The gift that keeps on giving - The super-wealthy who give it all away

ELENA DOUGLASThe super-wealthy who give it all away

PUBLISHED: 14 HOURS 10 MINUTES AGO | UPDATE: 4 HOURS 6 MINUTES AGO

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Andrew and Nicola Forrest are Australia’s most visible “philanthrocapitalists” – a new-generation of outcome-oriented, epic philanthropists seeking to solve global problems. Photo: Penny Bradfield

Talking Point

ELENA DOUGLAS

“The man who dies thus rich dies disgraced,” wrote industrialist and philanthropist Andrew Carnegie, of those who died without disbursing the fruits of their endeavour in his famous essay “The Gospel of Wealth”.

“Yet the man who dies leaving behind many millions of available wealth, which was his to administer during life, will pass away ‘unwept, unhonoured, and unsung’, no matter to what uses he leaves the dross which he cannot take with him.”

Bill Gates, Warren Buffett – and Andrew and Nicola Forrest – have pledged to give away half their wealth in life. They all subscribe to Carnegie’s creed that those best-placed to distribute money for the greatest benefit are those with the skill to amass a great fortune to begin with.

The Forrests’ $65 million gift to the University of Western Australia – $50 million for post-graduate scholars and researchers, and $15 million to build a world-class hall of residence – aims to remake the intellectual landscape of Western Australia with a perpetual influx of the world’s brightest minds.

This will be the tip of the Forrest iceberg. They will donate billions and have picked slavery as their big target. (There are 27 million slaves worldwide, more than in 1860.)

NEW GENERATION OF GIVERS

The Forrests are Australia’s most visible “philanthrocapitalists” – a term used to describe the new-generation of outcome-oriented, epic philanthropists seeking to solve global problems using the tools of commerce: “I want to have charity managed like a business with hard-edged targets, timelines and being driven by outcomes,’’ Forrest says. “And I want the people in the business arm to know what they are really working for.’’

Celebrating the Forrest gift, admiring the “fiercely competitive spirit” of successful Australians, Prime Minister Tony Abbott challenged: “Wouldn’t it be good to see our greatest magnates outbidding each other not to buy a bigger boat or to build a bigger mansion, but to create a better future, to leave a better legacy for our country?”

Acknowledging the nation’s “comparatively thin culture of philanthropy”, he said the Forrests’ gift, like Kerry Stokes’s to the War Memorial, Greg Poche’s $30 million to the Mater Hospital, and Graham Tuckwell’s $50 million to the ANU, demonstrates change.

In contrast to the class-envy stoked by Wayne Swan in the Rudd-Gillard era, Abbott invests philanthropy with hope: “Individual wealth would seem less a personal benefit and more a national asset.

“We wouldn’t just be a richer country – we would be a better country.”

High-profile philanthropy has a way to go in Australia’s egalitarian culture, and there are limits to its role in funding the social and cultural activities we desire.

Even in America with its established culture and practice, philanthropy is dwarfed by governments and markets. (Annual US philanthropic giving: $300 billion, Government spending: $6 trillion. Economy: $16.6 trillion).

GIVING IS GETTING

Expectations must be realistic. At their best, creative, intelligent philanthropists are innovators and risk-takers: they pilot things, develop deep knowledge and expertise, and connect people. New approaches are then rolled out by not-for-profits, businesses and governments.

But the biggest secret is that philanthropy is incredibly rewarding for the giver.

Experienced philanthropists say the more they engage, the more they learn and the more humbling the experience. It changes their lives. Givers speak of a deeper sense of meaning and purpose and of flow-on benefits to family life. (If you think raising well-adjusted kids with feet on the ground and hearts in the right place is hard with never enough money, the very wealthy will tell you just how hard it is when you’ve got too much.)

Tony Abbott seeks a national giving competition. Others, like Daniel Petre, try to persuade with guilt, citing the comparative stinginess of Australia’s rich.

But you catch more flies with honey.

The prophets agree: “What is the use of living, if it be not to strive for noble causes and to make this muddled world a better place for those who will live in it after we are gone?” said Churchill.

The message from the Forrests’ new adventure is they are making their lives and wealth count. This is the gift that will keep on giving.

READ NEXT:

• Forrests’ $65m giveaway to University of Western Australia

Elena Douglas is the convener of the Centre for Social Impact at the Business School, University of Western Australia, where she teaches Philanthropy and Social Investment to post-graduates.

