The face of philanthropy is changing, as wealthy donors draw on values often inculcated in them as children and align themselves with like-minded organisations.
For Cathie Reid, family involvement in philanthropic matters goes back to her childhood in Victoria. She didn’t quite know it then, but seeing the time that her family would devote to the community would influence her when she and now husband Stuart Giles started their business – well before they had accumulated their wealth.
“Mum was always involved in the church, with outreach things, meals on wheels, every committee at school and so on,” Reid tells The List. “So it meant both of our families already had a component of giving back and being involved in the community that was always from a time and effort perspective more than a financial one. When you come from that background, it is not a societal expectation, it is just something that you’re involved in.”
Reid and Giles would go on to build an estimated $500 million fortune from the Epic Pharmacy chain and cancer care services provider Icon Group. But Reid still fondly remembers their early days in business, when their staff would get involved in fundraising activities such as jumping on the treadmill to run or walk for the Very Special Kids organisation. Such was the enthusiasm that they would get suppliers and customers involved, and Reid now laments the fact she hasn’t been on the treadmill for five years given the demand from her staff for places in the annual fundraiser.
With a culture of giving in place at work, Reid and Giles have turned their attention to their teenage children, Sascha and Sam. Reid sounds proud when she discusses Sascha’s involvement in Girls Up, a global organisation that gives girls the platform and resources to start movements for social change, and Sam’s leadership in cajoling his high school to join him in his involvement in a program to help indigenous reading levels.
“We have certainly both realised the example that parents set when we were growing up,” says Reid. “It was the interests they had and the commitment that meant philanthropy is what you just did, and then it was a matter of having the awareness to deliver that same example to our children. It is really important that kids can see they have an opportunity to make a difference as well.”
Reid and Giles are symptomatic of the changing face of philanthropy among members of The List. It is not just a case of writing a cheque and leaving it at that. Families and organisations are increasingly aligned in their philanthropic pursuits and they are trying to get the culture of giving to permeate their organisations.
Richard Felice of Belay Advisory, who has several clients on The List whose wealth he manages and whom he advises on philanthropy, says it also helps build family unity – not always easy to do when vast amounts of wealth are involved.
“One of the biggest things about this is legacy, and also family harmony,” he says. “The biggest risk in these decisions is it can break up families so it is really important to get a good outcome. There is such responsibility with these incoming generations. Mum and dad have made this wealth and they [the kids] are the stewards of it. So starting to involve kids through philanthropy helps with that transition.”
Veteran Melbourne property developer Michael Buxton says he has noticed that cultural change, and says it is up to people like him to educate their children about the benefits of getting involved in philanthropy rather than just enjoying the family wealth.
“We were never shown it at all when I was growing up,” he says. “All I used to do was things with the school; that’s all I knew. I see that as a greater role for us into the future. The wealthy are getting richer, so there is a greater need to do that; it becomes a responsibility. As you get wealthier you feel you can give more away, which you do. Then it is a matter of how you do it.”
There are probably as many causes or strategies for philanthropy among those on The List than there are stories about how they made their money. Money manager Kerr Neilson splits his millions in annual donations among 50 difference causes. Jeff Chapman’s Chapman Foundation will devote profits from funds management investments to various social and migrant causes.
Peter Scanlon remembers growing up among migrants in Melbourne’s Coburg and has put $150 million into his Scanlon Foundation for various multicultural programs. Flight Centre co-founder Bill James has a passion for looking after the Kokoda Trail in Papua New Guinea. Jude and Graham Turner have incorporated environmental protection to their chain of eco-lodges, along with educational programs.
The nation’s biggest giver, billionaire Andrew Forrest, has more than $2 billion in his and wife Nicola’s Minderoo Foundation. It spent $88 million last year on fighting cancer, ending slavery, eradicating plastic waste in the ocean, indigenous and other causes. It even procured $200 million worth of COVID-19 testing kits and personal protective equipment for the federal government.
The list of who does what goes on and on. Billionaire manufacturer Anthony Pratt and his sisters Heloise Pratt and Fiona Geminder and their family have the Pratt Foundation, established for more than 40 years. In the past year the family donated more than $23 million to various causes, including The Smith Family, the RSPCA, the Doherty Institute – which has been searching for cures and treatments for COVID-19 – food rescue organisation Second Bite, and the families of the four police officers killed in the Eastern Freeway tragedy in Melbourne in April last year.
While many of the donations are mapped out in advance for budgetary reasons, Pratt is not above giving away hundreds of thousands of dollars while sitting at home relaxing. “Every time I see an ad about children in need or with cancer or cruelty to animals I tend to pick up the phone and donate. They get to me every time,” he tells The List. “It’s a real privilege that I can do that.”
Buxton and his wife Janet and their children have their own family foundation, known as the Michael and Janet Buxton Foundation. In 2014, Buxton gave $26 million to the University of Melbourne, including $10 million worth of work from major contemporary artists including Bill Henson, Howard Arkley and Patricia Piccinini ,and $16 million towards the construction of a gallery dubbed the Michael Buxton Centre of Contemporary Arts.
More recently, he and his wife have concentrated on health and helping disadvantaged people.
“We take on projects now like the St Vincent’s Institute where they are doing major [medical] research work, which we like. I always support the Catholic charity works like St Vincent De Paul. Janet has her favourites like The Smith family. There is a greater demand for charity at the moment. You just look at who needs the help the most.”
