Can we teach old dogs new tricks? Increasing giving through Wills
Posted: 30 July 2012 Filed under: Uncategorized | Tags: Charity, death, family, giving, philanthropist, philanthropy review, Swinburne, Tax, Wills 12 Comments »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
The never changing world of philanthropy
Posted: 31 May 2012 Filed under: Centre for Effective Philanthropy, culture of giving, grantmaker/grantee relationship, grantmaking, NFP, philanthropic sector, Philanthropists | Tags: funder, giving, governance, Grantmaking, grantseeker, isomorphism, perception, philanthropy, professionalism 9 Comments »New approaches to solving old problems is the innovation mantra of more than one philanthropic foundation in Australia. Recently this got me thinking about the different approaches operating within the grantmaking space in Australia. With a few notable exceptions aside I think it is fair to say that most trusts and foundations operate in a pretty similar procedural manner. So while funders ask grantseekers to innovate in their practices there is little experimentation around grantmaking practices. Can we assume this lack of innovation from funders in their grantmaking approaches is due to the fact that funders have got their processes perfected? I wonder what grantseekers would say to that?
So what do grantseekers think of Australian funders? Officially we don’t really know but I doubt that is because applicants and grantees don’t have opinions. The unfortunate reality is that there is little opportunity provided for grantseeker or grantee feedback about a funders approach to their grantmaking. In the United States the Centre for Effective Philanthropy has developed the The Grantee Perception Report® (GPR) which provides grantmakers with comparative and frank feedback on how grantees think they are performing. Some funders even choose to make their reports publicly available. The GPR allows philanthropic boards to assess their performance as funders, this in turn helps them to work more effectively with grantees in the pursuit of their mission.
If it walks like a duck and talks like a duck…
So is the answer to better practices and diversity in grantmaking approach as simple as the provision of a feedback loop? While comparatively speaking there are greater levels of diversity in philanthropic practices across the United States it could be argued that ‘sameness’ is still the dominant feature of their foundation sector.
In a 2009 post on her philanthropy blog, Stanford University’s Centre on Philanthropy and Civil Society Visiting Fellow, Lucy Bernholz, questioned why, when there is so much that people outside of the foundation field would change about how philanthropy functions, has so little changed in past 100 years. She contends:
“It doesn’t seem possible that these practices survive because they work well, please the customers, or even please the board and staff who choose them and re-create them. Institutional isomorphism is one of those graduate school concepts that is… true to life – organizations mimic like organizations, even when it doesn’t necessarily serve their purposes” (2009).
Isomorphism is basically the much flashier way of saying ‘sameness’. It should also be said that not all about isomorphism is bad. If you look like a duck and talk like a duck chances are other ducks are going to accept you. These behaviors are really evident in the corporate world where organisations that look like each other (in terms of board structure, staffing structure, business philosophies) will more easily attract investors, customers and secure loans. In short isomorphic behavior gives many organisations legitimacy.
There have been studies that suggest that isomorphism within the nonprofit sector is not as evident as it might be in the corporate world. I’d contend however that traditional philanthropy is the exception to that nonprofit rule and there are a couple of reasons for that. Think of the really big Australian philanthropic foundations, even most of the small ones too – they seem to operate and look pretty similar to one another in their grantmaking (e.g. application process, closing dates, reviews, board meeting, results etc). Objectives and priorities might be different, but processes and board structures are fairly similar. Part of this is driven by fiduciary responsibilities. Trustees of foundations need to concerns themselves first and foremost with management of the assets – the upside is that if they do this well they can give away more money. So with grantmaking merely a by-product, it’s not hard to understand why diversity in grantmaking approach is not as evident as it might be.
Competition in the corporate world drives innovation and new behaviours. In the nonprofit world, there is competition too for funds as well as the mission driven approach that dictates how NFPs work and the skills sets that they have on their boards and among their staff. In philanthropy that competition doesn’t exist and compliance is focused almost solely on tax and law. So how do we drive diversity? How to do celebrate those foundations that invest more in understanding that sometimes what is really important is the way you give? Perhaps a good starting point is to accept some feedback from those we work with most closely, our grantees. We also need to start listening and learning from those funders who are working a little bit outside the box. What have been their experiences, successes and failures? How did they bring their boards on that journey?
So what do people think really good models of philanthropy look like? Can we start to compile some of the features that not only lead to better practices in philanthropy but greater impact on the ground?
