Can we teach old dogs new tricks? Increasing giving through Wills

We’re delighted to have this guest post from Ross Anderson, Director on the Board of the Include a Charity campaign and Christopher Baker, a Research Fellow at the Asia-Pacific Centre for Social Investment and Philanthropy. There are few people in Australia better placed to talk about charitable giving via Wills.

We all know that there is significant demographic change underway in Australia.  The next decade will see Australia’s population exceed 25 million and age dramatically. It will also see members of the population boom that followed the end of World War II (Baby Boomers born between 1946-1964) firstly retiring and then ultimately passing away in increasingly large numbers.

Baby Boomers currently comprise 24% of our population, yet they own over 50% of our nation’s private wealth. By 2020, when most of those ‘never-grow-old’ Baby Boomers will be in their 60’s and 70’s, we will witness the start of the biggest inter-generational wealth transfer in our history.

No wonder charities are stepping-up their efforts to generate increased income from gifts in Wills. This is one of the most logical and obvious sustainable funding strategies that they could possibly adopt given these demographic predictions. But we must act together now to truly harness the powerful philanthropic effects of an increasing mortality rate and the intergenerational transfer of huge wealth that is anticipated to occur over the next 40 years.

What do we know about this form of philanthropy?

Not that much as it happens. We know that charitable giving through Wills in Australia is wildly out of kilter with levels of ‘giving whilst living’ via the support we give to charities whilst we’re alive.

The latest ATO figures show that 4.4 million Australian taxpayers (or 35.55% of the Australian taxpaying population) made tax-deductible donations totalling $1.96bn in 2009-10. Other studies estimate that almost 90% of us support charities in some shape or form.

So why is it that only 7% of us have been sufficiently inspired to include gifts to our favourite charities in our Wills?

A detailed study at Swinburne University of Technology of 1,700 Victorian wills has provided the statistical evidence for what you might have already expected to hear.   The overwhelming majority of us leave all of our accumulated wealth to our immediate family members: first to our spouses, then to our children.  It doesn’t seem to matter how much wealth we’ve accumulated or whether or not we have contributed generously and passionately to charitable causes throughout our lives, when it comes to dividing up our estates – charities essentially don’t get a look in.

The question this raises is whether or not f this role modelling by older Australians has  doomed future generations to repeat this same pattern of estate-planning and overlook charitable giving  in their Wills too?

Let’s be clear, of course looking after our families comes first in most cases.   Adequately providing for those who are dependent on our financial support during our lifetimes is an important aspect of our estate-planning and decision-making. Our current family provision legislation and our ability to challenge the final wishes set out in our Wills ensures that the legal system makes this a reality.

There are however more significant levels of charitable giving through Wills in comparative countries:

In the UK, despite the fact that a very healthy looking 16% of British Wills that went into probate last year contained charitable gifts, the UK Government has introduced substantial financial incentives in an attempt to encourage further giving from personal estates to charitable causes (see www.legacy10.com  for more information).

In the US, the latest figures show that charitable giving through American Wills increased over 12% in the last year to a total of US$24.41 billion.

With our current levels of giving, Australia sits very low down on the league table of charitable giving from Wills.  We don’t believe this is something to be proud of.  We do see it however as a significant opportunity to improve.  The big question we face is “What we can do to inspire more Australians to leave money to charitable causes in their Wills?”

So, what can we do?

Many Australians will be shocked to learn that so few of us make any charitable provision what-so-ever in our Wills.  Given our self-perception as a generous nation, it is unlikely that most of us actually take a considered decision to specifically exclude charities; low participation rates are far more likely to come as a result of a general lack of awareness or falsely perceived barriers getting in the way.

Our current behaviour is unlikely to change without a collaborative and systematic approach to improving our attitude towards charitable giving through our Wills.  This is not an either / or decision. The challenge is not to try and get Australians to leave their entire estates to charities instead of their families.  The challenge is to get most of us to a point where we can consider leaving most of our estates to our families AND to include gifts as a small portion of our estates to our favourite charities.

The Include a Charity campaign (www.includeacharity.com.au) is a practical response to that very challenge. With some realistic, measurable and achievable goals in its attempts to bring about wide-scale social change, this is one of the only true cross-sector initiatives led by 140 Australian charities. With ambitious plans for further collaborative, collective joint impact initiatives, this is one social change campaign to watch.

