Philanthropy in Australia You Do With It That Counts

Andrew Forrest, Fortescue Metals chief, has pledged to donate half of his private wealth for philanthropy causes. This comes on top of Graham Tuckwell’s $50m donation to equity scholarships at the Australian National University.

Australia isn’t the first country to practice philanthropy. We all know the names of museums, galleries and think-tanks. Many less-known Australians also make generous donations. The nation’s largest banks manage millions of dollars in small to medium charitable bequests from anonymous or unknown donors. Many of these donations date back over a century.

It is worth discussing how Australia uses the generous donations of private benefactors.

As Australia becomes richer, but also less equal, the role of philanthropy has been growing in prominence. However, government funding being cut. Someone, or something, must give.

Critics see philanthropy, even though it is not unique to America, as being alien or hypocritical and self-serving. Satyajit Das, a commentator, argue that philanthropy can use to undermine social policies by reflecting the views and not a thorough analysis of the issues. He writes that such influence can be harmful in a democracy.

Good Or Bad Thing Philanthropy

The question isn’t whether philanthropy can be a good or bad thing. It could be both. It is possible to work with private donors on a scale that can really make a difference.

Philanthropy not meant to replace markets or do the job of the government. Its purpose is to manage the health and education system, provide basic care to the sick, and reduce poverty on a significant scale. These services provide by non-government organizations in Australia, which mostly fund by the government. These services are fund by the government, but only a small fraction of private wealth is available.

Philanthropy can be a way to help, as it draws on two distinct features of private giving that are often lacking in government and market operations: innovation and taking risks.

Private philanthropy can support innovation more effectively than commercial investors or government agencies. Muhammad Yunus approached Bank of Bangladesh in 1970 to expand micro-credit services for the rural poor through his Grameen Bank. The Bank of Bangladesh declined Yunus’ request for core lending. Management and the board of the bank considered that lending to poor households was inconsistent with its obligation to shareholders and depositors to ensure their investments’ security. The breach was not filled by any government agencies, government international aid donors, or other government agencies.

Yunus sought out a private donor to the Ford Foundation for a $800,000. loan guarantee as security against commercial microcredit loans. This was not a grant, but a social investment. He was willing to repay it if his plan succeeded. Ford took the risk. As we now know Muhammad Yunus paid the entire loan back after proving the viability of his microfinance model to both banks and the market.

Harvard University Professor

Steven Lawry, a Harvard University professor, notes in a case study about the Ford Foundation’s dealings regarding the Grameen Bank that most innovative ideas don’t come from donors or their boards but rather from those living and working near the problem.

Social justice donors must keep their ears open to the ground, but be humble enough to recognize that they may not have all the answers. They bring resources, open minds, and a willingness to take risks. This case involved a private foundation taking on the risk of social innovation from another person until the innovation was commercialized and proven to be viable – in an investment philanthropy style that is still innovative in some parts of the globe 40 years later.

It is not enough to take on risk. After the risk appetite is establish, it’s important to find the best innovations and test them in the field. Then, you need to work with markets and the state to increase resources. Finally, scaling up a social program until it has a systemic impact will require a different set of challenges. If done right, a strategic risk investment under one million dollars can make a positive social impact that is measured in the hundreds of thousands or even billions of dollar over time.

Afraid To Take Risks Philanthropy

Australian Philanthropy isn’t afraid to take risks. The Commission for the Future and the Myer Foundation created Asialink in 1989. This university-based entity promotes Asia literacy in Australian schools, from kindergarten to senior high school.

Asialink, in turn, established the Asia Education Foundation. This foundation leveraged millions from the federal government to support state-based Asia literacy programs. The Myer Foundation made an investment in a future that was yet to realize through Asialink.

Philanthropy cannot compensate for market failures or replace poor policy. It can, however, expand public access to public goods and improve delivery of government services through its willingness to take risks and be innovative.