You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil
Increasing professionalism: the role of trustee companies in philanthropy
Posted: 3 May 2012 Filed under: Australia, culture of giving, grantmaker/grantee relationship, grantmaking, philanthropic sector, Philanthropists, Uncategorized | Tags: altruism, Australia, capacity building, donor, giving, Grantmaking, philanthropist, philanthropy, professionalism, trustee company 6 Comments »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:
- There are a lot of people making a lot of money out of spruiking the value of professional organised philanthropy and/or;
- 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
2012 Trends in Philanthropy: Data
Posted: 14 February 2012 Filed under: Australia, crowd funding, culture of giving, evaluation, grantmaking, NFP, philanthropic sector | Tags: ACPNS, Blueprint 2012, data, giving, Grantmaking, Lucy Bernholz, philanthropy, QUT Leave a comment »This is the final installment of our three-piece post examining what 2012 has in store for philanthropy. We’re taking our lead from Lucy Bernholz’s Philanthropy and Social Investing: Blueprint 2012 which notes three big shifts in store for the sector this year. Today we’ll be taking a look at data and it’s role in creating the social good.
Data and the desire to accumulate it tends to fall in and out of fashion in Australian philanthropic circles. Opponents compare the collation with the chains of government bureaucracy or worse still, that overly self-indulgent practice of ‘naval gazing’. On the flip side of the argument you have proponents espousing data as a commodity every bit as important as the currency distributed through grants.
Gone are the days of data being considered simply numbers on a spreadsheet. The Blueprint paints a wonderful picture of the changing face of data and how we use them:
In reality, anything that can be digitized can become data. This includes items that start out digitally – photos, videos, cell phone calls, text messages, Facebook posts, and blog comments. It also includes things we convert to digital form – books, old newspapers, films, music, and the content of our file cabinets. Once this material is digitized and we can click on it, “like” it on Facebook, or share it via Twitter with friends we create another layer of data.
Data allows for the impact of our philanthropy to be captured, shared and understood in ways like never before. Equally we can better and more quickly measure the campaigns people respond to and as a result help to bring resources and effort to major issues more quickly. As individuals we can donate via text messaging (not as well as we should be able to here in Australia), crowd funding, Twitter, Facebook, online newspapers, and an array of other web tools – all of which leave a trail of giving data behind. We respond and interact with data in today’s world – we are the creators the next role is to become the curators.
So has philanthropy in Australia responded to this changing landscape of data collection and use? In grantmaking philanthropists have long backed data collecting and building in the area of medical research but the sciences have a longer history of utilizing the power of data in their research and storytelling. For the community sector the sell to philanthropy is much tougher. Research, evaluation and data collection doesn’t excite philanthropists in the same way that getting tangible things done on the ground does.
The community sector is not alone in being under resourced to measure and understand its own impact. The philanthropic sector, which houses huge amounts of data, makes precious little use of any of it. The tide is slowly turning however. The Centre for Social Impact is undertaking mapping work, led by former Philanthropy Australia CEO – Gina Anderson, to examine where some of Australia’s major trusts and foundations are making gifts. Research at Queensland University of Technology’s Australian Centre for Philanthropy and Non-profit Studies is exceptional and building, while Swinburne University continues to grow its credentials in this space. All of these are positive advances but more can be done and is required.
Data is powerful. It helps us to tell our stories. To excite and teach us. Data helps us to build a picture of where we are as a society and where we might be headed. How we use and interact with data in 2012 has the potential to influence the trends we will be seeing in 2013. Is Australia’s philanthropic sector ready for this shift? I have my doubts but there is a slow movement occurring. Let’s revisit at the end of the year.
If you have not already done so, head to the Philanthropy 2173 Blog to get your hands on a copy of the Philanthropy and Social Investing: Blueprint 2012
You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the Blog via @3eggphil
2012 Trends in Philanthropy – Political Advocacy
Posted: 24 January 2012 Filed under: Advocacy, Australia, culture of giving, grantmaking, NFP, philanthropic sector, Philanthropists, USA | Tags: Aid/Watch, Blueprint 2012, Changemakers, Charity, citizens united, giving, Grantmaking, law reform, Lucy Bernholz, philanthropy 1 Comment »
As promised this post is going to continue to examine some of the trends for 2012 highlighted in Philanthropy and Social Investment Blueprint 2012 – the annual industry forecast produced by Lucy Bernholz. In my last post I looked at the first of three major shifts identified in the Blueprint, today I’ll be moving on to trend number two: the implications of the US Supreme Court‘s Citizens United ruling on philanthropy and social investing.
