Historically, a number of factors have influenced the way we give, how much we give and why we give. Looking back on our past, can we get any hints as to what might lie ahead for philanthropy in Australia? And how will the future we see ahead be shaped by – or give form to – the philanthropic sector?
Among the big motivators for past philanthropists was the desire to give something back to the community. Sidney Myer, in his will, expressed the desire to benefit “the community in which I acquired my fortune”, and Sir Ian Potter said that he set his Foundation up “to give something back to Australia”.
Another substantial influence is the presence of tax and legislative incentives to giving. The existence of extra tax incentives in Victoria during the twentieth century contributed to the development of a robust philanthropic sector in that state, enabling individuals to provide for the establishment of charitable trusts in their Wills.
This image originally appeared in Issue 31 (Autumn 1997) of our Journal.
And personal passion also played a part. From Dafydd Lewis’ desire to provide for young men the university education he himself had been unable to attain, to Norman Wettenhall’s sale of his treasured natural history book collection to fund the establishment of his environmental-focused foundation, the application of personal passions has driven philanthropists to extraordinary focus in their efforts to benefit the community.
More recently, Australians have displayed an incredible generosity in their donations to benefit the victims of the December 2004 Indian Ocean tsunami. Over $280 million was donated by the Australian public to the various appeals related to the tsunami, making Australia one of the most generous responders to the disaster.
The Giving Australia report of October 2005 reported that most Australians give as believers in a particular cause, and in response to requests; wealthy Australians often give in response to the social contract idea that they have a responsibility to support worthy causes, and like to give to new and innovative projects or those where it is possible to put their own stamp on things.
So what are some of the trends we can see lying ahead? Will the philanthropists of the future be motivated by the same driving forces as those of the past? Let’s look forward to the end of this century and see what lies ahead.
Our Philanthropic Future
Of course, it’s very likely that many of the events which will shape Australia’s future are unforeseeable; it is impossible to predict with accuracy. However, extrapolating from studies and projections done by such entities as the Australian Bureau of Statistics and the US-based 2020 Project, here are some of the future trends that may shape our philanthropic future:
A Growing Population
Australia’s population is expected to increase to between 23.0 and 31.4 million people by 2050-51. There may be implications for our environment in providing infrastructure, water and arablre land for this larger population.
An Ageing Population
The Australian Bureau of Statistics, in its Yearbook 2006, estimates that the number of Australians aged over 85 years is likely to grow from 1.4% of the population today to 6% of the population in 2051. The number of Australians with dementia is also expected to increase dramatically ,in line with the ageing projections; Alzheimer’s Australia predicts that in 2051, 2.3% of Australia’s population may be suffering from dementia.
This may lead to a large proportion of the “intergenerational transfer of wealth” being used by these individuals to cover the costs of health care and aged care, preventing the hoped-for flow into charities and philanthropic foundations.
The recent pledge by Warren Buffet to donate 85% of his fortune to the Bill and Melinda Gates Foundation highlights one potential trend: the rise of powerful entities which are privately funded and have more financial clout than many nation states. With the addition of the Buffet gift, the Gates Foundation will be giving away more funds per annum than the GDP of some nations. The power and influence of individual donors, able to operate globally and exercising considerable economic power, is a previously unforeseen phenomenon.
The advent of the Internet has changed the way we operate and communicate. More importantly for philanthropy, it has changed our expectations for timeliness and delivery of information. Scrutiny of organisations is easy, and donors can easily move on to another project or recipient if they don’t like what they see. We expect to find annual reports, distribution reports and other information instantly online. And donors can find as much information as they need to do their own research into problems or develop their own ideas. If anything, there is too much information available; filtering and prioritizing information in the face of such overload is an issue for many foundations.
Already we are seeing more public awareness and concern over environmental issues with global implications; climate change, peak oil and drought. With the understanding that such issues will need massive and rapid attention to find solutions, much philanthropic money may be channeled into environmental concerns in the future.
Philanthropy in Australia is burgeoning. Since the Prescribed Private Fund legislation was introduced in 2001, over 450 new foundations have been created. Over half of the foundations now in existence in the United States have been created in the past 20 years; we may see a similar growth here as more people discover the joy of giving. Many of the donors creating these foundations are younger, self-made businesspeople who see themselves as part of a global, rather than local, community; they also are well-informed, determined and eager to put their expertise as well as their money into their philanthropic endeavours. There are also new models of philanthropic organisation, such as the Foundation for Rural and Regional Renewal, which cannot be simply classified as private, family, corporate, community or government foundations.
Barber, Stella. Sidney Myer; A Life, A Legacy.
Yule, Peter. Ian Potter: Financier, philanthropist and patron of the arts.
What do you think about the future of philanthropy? Leave a comment in our blog and let us know what you think Australia’s philanthropic future will look like!
Feb. 16, 2007
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