The campaign has already delivered a wide range of targeted activities to introduce the idea of including charitable gifts in the nation’s Wills to a wider public audience. It is also seeking to increase the skills and sophistication of all in the sector in our efforts to encourage more Australians to take the step of including a charity when preparing their Wills.

We know that the challenge of tipping the very strong prevailing social norm in estate-planning away from thinking about “family only” and towards thinking in terms of “family first, philanthropy second” is large indeed.  It is important to the sector and to wellbeing of Australian society that we are able to make some significant inroads to change the current behaviour in estate-planning.

Arguably we have a window of opportunity to change Australian’s attitudes towards charitable gifts in their Wills of some 10 years.  If Baby Boomers start to include more charitable gifts in their Wills now, the sector will start to receive significantly increased income from this generation over the next 10-20 years.

We’d like to hear from you

The Include a Charity campaign is open to your suggestions and ideas.  We’d love to hear your reflections on what you think is needed to change our behaviour.

  •  How can we work together to inspire older Australians to act philanthropically, supporting their favourite causes at the same time as making sure their families are provided for?
  • Are Australian children entitled to challenge their parents from “spending the kids’ inheritance”?
  • Does the Government have a role to play in incentivising more charitable giving through Wills?

You can continue this conversation with Ross and Chris via the comments section below, or chat with them on Twitter via @ChristopherSWIN and @rossandersonIAC


Increasing professionalism: the role of trustee companies in philanthropy

It has been expressed to me on more than one occasion that philanthropy is becoming too professional. I work in the sector, so I try not to take it personally but I think it is time to pick apart the debate a little. We’ve previously tackled on this blog the delicate balance that good philanthropic grantmaking must attempt to strike: a warm heart and a cold eye. There have been a number of good posts and speeches about the nature of philanthropy and the belief that altruism is unique and embedded within human nature. There are also the economists of this world and other theorists who believe altruism, like all other human behaviours, is incentivised and can be moulded into form.

It appears the nonprofit sector, with the exception of a couple of amateur sporting codes (Gaelic football comes to mind), is the final domain of debate around whether increased professionalism diminishes rather than increases the value of a sector. Does increased professionalism, and the development and employment costs it carries, remove much needed funding from the service coal face, or ultimately help to deliver more while building efficiencies?

With relation to professionalism within philanthropy I hear two main complaints:

  1. There are a lot of people making a lot of money out of spruiking the value of professional organised philanthropy and/or;
  2. Philanthropy has lost its benevolent heart and is no longer organic or enjoyable.  In short, it’s become work rather than play.

The question of philanthropy profiteering is more often than not pointed in one direction – trustee companies. With the enormous growth in private ancillary funds and the governance arrangements they carry there is suddenly money to be made in giving away money. Of the 5,000 or so estimated trusts and foundations in Australia more than half are thought to be held within trustee companies.  These pots of funding are held outside of the public view and are managed and coupled with investment and other financial services. To the cynical, trustee company philanthropy is perceived as tax-break grantmaking and the philanthropic services they offer is viewed as being muddled up with, and merely ancillary to, the bigger bucks of the financial services game.

Equally, those who lament the loss of the benevolent heart of philanthropy are genuinely fearful that philanthropy is the latest victim of fads and bureaucracies that add little value and ultimately deter people from giving. In the world of strategic grantmaking, venture philanthropy, philanhrocapitalism and engaged philanthropy, the concern is that the joy of giving has been lost and with it, potential philanthropists.

It would surprise some detractors perhaps to learn that despite concerns around profiteering and the loss of the joy of philanthropy, it appears that financial advisers and trustee companies might actually be playing an important role in both attracting people to and educating people about philanthropy.  A report from the Queensland University of Technology, Foundations for Giving: why and how Australians structure their philanthropy, documents responses from 40 people involved in structured, formalised philanthropy.  Virtually all respondents indicated that advisers and other intermediaries played some role in their philanthropy and the views expressed were generally positive.  In fact, the negative views expressed by respondents around advisers seems to suggest a greater level of expertise in philanthropy and skills in grantmaking would be preferable.