There is no doubt that grantmakers here in Australia have a lot to learn from philanthropy overseas. I am often reminded however that much of how and why we practice philanthropy is unique. By constantly casting an eye towards North America and Europe we risk failing to recognise and value the innovation taking place in our own backyard. So what can we here in Australia possibly learn from examining the potential implications of the Citizens United US Supreme Court decision?
Before I address that question in detail, it probably serves to give a quick rundown on what that Supreme Court decision actually amounts to. In short Citizen United removed prior restrictions on spending by corporations on election campaigns; in essence allowing these bodies the similar first amendment rights to free speech as everyday American citizens. These newly available dollars will certainly come into play in 2012, the first presidential election year since the ruling was handed down. Rather than promoting and opposing political candidates or parties directly, much of the funding from corporations is likely to flow via non profit organisations advocating on issues that serve their purpose. It is the implication of that funding process has some interesting cross over with Australia.
Around the same time that Citizens United was taking it’s case to the US Supreme Court, here in Australia an international aid watch dog called Aid/WATCH was taking its fight to hold on to its charitable tax exemptions to the High Court. In Australia, like in the US, the judges ruled in their favour. The decision asserted that Aid/WATCH, as an independent watch-dog examining how aid is distributed, may well be involved in political advocacy. Because the generation of public debate created by Aid/WATCH through their advocacy focused on the relief of poverty through foreign aid, the Judges ruled that it should not be excluded as a charitable activity. This ruling opened up direct funding of political advocacy by charitable trusts and foundations, ensuring that neither the donor, or the non-profit they were supporting, put their charitable status at risk. The Eggs have posted previously on the new place for advocacy in the Australian non-profit sector, but perhaps we have not explored the potential implications for donors in full.
In an environment more open to political advocacy from our non-profits, what are the potential implications on donors and ultimately donations? In the US, it’s likely that the Citizens United decision will lead to not only more political advocacy from non-profits but also more non-profits being created with a focus on raising money for or against their preferred candidates and issues. Here in Australia, the likelihood is that we’re gong to see a greater intensity of out and out advocacy. For some funders, the thought of seeing their long supported charities engaged in the political might be too much to bear. For other funders it will open up spheres of influence like never before.
I’ve spoken with people on both sides of the advocacy fence, those that find philanthropic support of political advocacy unseemly and those that see it as critical vehicle in mission based philanthropy. Not all philanthropic organisations in Australia believe or want to be mission driven, the warm heart of benevolence for many is still the greatest motivator. There will always be a place for both. I do sense however, that the new wave of youth and online philanthropy in this country will drive a new era of donor funded advocacy.
Should you wish to learn more about the trends in philanthropy and social investment for 2012, I’d encourage you to get your hands on a copy of Blueprint 2012:
- Hard copies from Lulu
- PDFs at Scribd
- Kindle version from Amazon
- eBook from Smashwords. Also available for Amazon Kindle, B & N Nook and others.
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
Posted: 8 November 2011 Filed under: Australia, culture of giving, evaluation, grantmaker/grantee relationship, grantmaking, NFP, philanthropic sector, Uncategorized | Tags: ACER, education, giving, LLEAP, Non-profit, philanthropist, philanthropy, Schools, Tenderbridge 3 Comments »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
Prevention at the expense of the cure
Posted: 29 September 2011 Filed under: culture of giving, disadvantage, grantmaking, philanthropic sector, Philanthropists, Transparency | Tags: ambulance at the bottom, Australia, cure, Fence at the top, giving, Grantmaking, philanthropy, prevention 1 Comment »Let’s face it, these days it’s simply not in vogue to be considered a philanthropist (or philanthrocrat) driven by a spirit of benevolence. We have entered the era of the venture philanthropists, the philanthrocapitalists, the tactical philanthropists. In philanthropy, strategy is now the name of the game. Philanthropists and their foundations are finding smarter ways to give and more innovative ways of funding for impact. If this group of strategy driven philanthropists had a mantra it would likely be prevention, prevention, prevention. But when everyone wants to be the funder helping to build the fence at the top of the cliff, what does that mean for those people who need the ambulance at the bottom of it?
