By Nick Hedley
Australia consistently ranks amongst the most generous nations
in the world, particularly when it comes to monetary donations. Now, a new
generation of Australians is rewriting the rules of giving in an effort to
maximize impact, says Susan Chenoweth, head of philanthropic services at
private wealth firm Elston.
The fresh approach to philanthropy is perhaps epitomized by
tech billionaire Mike Cannon-Brookes, who is wielding his money and influence in
business to tackle climate change.
Last year, Cannon-Brookes and his wife, Annie, pledged A$500
million (US$337 million) in donations towards nonprofits working to curb global
warming, in addition to A$1 billion in financial investments.
Then, in early 2022, he became the top shareholder in AGL
Energy, with the aim of pushing the utility to shut its coal-fired power plants
by the mid-2030s and accelerate its shift to clean energy.
“He’s still relatively young, he’s passionate, and he knows
how businesses work,” Chenoweth tells Markets Group. “It’s a great example of
someone giving their all – moving beyond philanthropy in the traditional sense,
to creating social change. He’s giving not just money, but also his time,
talent and influence.”
Cannon-Brookes’ approach highlights a growing trend whereby Australians
are becoming more involved in their philanthropic endeavours, Chenoweth says. In
addition to monetary donations, people are also volunteering, taking on
governance roles at firms, and using social media to spread awareness.
Unlike previous generations, younger clients tend to take a more
hands-on approach to philanthropy, and they want to see tangible impacts while
they are still alive.
This means professional financial advisors now have extra
responsibilities as clients turn to them for advice on giving in more strategic
and structured ways, Chenoweth says.
“Advisors recognize that the philanthropic space is complex –
there’s an array of different types of structures available, there are many
non-profits in this space, and there are tax and compliance considerations as
well. They are seeking to build their knowledge of the sector so they can
support their clients in the best way possible.”
With this in mind, Elston – which has around US$2.5 billion in
funds under management – has put together a training module for advisors. “It’s
still new, but there’s been a great deal of interest,” Chenoweth says.
Structured giving is more accessible than in the past, she
says, and there is growing interest in community foundations, public ancillary
funds, and other vehicles that pool resources for specific causes.
The Elston Giving Foundation, a public ancillary fund, was
set up specifically for this purpose, although the firm also administers
private ancillary funds and other structures.
In terms of causes, Chenoweth says Australians tend to
donate generously towards relief efforts following extreme weather events, such
as the bushfires in 2019 and 2020.
Climate change, domestic violence and medical research are also
high on the agenda of many Australians.
In the case of domestic violence, philanthropists are becoming
more involved in lobbying and political activism, while also funding counseling
services, crisis centers, legal assistance, shelters, and research programs that
seek effective ways to deal with this pervasive societal issue.
And since financial abuse is often intertwined with domestic
violence, some clients also fund financial literacy programs to help women
leave abusive partners.
Chenoweth says that while philanthropic giving is rebounding
following a COVID-induced dip, more can be done to grow this important segment
of the market – particularly as Australia’s affluent population swells.
Many good charities do not qualify for tax deductibility,
for instance. At the same time, more education is needed to ensure citizens are
aware of the options at their disposal, she says.
According to Charities Aid Foundation’s World Giving Index
2021, Australia is the fifth most generous nation in the world – and the most
generous of all developed countries.