Philanthropy is and always will be a ‘people’s’ game.  Its about people being inspired by other people.  Its about people trusting and believing in other people.  Most of all it is about people wanting to create better lives and communities for others. It is hard to imagine that the heart of philanthropy will be lost simply through increased professionalism. In fact there is mounting evidence to suggest that the opposite may actually be true. Some of Australia’s trustee companies are driving not only increased professionalism within philanthropy, but also a greater diversity in practices and approaches to grantmaking. Some of our most vocal proponents for greater levels of giving among Australia’s wealthy, increased investment in organizational capacity support and improved engagement and evaluation of grantmaking approaches, are coming from within the trustee company sector. The gags many individual philanthropists are compelled to wear when talking about their philanthropy are less evident within adviser circles.

Good trustee companies will be passionate about their philanthropy and the approaches available to their clients.  Poor trustee companies will see philanthropic services as ancillary, and more than likely will charge a hefty price for the pleasure. As is the case with all services, donors should shop around, the cream of the crop will quickly become evident.

The professionalism that trustee companies bring to client services is beginning to have an impact on philanthropy as it is delivered in Australia.  It’s a diversity that the sector absolutely needs.  More choice for donors and potential philanthropists is important as is greater debate on grantmaking approaches and philosophies.

You can follow the musings of Caitriona Fay via @cat_fay on twitter and the eggs via @3eggphil


Gonski calls to philanthropy

In the 24 hours since its release the public response has been mostly positive to David Gonski’s comprehensive report on the funding of Australia’s schools. The independent and catholic school systems, state education proponents and unions are all urging the Gillard Government to act on the recommendations of the report. With 5 billion extra dollars being earmarked by Gonski to fund his reforms it’s not all together surprising.

One of the big surprises falling from the report was the focus on the need for greater partnerships between schools and philanthropy. The recommendations equally acknowledge the role philanthropy plays in our communities and the need to better equip schools to access that funding. We’ve raised some of the issues facing philanthropists wishing to support schools in a previous post and it was great to see some of the important voices on the issue, Ros Black, Michelle Anderson, Philanthropy Australia, Brian Caldwell, Myles McGregor-Lowndes et al, referenced in the Report.

So let’s take a quick look at the recommendations the Report makes on philanthropy and school partnerships.

1. A fund to encourage philanthropic giving to schools in low socioeconomic areas

The report outlines this fund as a DGR entity focused on assisting schools to develop philanthropic partnerships. As a staffed organisation, the fund would be responsible for facilitation of school-philanthropy partnerships while also building the capacity of individual schools to better partner with philanthropy. We have seen a number of organisations working actively in this space. For example, The Australian Council for Education Research (ACER) has established the Tender Bridge with the specific intent of assisting schools to develop the skills and knowledge required to better access and work with philanthropic and corporate partners. ACER and Tend Bridge have also been the key drivers behind the Leading Learning in Education and Philanthropy (LLEAP) initiative that is investigating the impact of philanthropy in education with the aim of building knowledge and improving outcomes for schools and their philanthropic partners.

2. Capacity building

Access is a critical issue for many schools when attempting to interact with philanthropy and other potential donors.

  • Access to philanthropy – understanding who is out there, how to approach donors and what a suitable partnership looks like
  • Access to individuals – building and growing alumni with a view to keeping former students connected to their school communities for longer
  • Access to DGR status– limitations around DGR funds, particularly for state schools means community partnerships must be developed with the non-profit sector
  • Access to knowledge – understanding different types of grantmaking and sponsorship partnership and what reciprocal obligations, if any, they create

Building the capacity of schools to improve their access to all of the above is imperative in allowing school-philanthropy-business partnerships continue to grow.

3. Increase taxation incentives for donations to government schools

Seen by some as a soulless altruism, tax incentives have been highlighted as a potential means to increase donations to government schools. Debate is still hot on whether these incentives actually work but as highlighted in the Report they could at the very least be an important conversation starter between some donors and schools.

There is a good deal to do before the vision and potential of  a more active philanthropy-schools collaboration is realised. Senator Jacinta Collins has been tasked by the Government with examining the Report’s philanthropy recommendations further and to continue a consultation process with the key stakeholders. The great thing however is that philanthropy has been slowly moving towards more sustained engagement with the school sector for some time. Organisations like the former Education Foundation and the Foundation for Young Australians have a wonderful history in this space. The development of the Business Working with Education Foundation is a further example of this movement as is the wonderfully engaged interaction of so many philanthropic funders with the Leading Learning in Education and Philanthropy (LLEAP) research project over the past 12 months. All of this serves as a reminder of the commitment many funders already have to finding better ways of working with schools. Let’s hope Senator Collins engages with them all.