The philanthropic sector in Australia is racing towards a new level of maturity. It’s vastly more professional than it was as little as five years ago. But professionalism has led to a recognition that supporting prevention and mitigation programs offers greater bang for the funder’s buck. There is no disputing the fact that prevention is less costly than the cure. However, if we as a sector are encouraging a greater focus on prevention, perhaps it’s important to stop for a moment and consider at what cost?
Photographer : Cybele
I’m fortunate enough to work for a foundation that has the capacity and the inclination to fund across the grantmaking spectrum. Funding programs that seek to mitigate against homelessness are great, but there is still a desire at Board level to make sure issues of food security and the need for refuge are also addressed. For some, funding the ambulance at the expense of the fence might appear counter-productive but we’ll always need the balance.
I wrote recently about the growing recognition that great philanthropists can balance the head and the heart. Perhaps the reality is that the benevolent urge to help those in need is the heart of funding. Trying to make progress on the problems and difficulties (a great post here on the difference) that affect our communities is more a challenge for the head.
I remember reading once that Bill Gates sat his young daughter down and tried to explain to her the work the Gates Foundation was doing to find a vaccine for malaria. As they flicked through pictures of the devastation caused to those individuals already struck down she asked ‘who is helping them?’. It was a reminder to Gates, and should be to all of us, not to forget those with immediate and real need for support. It’s important that we don’t leave behind those organisations working at the bottom of the cliff for the sake of increased bang for the buck.
For some funders, prevention is the best way to give within their limited resources. For others, their philanthropy will be driven by a desire to address the need they see every day. I don’t ever think we’ll get to a stage where all funders are focusing prevention at the expense of the ‘cure’. We do however, need to be careful not to dismiss programs and organisations working to provide immediate support,as having no place in strategy driven philanthropy.
As a sector, philanthropy needs to be more introspective. Perhaps it’s time to shift our focus from funding where government can’t or won’t and start looking more closely at where the philanthropic gaps are. That requires new levels of collaboration and a transparency around our foundation missions and objectives. If we can get the balance right and find a way to solve problems and service our society’s greatest difficulties, then as a sector we will be more impactful.
You can connect with Caitriona Fay on Twitter via @cat_fay or any of the eggs via @3eggphil.
The administration obsession
Posted: 9 September 2011 Filed under: Australia, grantmaker/grantee relationship, grantmaking, philanthropic sector, Transparency, Uncategorized | Tags: ACNC, adminsitration, Charity, effectiveness, giving, transparency Leave a comment »You may have seen a couple of articles run in the Sydney Morning Herald a fortnight ago examining the administration and transparency of some of Australia’s better-known celebrity foundations. In the firing line were the McGrath Foundation, The Shane Warne Foundation, the Cathy Freeman Foundation and others. The journalists rightly point out a number of inconsistencies regarding the required public transparency of the non-profit sector here in Australia. Both articles contend that without adequate transparency the donating public can never know how much of their dollar is actually making it to their cause of concern.
The inconsistencies raised in the articles are nothing new to non-profits. The sector has long struggled under the burden of a fragmented regulatory system and been crippled under the red tape of multiple compliance obligations. It’s hoped that the establishment of the Australian Charities and Non-profit Commission (ACNC) will help to reduce the burden on the non-profit sector while providing a new level of transparency sector wide.
What the two articles also helped to highlight was that there continues to be a lack of wider public understanding around administration costs in the non-profit sector. Held up for high praise were those organisations with the bare minimum of administration costs, while those with professional staff and overheads were the inferred to be less effective and somehow less impressive.
It might well be that those organisations highlighted in the article are ineffective but examining administration and fundraising costs will only paint a partial and sometimes misleading picture.
I’ve worked for a grantmaking organisation that was incredibly strong on applicant organisations submitting ‘real world’ budgets. A budget submitted without a provision for administration costs and contingencies was considered poor, full stop. Administration costs were considered realistic if they were in the 8%-25% field (depending on the project type). Any lower or higher and it deserved some prodding. Equally, it was considered poor project management if an applicant didn’t factor at least 10% of the total project costs for contingency costs.
For that particular grantmaking organisation, low administration costs increased the risk of the project operating at the margins, which in turn increased the risk of the project failing. As a grantmaker they decided to mitigate against that risk. When I called organistions to ask why they had submitted application budgets with low or no administration costs their responses were generally the same – most thought putting the actual administration costs in the budget would reduce their chances of success with the grantmaker.