ELENA DOUGLAS

Aboriginal policy a hard act for PMs

PUBLISHED: 0 HOUR 19 MINUTES AGO | UPDATE: 0 HOUR 16 MINUTES AGO

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Australian Indigenous Chamber of Commerce chairman Warren Mundine with Prime Minister Tony Abbott. Photo: Alex Ellinghausen

ELENA DOUGLAS

Australian leaders arrive in office yearning to improve Aboriginal wellbeing. Some, like Paul Keating, demonstrably have. Others leave disappointed in their record: witness both Bob Hawke and John Howard. Tony Abbott wants to be “not just Prime Minister, but a Prime Minister for Aboriginal affairs”.

His promise is to convert “good sentiment” into “practical changes to improve lives”; his mantra: “Aboriginal children need to go to school, adults to work and the ordinary rule of law needs to operate in indigenous communities”.

No comprehensive roadmap yet exists. The newly minted Indigenous Advisory Council offers the best insight into the Coalition’s agenda. The public statements of Warren Mundine, Noel Pearson, Marcia Langton and Peter Shergold give us a sense of the terrain.

Mundine, former ALP president, now Australian Indigenous Chamber of Commerce chairman and a company director, is a powerful backer of the pro-business, economic empowerment agenda to “get people off welfare into jobs; get private home ownership on traditional lands; and for commerce and economic development to blossom for indigenous people through their land and native title rights”.

Since his 2000 Ben Chifley Memorial Lecture, Pearson – Mabo negotiator, founder of Cape York Institute for Policy and Leadership and one of the country’s most eloquent political philosophers – has challenged Australia to build a new consensus on welfare “on the principles of personal and family empowerment and investment in the utilisation of resources to achieve lasting change”.

His litany: “Dependency and passivity kills people and is the surest road to social decline. Australians do not have an inalienable right to dependency they have an inalienable right to a fair place in the real economy”.

Indigenous academic Marcia Langton spelt out the changing economic, demographic and cultural landscape in Australia’s north, where 82 per cent of the land is owned by indigenous people, in her 2012 Boyer Lectures. Economic interests, she argued, are now closely aligned with non-indigenous Australians in mining, cattle and tourism.

Langton made a fierce case for indigenous entrepreneurs, wealth creators and workers to be the centre of policy efforts to expand this economic renaissance: “Aboriginal people, like other humans, have an economic life” – and progressives not wedded to this notion will harm, not help, their progress.

The Coalition wants to sing to these song-sheets.

Peter Shergold, secretary for the prime minister and cabinet under Howard, laments vast sums spent on benefits that “too often entrench the poverty the payments are intended to eradicate”. He claims 20 years in public administration as a “personal and systemic” failure to produce “equal opportunity, economic and social mobility, human rights and civic responsibilities, control and empowerment” for indigenous people.

FOCUS ON BUSINESS

The Coalition will continue the former government’s “Closing the Gap” framework. However the new council emphasises economic development and wealth creation. Business will play a starring role. This council is likely to direct government investment – $24.5 billion (55 per cent federal, 45 per cent states) in 2010-11 – in new ways.

Wealth creation requires the restoration of work-readiness of young people and the conversion of assets into income streams, both driven by communities themselves. This will present heroic challenges, yet offers the most realistic prospect of “closing the gap” in living standards.

New approaches are required. The definition of solutions on white boards in Canberra must stop.Understanding context and place, empowering local leadership and measurement of progress at community level will all be crucial.

Great divergences in indigenous wellbeing exist in Australia. Multimillion-dollar native title agreements have made some indigenous communities among our wealthiest. Here legal parameters must be flexible enough to allow enduring economic dynamism to be ignited.

EMPLOYMENT RATES

Of the 548,370 Aboriginal Australians (2011 census), an increasing number are middle-class and thriving. More are employed than ever before: 58.8 per cent of males over age 15, compared to 84.8 per cent of all males (42.9 per cent to 69.4 per cent for females). However, in some communities, the employment rate is below 20 per cent and crushing poverty prevails. Policy must respond to particulars.

Mining is changing the landscape and raising incomes. Witness, in the Pilbara, Newman’s indigenous median household weekly income: $2583 ($2876 for non-indigenous), compared to $1472 Australia-wide and $983 for indigenous.

Averages conceal more than they reveal. Each community requires different strategies and investments to create job readiness and employment opportunities.

Each generation, and its leaders, hopes to close the gap in indigenous living standards. The Coalition’s roadmap is emerging. The terrain is uneven, every community’s story is different, and the journey is unlikely to be smooth. But the destination is central to our hopes for the nation’s future.

Elena Douglas is convener of the Centre for Social Impact, UWA Business School, which hosts the Indigenous Business, Enterprise and Corporations Conference.

The Australian Financial Review