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.