I’m reluctant to suggest that there is any ‘right’ range for administration fees. What’s really important is that donors examine the administration figures within the context of the organisation’s activities and mission. There is no one rule. As a donor you need to be more savvy and a donating public we need to expect that administration costs are a reality for charities.
I’d also encourage donors to recognise that staff within the non-profit sector deserve to be adequately reimbursed for the work they do. One of the great tragedies of non-profit sector is our high staff turn-over, and inadequate remuneration is partly to blame. Working in the most challenging of areas, doing the toughest of work, it’s imperative that the non-profit sector hold on to good staff. That includes senior managers and CEOs whose leadership is so valuable in ensuring the ship is pointing in the right direction.
You can follow the musings of Caitriona Fay on Twitter via @cat_fay
Two little BIG words
Posted: 6 July 2011 Filed under: Australia, culture of giving, disadvantage, grantmaker/grantee relationship, Philanthropists | Tags: disadvantage, giving, Howes Family Learning Potential Scholarships, Peter and Heather Howes, philanthropist, philanthropy, QUT, The Howes Family Gift 3 Comments »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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It’s a question of validity
Posted: 5 July 2011 Filed under: AEGN, NFP, philanthropic sector | Tags: AEGN, capacity building, Coding, education, environment, giving, Grantmaking, philanthropy, Philanthropy Australia, transparency Leave a comment »I’ve noticed lately a few really interesting and exciting surveys are circulating the philanthropic sector, trying to track how much and where Australian philanthropy is giving. I’ve enjoyed seeing an increasing research presence in the sector. It feels in many ways that it’s the next phase of sector growth and maturity, as we attempt to learn more about our giving practices as a nation.
Last week I attended the Australian Environmental Grantmakers Network (AEGN) 2011 Conference. The AEGN is a great organisation supporting environmental philanthropy in Australia and the conference was a special day focusing on Indigenous environmental granting. Sitting at the conference among a committed band of environment funders I was reminded that it was not long ago that the AEGN launched the 2010 Green Philanthropy Report. The report, supported by a survey filled in by a a touch over 50 funders, demonstrated to the Board of the AEGN that they needed to up the ante in trying to attract philanthropists to environmental grantmaking. That is what capturing this basic information should do, it should inform our practices, our approaches and our priorities as a sector. We should be looking at areas to improve and grow but data is critical to understanding the current landscape.
It is this need for data that has got me thinking. What is the quality of the information philanthropy is currently capturing? Sure, it’ easy to talk broad figures e.g Foundation X distributes $1million in grants annually. But what if we wanted to scratch the surface of that giving a little more, is philanthropy in Australia currently equipped to provide accurate data genuinely reflective of its giving practices? I work for a Foundation that has spent the better part of the last 3 years trying to better ‘code’ or ‘categorize’ the grants we make. I can tell you it’s not been an easy process, there have been a lot of staff hours poured over what information we should capture and still we are left with the reality that the coding process is ultimately subjective. One persons ‘Youth’ program is another persons ‘Education’.
Thankfully Philanthropy Australia (PA) has provided an outline for a grant classification system that encourages funders to capture data using a common sector language. PA’s website states that The intention (of the classification guide) is to standarise the terms used across the Australian philanthropic sector as far as practical, so that grantmaking can be documented and useful statistics on philanthropy collected in ways that contribute to shared understandings. I highly recommend this document as a starting point for those philanthropists or trusts and foundations looking to better capture their data.
While I know the process that my organisation has undertaken to record and capture basic data, I am less clear about the practices and consistencies across the rest of the sector. And this is, in a lot of ways, the source of some of my discomfort. We as a sector need to be able to rely on the validity of the data that is being captured. Equally, if we want researchers to continue to take an interest in where and who we are funding, then it’s important that they too feel that foundations aren’t working to a guesstimate. Again and again I feel it comes back to the issue of philanthropy needing to invest in itself to improve it’s value and credibility to the not-for-profit sector.
I’d love to hear your views on how the sector might better capture its basline data. The work of organisations like the AEGN and Philanthropy Australia in undertaking membership surveys, is slowly helping to shape and influence practice. I just hope the we can provide them and our research partners with increasingly better quality data.
You can follow the musings of Caitriona Fay on Twitter via @cat_fay
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