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil.


The LLEAP Survey Report: A conversation starter for education funders

It was exciting yesterday to see the release of the 2011 Survey Report for the Leading Learning in Education and Philanthropy (LLEAP) research study. The Report documents the responses to the inaugural LLEAP survey provided by 300 schools, non-profits and philanthropic bodies working in the education space.

The release of the Report marks the first real milestone for the LLEAP team and everyone involved in shaping the research program. Those organisations and individuals who have given their time generously to be involved in the interview phase, focus groups and in the completion of the survey have done so out of a commitment to finding better ways to work towards improving educational outcomes.

The LLEAP research is the first of its kind in Australia to bring together schools, non-profits and trusts & foundations to examine the role and impact of philanthropy in education.

For me, one of the more eye-opening aspects of the Report relates to the number of disconnects in priorities and target audiences among respondent schools, non-profits and philanthropic organisations. This is perhaps best demonstrated by schools clearly ranking teachers and teacher quality highly in terms of need for support and yet this need is not reflected in the highest priorities of philanthropic and non-profit respondents.

There are three main themes to come out of the Report with respect to the barriers faced by schools, non-profits and philanthropy.  For schools, it’s that their capacity to find and access philanthropic dollars is poor. For non-profits, the issue of short term funding and program sustainability is hindering their capacity to be as effective as they could be. For philanthropy the barriers are what the report refers to as “knowledge issues” (specifically the who, how and why of collaboration and best practice).

The great thing about the Survey Report is that it is a conversation starter.  The survey results are simply that; survey results. How we use and interpret the results however can potentially influence our practices and decision making. We’ll be exploring some of the issues the Report has thrown up on this blog in the coming weeks and would love you to join in the on the conversation.

Caitriona Fay is a member of the LLEAP Project Team. You can follow her musings on Twitter via @cat_fay and get the latest from the Eggs via @3eggphil


When is a wealthy entrepreneur a philanthropist?

I watched with interest a couple of weeks back as word hit that Graeme Wood and Jan Cameron had tipped in $10million to buy the Triabunna woodchip mill in Tasmania. While Wood and Cameron have already established outstanding philanthropic credentials, many environmentalists would argue that the acquisition of the mill, which they intend to transform into an eco-tourism site, is their greatest gift to the community to date.While some media used language to infer the purchase was philanthropic, others simply referenced Wood and Cameron as two wealthy, conservation-minded entrepreneurs. Environmental philanthropy has long been a game of semantics.

So was the purchase of the mill philanthropic?  If we believe that philanthropy is the love of mankind, or the desire to improve the well-being of humankind, then strictly speaking I’d suggest that the purchase certainly came from that place for Wood and Cameron.  Regardless of your beliefs or mine,  both Wood and Cameron would believe deactivating a native woodchip mill is for the benefit of all people; a healthy environment is good for us all. On the flip side, those in the forestry industry have argued that the purchase will lead to jobs loses, will do little to protect the environment and will be an economic failure as an eco-resort. But consensus on the value of the gift has never been required to define philanthropic acts.

The purchase of the mill has got me thinking; is this a sign of  philanthropy moving away from its passive roots? If the purchase of the mill isn’t philanthropy, what is it? Who is it that ultimately gets to define what constitutes philanthropy?

The growth of social enterprises, crowd funding, CSR and giving structures are mixing the world of philanthropy into the world around us. Apart from the Wood and Cameron example, I’ve heard recently of a number of unique approaches to funding and fundraising.  For example Anh Do’s gift to the Australian Cancer Research Council of 1% of his book takings looks set to reap some nice financial rewards – a definite act of altruism and philanthropy.  I’m also hearing more regularly about the establishment of investment circles, where a percentage of income earned goes to the circle’s charity of choice. And what about sponsoring a friend to grow a ‘mo’ in November, is that an act of personal philanthropy (by both the donor and mo grower)?

No doubt, when the figures are compiled at the end of the year many of these unique approaches and ways to give back to the community will not be recorded in our ‘giving’ data. So, how much should be considered philanthropy and how much should we disregard? Does it need to  pass all the public benefit tests before we can celebrate it as philanthropic?

