluding those one-off bequests, the amount given rose from $403 million in 2016 to $455 million in Helping to map out the philanthropy ecosystem is Philanthropy Australia, which is compiling a digital map of grants. The peak industry group has also upped its focus on running forums for philanthropists to connect with one another. It used to be that everyone did their own [projects]; now that there s acceptance to get these bigger projects over 1 Paul Ramsay $83.1 million Cause: Health and education innovation and growing sector capacity. 2 Ian Potter $35.4 million Cause: The arts, community wellbeing, education, environment, health and disability, medical research and science. 3 Graham and Louise Tuckwell $30 million Cause: Education, part of $150 million for scholarships and residences at the Australian National University. 4 Minderoo $18.7 million Cause: Cancer collaboration, Indigenous disadvantage, early childhood development, higher education research, community services; ending modern slavery. 5 Lowy $18 million Cause: Medical research, Lowy Institute international policy, Sydney Modern project at the Art Galley of NSW. 6 Kinghorn $15 million Cause: Medical research, poverty, Australian youth. 7 Susan & Isaac Wakil $14.7 million Cause: Part of $60 million for health and nursing at the University of Sydney; Sydney Modern at the Art Gallery of NSW; Opera Australia. 8 Myer and Sidney Myer Fund $13.3 million Cause: Arts and humanities, education, poverty and disadvantage, sustainability and the environment. 9 Packer Family foundations $10.3 mllion Cause: Health, education, welfare and culture. 10 Clive Berghofer $10 million Cause: Part of a $50.1 million grant to the QIMR Berghofer Medical Research Institute. 11 Gandel Philanthropy $10 million Cause: Arts and culture, education, health and medical research, community disadvantage, youth at risk, Jewish identity and leadership, Indigenous issues. 12 Neilson $9.1 million Cause: Arts and culture particularly around accessibility, vulnerable youth, migrant populations, domestic violence, mental health. 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3 AFR Magazine / JBWere. T H E PHI L A N T H ROPY 50 FOR 2 016/ Vincent Fairfax Family Hansen Little $6.5 million $8.8 million Cause: Part of $10 million to University of Melbourne Cause: Disadvantaged young people, rural and regional arts faculty (history); State Library of Victoria; communities and a spiritually rich society. Melbourne Theatre Company Sylvia and Charles Viertel Charitable Baker $8.5 million Cause: Mainly medical research plus a variety of other Cause: Health and medical research. causes Pratt foundations Greg Poche and Kay Van Norton Poche $7.6 million Cause: Mental health, the arts, education, cancer care, $6.4 million $6 million Jewish life, Aboriginal advancement, the environment. Cause: Grants to Indigenous health centres Barry and Joy Lambert Michael Buxton $7.6 million $5.8 million Cause: Medicinal cannabis research at the University of Cause: Part of $25 million for artworks and endowment Sydney (part of $33.7 million) and Thomas Jefferson fund for Buxton Contemporary at the University of University (part of US$3 million). Melbourne Ainsworth family McCusker Charitable $7.4 million $5.5 million Cause: Children, health, medical research, engineering Cause: Charities through Channel 7 s telethon, medical education. research, arts, the University of Western Australia Centre for Citizenship Miller William Buckland $7.3 million $5.2 million Cause: The environment, mental health, education, Cause: Vulnerable and disadvantaged Victorians, medical research and social services. housing, employment, health, education, agriculture. 22 THE AFR MAGAZINE MAY Above: Leonard Vary, chief executive, Sidney Myer Fund and The Myer. the line, joint funding is the way to go, Melbourne-based philanthropist and connector Paul Wheelton says, adding that increasingly large trusts are only funding projects where the government is also kicking in. The cut off for this year s list of top 50 private givers was $3.3 million, 10 per cent higher than last year s cut off and the number of private ancillary funds is increasing: there are now about 1600 with a corpus of $10 billion, distributing $500 million per annum. (Private ancillary funds or PAFs are a form of charitable trust introduced in 2001 to encourage philanthropy, where income isn t taxed and donations are tax deductible.) Data from JBWere Philanthropic Services division shows that PAFs are susceptible to financial market performance. When the GFC hit in 2008, the number of new PAFs fell to less than 50 in There were more than 150 in the previous year and the numbers are climbing once again. John McLeod, co-founder of the JBWere s Philanthropic Services division, which manages over $5 billion in charitable assets, and compiler of the Philanthropy 50, expects the gifts will grow each year at about 10 per cent. Increasingly, he says, universities, the arts and medical research are the beneficiaries of the biggest gifts. It s not uncommon for a top-tier university to raise more than $50 million each year. Thanks to its alumni networks the tertiary sector is considered one of the most sophisticated fund raising machines in the market. And still, Australia has a large minority of people who can, but don t, give. According to JBWere s recently released research, The Support Report, 41 per cent of people who earn more than $1 million a year didn t make a $2 tax-