It can also trigger market corrections. Australia requires more of this type of risk-taking innovation, and not less. It is also important to have a more inclusive and open discussion about how philanthropy can impact our communities, the environment, and our overall well-being. Not a question of whether philanthropy can be a good thing or not. It is about finding out how beneficial it can really be.

Philanthropy Could Change Higher Education Funding

Since the Middle Ages, universities have been support education by donations from wealthy individuals and organizations. Universities’ ambitions today go beyond the ability of governments to finance them. The donation of wealth to others through philanthropy can make a significant contribution to the scientific, social and technological advances that universities seek to achieve.

Philanthropy’s Transformative Education Power

It takes a certain level of professionalism and strategic sophistication to attract and use philanthropy effectively. This is something that was lacking in many countries such as Australia and the UK until recently. Universities must be more sophisticated in how they use donations. They cannot just use them to fill budget gaps. Must use it to transform.

They must also employ more qualified staff and have better systems and processes.

The traditional reliance on government funding has not led to the development of the culture and practices for giving in the US. Private donations are always more important.

Harvard University launched its first fundraising campaign back in 1643. It receives on average A$3.83 millions per day, according to certain measures.

Philanthropic gifts account for around one-third the research budgets at the top universities in the United States. These donations have a greater impact than their financial size would suggest. For example, philanthropic giving funds more long-term and adventurous research. This is particularly important for young, less established researchers.

It has a significant impact. One estimate says that 47 Nobel science award winners have received significant funding from Rockefeller Philanthropy in some form or other. The teaching and accommodation facilities have greatly improved by philanthropy.

What Can We Learn From The Most Successful Universities

The potential for transformation is one of the most important strategic considerations in philanthropy. Philanthropy is not about money. It fails to realize its full potential. Partnerships can be a powerful way to stimulate innovation at universities by establishing deep, ongoing relationships with donors who share the same values.

MIT used the expertise of Mohammed Abdul Latif Jameel to alleviate global poverty in its Abdul Latif World Water and Food Security Lab.

It is also possible to use philanthropy to stimulate important inter-disciplinary initiatives. The Michael Uren Foundation has funded a new center for biomedical engineering at London’s Imperial College. It was a foundational investment for the university’s new research Translation Campus, which links companies and researchers to transform scientific and technological innovation into new products and/or services.

The A$100 million series of direct gifts from Atlantic Philanthropies to The University of Queensland was one of the most prominent examples of transformative Philanthropy. This money was used to create the A$1billion Smart State Institutes such as the Institute of Molecular Bioscience.

University Philanthropy Faces Challenges Education

Universities should be aware of the dangers that hidden agendas by philanthropists can pose to their institutions. The Koch brothers, American philanthropists, used their wealth to promote their libertarian, if not extreme right-wing views.

After it became clear that funds had been received by the Gaddafi Foundation in 2010, the Director of London School of Economics was forced to resign. This was at a time when the son of Libya’s leader was allegedly awarded a ghost-written and plagiarised PhD.

It is possible to seek smaller donations, but this can create problems. Wealth identification services may infringe on alumni’s privacy. Some universities may be perceived as continually asking alumni for money.

These factors emphasize the importance of communicating the goals of philanthropic gift within university education communities and broad acceptance of its value.

The long-term, transformative investment in universities is not compatible with the short-term budget-constrain priorities for governments. Universities that have relied on the public purse for funding for a long time need to diversify their funding sources. They must also hedge against their dependence on international student fees.

Another major source of support is philanthropic giving. It is growing in Australia with major campaigns like the University of Queensland’s Not if, When campaign, but it is dwarf in America by the funds raise there.

There is a lot of competition for funding, even with the most prestigious universities. Oxford and Cambridge both recently ran multi-billion-dollar campaigns. Oxford raised nearly A$3.5 billion, while Cambridge raised almost A$2 billion.

Philanthropy Means More Risk Taking

Monday’s announcement of Andrew Forrest risk, mining magnate, and his wife, Nicola that they would donate A$400m to a variety of causes was a significant day for Australian philanthropy.