What is also changing is wealthy people’s increasing preference for social impact investing, where there is an investment that seeks to generate a social impact alongside a financial return. In that way, it marries their business-building instincts with their philanthropic endeavours, says Felice.
“These families are not about to write a cheque and then think about it. They are entrepreneurs and they look at how can it work as a business after funding it initially, so it combines their entrepreneurial strengths and the philanthropic pursuit. It is more about how it becomes self-sustained. There’s the initial donation, the money up front, but then it is operating like a business, and so it is giving [the money] or the tools needed to succeed and then from that point it generates revenue, and the revenue is used and means there’s no need to keep putting money in.”
‘There’s some misbelief that to give back you have to be old and rich and grey,’ says Farquhar. ‘Corporate philanthropy shouldn’t be something you just do at the end of your career.’
One good example of this is Flight Centre co-founder Geoff Harris, who has donated funds to build 57 homes for a new Melbourne social housing initiative. He also works closely with two national social enterprise organisations, Streat and Reach. Streat provides young homeless people with life skills, training and work experience designed to give them a start in the hospitality sector, operating from a property in inner-city Melbourne that Harris bought for $2.5 million in 2013 and leases to the social enterprise for a peppercorn rent of $5 per year.
The organisation generates 70 per cent of its funds via its businesses, including a cafe, catering services, and renting out space for meetings and seminars, and has plans to be completely self-sufficient within a few years.
Boutique wealth management group Koda Capital released its Responsible Investment Benchmark Report late last year, revealing the total value of impact investment products widely available to Australian investors as at December 31, 2019, has risen 249 per cent to $19.9 billion in two years. The report expects potential demand to increase to $100 billion over the next five years.
Koda’s head of philanthropy and social capital, David Knowles, says many clients who would previously overlay an ethical investing philosophy and steer clear of so-called non-ethical investments are now exploring impact investment to ensure their capital not only avoids harm but is invested for social or environmental good, as well as delivering strong returns.
This has been particularly beneficial during COVID-19, with many foundations and wealthy families changing the way they manage their cash and cash reserves and looking for greater diversification with their investments.
“At the same time there is a significant shift, with a much stronger focus on social and impact investing – to ensure their investment strategies are aligned with their own organisational values as well as community expectations,” says Knowles. Almost every [request for proposal] now asks for a demonstration of capability on impact investing.”
Many of the younger members of The List are getting involved in philanthropic matters much earlier than other generations of business leaders in the past few decades. As Reid says, “historically it was a case that philanthropy was something you did in your retirement after you’ve made all your money. I think that is actually wasting a lot of years in which you can be making a difference. So there’s definitely a changing viewpoint and people are actively looking for philanthropic opportunities.”
That is the mentality with which Atlassian billionaire Scott Farquhar, 41, started the Pledge 1% program with company co-founder Mike Cannon-Brookes. It has companies and employees donating 1 per cent of their time, equity, product and profit to causes. Farquhar told The Deal in February that it was a response to what he believes is a mounting problem in Australia of businesses lagging behind the rest of the world when it comes to giving back.
“There’s some misbelief that to give back you have to be old and rich and grey,” says Farquhar. “We felt like, no, we don’t want to wait until we’re old and grey to give back. We’re not trying to cure cancer, we’re just asking our employees ‘what is special to you?’ and then telling them to spend time on it and give back in that way. Corporate philanthropy shouldn’t be something you just do at the end of your career; that’s a total farce.”
Perth property developer Paul Blackburne, 44, is one member of The List who heartily agrees with Farquhar. Blackburne remembers as a university student and then backpacker “wanting to change” the world. After that it was a case of figuring out how.
Blackburne’s philanthropic endeavours include funding the Child Protection Unit in Cambodia He has previously told The List about his ambition to give away much of his wealth later in life.
“It didn’t take long after uni to work out that sometimes this can be hard when you’re broke,” he says. “After years roaming the world looking for answers and learning new things, I distinctly recall realising that the best way for me to create change was to build a strong asset base for myself and my future children to operate from.
“The idea was that I’m just the beginning of a lasting legacy that hopefully makes the world a better place, which was a big motivator for me to start my own company 17 years ago.”
Blackburne says he is now at a stage where he can step back more from the day-to-day running of the business, handing over responsibility to what he calls an “outstanding” senior management team and advisory board “so that I can achieve the next stage, which is always the end game”.
His philanthropic endeavours include funding the Child Protection Unit in Cambodia through the Cambodian Children’s Fund. He has previously told The List about his ambition to give away much of his wealth later in life, and that he wants to establish a foundation or charitable entity that at least one of his young children grows up to become involved in. In that way, he is in agreement with Reid about having a deep family involvement in philanthropy.
However talking about it in detail, Blackburne says, “sometimes depreciates the act of giving if it looks like you want to tell the world about it, so I do not tell anyone as a general rule. I can say that it is my main purpose in life, and I am investing heavily in achieving the philanthropic interests I have in the hope it may inspire other young entrepreneurs to do the same.”
Reid has a similar mentality, and agrees that she weighs up whether to talk publicly about philanthropy or not.
“People may say, ‘why are you talking about it? Is it for the kudos or the pats on the back?’ There are always people prepared to throw brickbats I suppose, but the reality is if you don’t speak about it then other people don’t hear the message.
“At the end of the day I don’t really care what the motivation is. But if it actually inspires people then the benefits certainly outweigh the negatives.”
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