In environment funding, litigation, advocacy and campaigning have always been the bedrock of funding approaches in the United States.  It’s been tougher here in Australia.  The approach taken at Triabunna Mill by Wood and Cameron is regularly at play in the United States and much of the time it is underwritten by philanthropic trusts and foundations. Perhaps what the environment (and the rest of the NFP sector) needs is less philanthropists and more wealthy, conservation-minded entrepreneurs?


Two little BIG words

I hate it when people don’t say thank you. Maybe it’s my upbringing? Whenever we were given anything Mum would always go – “what do you say?” – and me, my brother and sister would chime, “Thank youuuu“. After Christmas, birthdays, or any other occasion which involved us receiving a gift from someone, we’d be sat down to write thank you letters to let people know we’d got and liked their gift. The importance of saying thank you was instilled in us to such a degree that these days if I hold the door open for someone, for example, and am not thanked, it’s not entirely uncommon for me to say slightly sarcastically “no, problem, it’s my pleasure”. Or maybe it’s nothing to do with my lovely Ma and it’s just Curmudgeonly Claire rearing her head again?!

One of the things I love most about my job is when I get to tell someone they’ve been awarded a grant. If I’ve been in contact with an applicant during the review process, they’ll know when a decision’s being taken on their application and they’ll be expecting a call. There’s usually a nervous, anticipatory silence at the other end of the phone which, if I was sadistic, I’d draw out before letting them know the decision, but I’m not so I try to cut to the chase as soon as possible (and because I’m excited to tell them!). It’s so lovely when you hear a delighted “thank you!”. Makes all the hard work so worthwhile.  I can’t tell you how disappointing it is to call someone to let them know they’ve been given thousands of dollars if I get little reaction and no thanks.

I’m not saying grantee gratitude is the be-all and end-all in the decision making process. Of course it’s not. A poorly conceived project isn’t going to be supported simply because an organisation said thank you for a grant in the past. But it is important, and it is remembered. It comes back to that all-important grant maker/grant seeker relationship again (How to make friends and influence philanthropy and Too much or not enough?).

And it seems I’m not the only one that notices when someone says thank you. The June/July edition of Fundraising and Philanthropy Australasia had a story about a donation of $1m to Queensland University of Technology, recently gifted by Peter and Heather Howes.

The Howes’ have a long association with QUT: both are ex-QIT students (QUT’s immediate predecessor) and have a daughter who graduated from QUT; both were lecturers at QIT; and Peter was a member of QUT‘s School of Management Advisory Board.  They first contributed financially to QUT in 2009 and 2010 in its annual alumni appeals, when they gave relatively small amounts of money in support of the Learning Potential Fund – an endowment fund to support bursaries and scholarships for QUT students in financial need.  They began discussions with the University about the potential for them to make a larger gift after July 2010 when they sold the very successful human resources consultancy business they had jointly founded in 1982 (the sale giving them greater capacity to consider giving more significantly to QUT).  Before the year was out, these discussions came to fruition in the form of The Howes Family Gift: a $1m donation which was added to the larger LPF endowment, but to be used to fund discrete Howes Family Learning Potential Scholarships for disadvantaged students.

One of the factors behind the Howes’ decision to increase their philanthropic engagement with QUT was the phone calls they received from LPF fundraising staff thanking them for their 2009 and 2010 appeal gifts. Apparently this was the first time they’d got such personal thanks from an organisation they’d given financial support to.  As a consequence of this very simple gesture, the very neediest of QUT students can now apply for annual scholarships of $5,000 to support the cost of their study (more than standard LPF scholarships and bursaries offer), and there is also talk of the Howes contributing more money to QUT in the future to enable more scholarships to be offered. I wonder if LPF fundraising staff had any idea how powerful those two little words would be?!

While we’re on the subject of saying thank you…. thank you!!  Since we launched 3eggphilanthropy back in April, we’ve had almost 2,600 views of our site and enjoyed some fantastic thoughts and opinions on the blog site, and on Twitter and Facebook. We’ve also had some amazing contributions from fabulous guest bloggers which added so much to the conversation. It’s been a fantastic first couple of months and we look forward to everything that’s to come.  Scrambled, boiled, or poached….  Thanks again!!

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