4 deductible donation in That means that philanthropy, while growing in profile and activity, is still a relatively small portion of the overall giving pool. In the US, by comparison, of those earning more than a $1 million a year, only 10 per cent don t give. Overall, donations account for just 8 per cent of the $140 billion annual income received by charities. The government accounts for about 40 per cent and the remainder comes from earned income. When taken alone, philanthropy (defined as giving from high-net worth individuals or giving via a PAF or trust) is an even smaller piece of the pie: just 1 per cent. Despite its relatively small size, the sector has an outsize influence on non-profits. McLeod calls it the charity sector s risk capital the extra dollar that helps fund experimentation and innovation. Others say its role is lifting a worthy project to a great one. Navigating the world of philanthropy can be delicate. Wheelton says he s conscious of stretching his networks. He initially turned down the role of Guide Dogs Victoria s campaign chairman for that very reason. I said I wouldn t do it, he says. You tend to use up your networks by asking them to put in money... you can only go to them so many times. After thinking it over, Wheelton eventually agreed to take the role. Louise Walsh has no such concern. The former Philanthropy Australia chief executive now runs fund manager Geoff Wilson s Future Generation listed investment vehicles, where 1 per cent of assets is donated to 22 charities for mental health and youth at risk. Philanthropists are big boys and girls, Walsh says. If I introduce them to someone and that or phone call goes into a black hole, that s fine. I m not going to badger that funder. We need more people that are prepared to stick their neck out and connect people. It s a further mark of the sector s different styles. The old school prefers to give without strings; the new school wants to leverage giving by bringing in others. And the right connection can take a cause to all sorts of places. Last year when it became clear that gay marriage would be put to a plebiscite, Tom Snow, son of Rich Lister Terry Snow, and his partner Brooke Horne knew they needed to find millions to fund the campaign machine for Australians For Equality. The pair called Vary, who stepped a little out of his comfort zone and introduced Sydney-based Snow and Horne to people with deep pockets and influence in Melbourne. It s calling on my personal network in a way I wouldn t ordinarily do, says Vary, who personally supported what he describes as a critical pressing civil rights issue. We at the Myer were early and significant supporters of the movement... and I thought about how I might be able to leverage the contribution. While some foundations and philanthropists are increasingly choosing to work together, another development is the expectation the government will contribute before many choose to commit. The controversial new wing proposed for the Art Gallery of NSW proved that, once again, when the arts sector chooses to exercise its clout, it does so very well. Less than a year after the capital campaign publicly launched, the gallery has $88 million in commitments, putting it within striking distance of the $100 million it needs to unlock the WHEN THE NEW GENERATION GIVE MONEY, THEY SET OUT AND EXPECT CERTAIN OUTCOMES. David Gonski 25 Collier Charitable Fund Cause: Mainly welfare, hospitals, education and religion. 26 Brazil Family Cause: Stroke and motor neuron disease research at the University of Queensland s Brain Institute. 27 Scanlon Cause: Advancing Australia as a welcoming, prosperous and cohesive nation particularly around the transitioning of migrants. 28 John and Myriam Wylie $4.9 million Cause: State Library of Victoria, Queensland Rhodes scholarships. 29 Stafford Fox Medical Research $4.9 million Cause: Medical research at public hospitals and universities. 30 Peter and Lyndy White $4.8 million Cause: Increasing the supply of housing for those suffering or at risk of homelessness. 31 Ernest Heine Family $4.6 million Cause: Medical research institutions and social services providers. 32 Geoff and Brad Harris $4.5 million Cause: Housing for the homeless; support for young people. 33 Stan Perron Charitable Trust $4.4 million Cause: Hospital and rehabilitation services particularly for children; university and medical research. 34 Geoff and Helen Handbury $4.2 million Cause: Education, mental health and crisis intervention, social services, the environment. 35 Tim Fairfax Family Cause: Arts, education and community initiatives aimed at rural, remote and regional communities in Queensland and the Northern Territory. 36 JO & JR Wicking Trust Cause: Wellness and quality of life of the aged and those with, or at risk of, Alzheimer s. 24 THE AFR MAGAZINE MAY

