Archive for the ‘Philanthropy’ Category

The Macquarie Group Foundation that I chair celebrated its 25th anniversary recently. In celebration, I had reflected on philanthropy in Australia over the last two decades. I had also made some predictions for the future, which I will share again here. This is no tribute to my foresight: the harbingers of change are already evident.

Within a sector that will continue to become larger, I’d expect to see further developments in 3 key areas.

First, I anticipate that the increased capacity and scale of many economically-significant NFPs will see them evolve into true social enterprises. They will retain the vision that inspires their members, donors and volunteers but increasingly couch their benefits in terms of a blend of social and financial value. Already around 20,000 Australian community organisations trade to fulfil their public mission, reinvesting their surplus income (their ‘profit’) into improving their organisational capacity and scaling-up their activities.

Second, I expect to see new investment vehicles emerge to raise funds which will complement the donations of philanthropists. A contemporary challenge, which will be overcome in the near future, is building and accessing a capital market for social impact. Investors need to be able to make low-interest loans to or acquire equity in social businesses. The early signals are encouraging. The Commonwealth has recently announced a Social Enterprise Development Investment Fund and the WA government has budgeted for a Community Development Investment Fund. Both are intended to harness loan capital for community benefit.

The initiatives are intended to corral social impact investment from those who seek not only a modest financial return but an opportunity to do good. This is the bold business model underpinning GoodStart, which has emerged to manage around 600 of the ex-ABC Learning childcare centres. It’s dependent not on government grants and philanthropy but loans which offer lower than market returns. That’s just the beginning. Expect to hear in the near future of new vehicles such as social impact bonds or a social stock exchange.

Third, and in some ways most influential, the measurement of social and environmental impact will increasingly be incorporated into government measures of national well-being. The social costs (of externalities) and benefits (of community activity) will long before 2035 be fully integrated into measures of Australian economic income and growth. The extraordinary value of community engagement will be accounted for in our national statistics. The social economy, and the contribution which it makes to community well-being and civic engagement, will at long last be properly accounted.

Blog coordinator’s note: For info on the Centre for Socal Impact, please see http://www.csi.edu.au/.


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“If you had $100 million to give away, what cause would you give it to? And why?”
   This was the closing question that moderator Jenny Santhi of UBS posed to the panel at a UBS-INSEAD Forum on Philanthrocapitalism this past April.
   It was an interesting question. It was totally unplanned and our responses were equally spontaneous.
   Matthew Bishop, author of Philanthrocapitalism: How giving can save the world, said he would invest the money in data. Coming from the number-crunching financial world, he finds a dearth in the quantity and quality of data in the social sector. He believes that such data, if readily available, can make a significant difference to the quality of giving and the actions taken in the philanthropic and social space.
   Pushan Dutt, Associate Professor of Economics & Political Science at INSEAD, said he would use it to fund causes that are “less glamorous” and therefore attract less attention. He suggested oral re-hydration tablets for diarrhea.
   Mathias Terheggen, global head of UBS Philanthropy Services, said he wouldn’t tell anybody that he had $100 million to give away. He would get a professional to advise him and he would spend considerable time trying to figure out what he really cares about and wants to focus on in a targeted way. In doing so, he would also think about what else he can bring to the table, beyond the money, in terms of skills and capacity to make his effort impactful and sustainable.
   Me? I said that rather than a specific cause, I would put it into a fund that I would name the St. Jude Fund, after the patron saint for desperate cases and lost causes. I have seen far too many worthwhile causes such as human rights and migrant workers (both of which were mentioned by the audience earlier) that continually struggle to get the necessary money to operate. I would then find a few smart and empathetic people, put them in charge of the Fund, have them make a call for applications and let them distribute the money to those they deemed most worthwhile but that are unable to find funds from other sources.
   Of course, I am also hoping that the Fund trustees will give me some money if I need, since, as my wife will vouch, I, too, am a lost and hopeless cause.

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Philanthropy has often been associated with mega-giving and mega-givers. The fact is that it covers a multitude of donors, modes of giving, and beneficiaries. That said, all forms of philanthropy are experiencing unusual changes.

            Four major trends can be observed. The first is borderless philanthropy, with rising charitable giving beyond the US and increasing cross-border philanthropic flows. The second is e-philanthropy and the spread of giving, enabled by technology, in innovative ways. The third is philanthrocapitalism, with the engagement of business entrepreneurs and their many ideas, ambitions, and resources for increasing social impact. The fourth is collaborative philanthropy, as givers and even governments seek to collectively create greater social impact.

                All these trends are motivating the rich and not-so-rich to give more and in new ways, and thus powering philanthropy, leading it toward an exciting and, sometimes, surprising future.

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