The philanthropic contribution, Australia’s largest by living donors, at $75 million was certainly notable. It also brought attention to the funding of ambitious projects. The global effort to end modern slavery will receive $75 million. An additional $75 million will go to developing a blueprint for child development in Australia, and elsewhere.

This announcement highlighted once again that Australia’s philanthropy is maturing

A Shift Toward Strategic Philanthropy

Australia is receiving larger and more generous donations. There is also a greater focus on strategic philanthropy which seeks to address the root causes of complex problems through research, advocacy, collaboration and research. It is clear that the Forrests’ efforts in ending slavery and improving child development fit within this category.

Australia’s philanthropy is still small, especially when you consider the size of the government and the economy.

As the philanthropic sector grows, more people will question its power and influence. This was evident in the comments on social media and talkback radio that made to the Forests announcement.

Some people are not comfortable with philanthropists using money to effect social change. They question why they should in charge of the decisions unlike elected governments, philanthropists do not have democratic accountability.

Due to the increasing number of megaphilanthropists in the US, this is becoming a more frequent concern. This criticism ignores the fact that philanthropic funds can be use in a different way than government dollars because they aren’t subject to the same accountability.

Governments are often criticize for being slow, inflexible, risk-averse and unable innovate. It is not a fair criticism. Governments can and do take risks, and innovating. There is some truth to this assertion. The truth is that governments can’t take the same risk as philanthropists. This is one reason why philanthropy has such a vital role.

Social Capital Or Risk Capital

Philanthropy is often refer to as social capital or risk capital. This allows philanthropy to be more flexible and responsive. It can push boundaries and support innovation where governments might be reluctant.

Although most people would expect governments to be open to innovation, they are not likely to expect them to push the boundaries. Sometimes, that’s what you need and what you can accomplish when you aren’t constrain by electoral cycles and the scrutiny of political opponents.

The best example of this in modern times is the role of philanthropy in helping to make the Iran nuclear agreement possible in 2015. The Rockefeller Brothers Fund, a US-based foundation, has provided US$4.3million in funding since 2002 to support so-called Track II diplomacy with Iran.

The initiative brought together former officials of both countries governments to have the type of discussions that were impossible through diplomatic channels. Secret meetings were co-convene by the Rockefeller Brothers Fund and presided over by them. They were held in Europe to build understanding between the positions of the US government and Iran’s.

Participants regularly briefed their counterparts back home about the discussions, which helped each country to better understand the other’s position.

Over time, many barriers were broken down. In 2013, Hassan Rouhani, the new Iranian president, appointed one of the key players as foreign minister. This was a significant step in the formal negotiations that eventually led to the agreement.

It’s More Than Just About The Money Risk

The Forrests are bold in their ambitions for philanthropy. This may make it easy for some to dismiss their goals. Modern slavery can be ended. It is not an easy task. The Rockefeller Brothers Fund was ambitious in Iran and paid the price.

Philanthropy is more than just bringing money to the table. In their Monday remarks, Prime Minister Malcolm Turnbull highlighted the Forrests’ ability to use their voices and advocate for change. Philanthropists have the ability to use their convocation power to bring together experts, governments, communities, and civil society organisations around specific issues.

Although philanthropic organizations are not as democratically accountable as governments, this does not mean that they are not accountable. The Australian Charities and Not for Profits Commmission oversees all foundation activities, including the Forrests Minderoo Foundation.

Philanthropy is dependent on the networks of stakeholders it works with – governments, civil society organisations, subject experts, governments, members of the community, and other stakeholders. Philanthropy must also cultivate these networks to be held accountable for its actions.

Transparency is also an indicator of accountability. Recent research has shown that philanthropists are becoming more aware of the importance to be open and transparent in what they do.

In the end, more philanthropy is more willing to take risks to solve the problems facing Australia and the rest of the world. It is important to recognize the importance of risk-taking and to welcome philanthropists such as the Forrests who are bold and transparent about what they do and why.