5 37 R E Ross Trust Cause: Disadvantage and inequity, social inclusiveness, community connectedness, health and wellbeing, the environment. 38 Thomas Cause: Marine issues, the environment, asylum seekers, medical research. 44 Garnett Passe and Rodney Williams Memorial $3.8 million Cause: Scientific and educational initiatives on health and medical research. 45 Estate of Francine McNiff $3.8 million Cause: Chair in criminal jurisprudence plus support of two PhDs in criminology at Monash University. 39 The Yulgilbar Cause: Rural Australia, environment conservation, capacity building, education and Alzheimer s research. 40 Andrew Thyne Reid Charitable Trust Cause: Medicine, science, creative arts, the environment, education, social and community needs. 41 The Charitable Cause: International aid. 42 Xenia Cause: Income support and maintenance; volunteerism. 43 Helen Macpherson Smith Trust Cause: Education and vocational pathways, culture and heritage, land and the environment, regional resilience, health. 46 David Winston Turner Endowment Fund $3.7 million Cause: Mental health doctorate scholarships at Monash University. 47 Turner Family $3.7 million Cause: Part of $18.5 million for wildlife conservation projects at the University of Queensland. 48 E Kornhauser Charitable $3.6 million Cause: Religion, education, refugees, poverty relief. 49 Jaam $3.4 million Cause: International aid, the environment, income support and maintenance. 50 John T Reid Charitable Trusts $3.3 million Cause: Aged care, the arts, education, youth, the environment, health. Caitriona Fay, Perpetual s national manager philanthropy and non-profit services. METHODOLOGY How the list was compiled. The amounts are those given to end recipients, mainly charities, in the 2016/17 financial year, by Australian individuals, families and bequests, both directly and through foundations. It does not include donations to foundations, anonymous gifts or corporate giving. With pledges and multi-year gifts, only the actual amount given to end recipients in 2016/17 is included. Where the exact amount for NSW government s pledged $244 million. A key moment came when Susan and Isaac Wakil donated a staggering $20 million. Behind the scenes, the role of the Wakils was shrewd: it s understood that after they committed to an initial, substantial donation, they then decided that an even bigger donation would spur the government to give more. And once the funds are released, how does a philanthropist measure the success of their investment? Caitriona Fay of Perpetual Trustees oversees $3.5 billion in philanthropic funds and says the philanthropic sector needs to better interrogate its impact. She encourages givers to solicit more feedback from the people who receive their money. She also thinks that instead of adopting the start-up mantra of failing fast, philanthropists should allow their projects to fail for longer so they can learn what to do differently next time. Fay has seen how even relatively modest bequests can create extraordinary change. Stella Miles Franklin couldn t imagine the type of impact a small $15,000 trust would have on Australia s literary heritage, Fay says, referring to the Miles Franklin Literary Award that is overseen by Perpetual. That said, not everyone gets to help fund the next generation of Australian writers. We re really talking about getting philanthropists excited by the boring. Instead of funding the shiny new app or innovative new program, it s about building up a philanthropist s appetite to fund things like quality governance, investing in leadership. Vary says that in some cases, it s impossible and unnecessary to measure impact. The Sidney Myer Creative Fellowships each year gives 10 artists $160,000. How can the impact of funding an artist be judged? And over what time period? For David Gonski, there s a much bigger question at stake. Instead of asking why donate, people should be asking why not. Where we are today is if you give money, that s correctly seen as wonderful, he says. If you don t give, and you re able to give, it s not yet seen as letting down the side. That s the next bastion and it will happen. that year is not known, an average per year over the term of the pledge is assumed. Where the term is not known, five years is assumed. Researched and compiled by John McLeod of JBWere Philanthropic Services. Sources include the Australian Charities and Not-for-Profits Commission, Fundraising Research & Consulting, Fundraising & Philanthropy Australasia and Pro Bono Australia. 26 THE AFR MAGAZINE MAY