Paul Ramsay Foundation's new strategy

The road towards breaking the nation’s cycle of disadvantage

Two weeks ago the Paul Ramsay Foundation revealed its new strategy that aims to break the cycle of disadvantage in Australia. It is the result of intensive consultation, dialogue with similar-sized foundations in the US, deep reflection and consideration of Paul Ramsay’s own legacy. The outcome is a significant statement from Australia’s largest philanthropic venture and sets out a road map that not only aims to support the Foundation’s current partners through the COVID-19 crisis but also, in the longer term, identifies key projects that go to the heart of tackling intergenerational poverty.

The strategy is also the culmination of the foundation’s own journey in the past 12 months, growing from a small team of about 10 people to an organization of close to 40, headed by the former Melbourne University Vice-Chancellor Professor Glyn Davis, who now finds himself on the other side of the table – disbursing funds, not asking for them. But as appealing as it sounds in theory, it’s not so easy in practice.

“[P]eople think it must be wonderful - you’re handing out money but you’re spending most of your time carefully and thoughtfully and collaboratively explaining to someone why you’re not going to fund them. And that’s not a lot of fun but it’s absolutely essential work for a foundation,’’ Glyn says. “On the other hand, you can say: ‘Yes’, you can support some superb work. You get to support, encourage and broker some really exciting projects that will make a difference to people and you get to work with the brilliant people…And people who are willing to work in our sector and work for less than they could earn in other places because they care. How could you not be utterly inspired by that?’’

The Foundation’s strategy is underpinned by extensive research from a range of experts, including the Melbourne Institute’s HILDA survey. The shocking statistic at the heart of the disadvantage discussion is 13 per cent of Australians – or about three million people – are dealing with intergenerational poverty. Girls born into the lowest income families have only a 14 per cent chance of breaking out of poverty. Boys have only a slightly higher chance, of 22 per cent. The data helps frame the problem but what lies beneath the statistics?

“What are the key drivers which we talk about [with] cycles of disadvantage,’’ Glyn says. “There’s not one, there’s lots – how do they interact and then importantly where can we best use our money to make a difference, to get people out of one of those cycles. There’s an infinite number of things you can do, so how do you focus, which is why we’ve gone for a relatively narrow range of programs.’’

A key to understanding the Ramsay approach is appreciating how important the research was in helping the team work out what are the differences between the symptoms of disadvantage, and its causes. Making the distinction is critical to being able to work out where to target the funding.

“We identified some problems early on that the research said “Yes, it’s a real problem but it’s not one that you can make a difference in’. That’s important because it says: ‘Don’t go here,’’ Glyn explains

Glyn Davis, CEO Paul Ramsay Foundation

“One of those is childhood obesity – it’s a fabulously accurate marker of disadvantage …[but] it’s a symptom, not a cause. If you can solve childhood obesity, you haven’t solved why there is childhood obesity. In other words, it’s the wrong problem. It’s not that it isn’t really important, it’s just that it’s not the right way into the poverty question. It’s so closely correlated with poverty and so closely correlated with early childhood difficulties, so you have to address those issues and they might make a difference to obesity, but you don’t start with obesity. That’s what the research was so helpful for us. And that’s how we ended up doing the specific things we focused on.’’

What that looks like in practice is building partnerships with organisations that can address four ‘off-ramps’ in the cycle of disadvantage – transitions to employment, a chance to learn, criminal justice and thriving communities. The Foundation is also embarking on its first foray in to impact investing and social enterprise, by providing capital for Synergis (a fund supporting highly quality housing for people with a disability); Living Learning (a social impact bond that supports services for young people with mental health conditions who have fallen out of education and employment) and supporting intermediaries including the impact investment operation, For Purpose Investment Partners.

The Foundation has already committed $30 million for bushfire recovery and $9 million for the first phase of COVID-19 funding for vaccine research and to support vulnerable communities. It has also established a Sustaining Our Partners taskforce to help current partners weather the health crisis and its attendant financial and operational problems. The commitments this year already total $84 million.

No one engaged with issues of equity and fairness is unaware of the pressing expectation that the global pandemic will pose greater challenges for those who are already vulnerable.

“Our strategy was framed before COVID, but it becomes more relevant because of COVID, not less,’’ Glyn says. “There will be much higher levels of unemployment, there will be much higher levels of poverty and we will try to address those very specifically through the filter of disadvantaged communities, disadvantaged people, [and] how we can help them.’’

These are big picture problems and long-term commitments. So where is government in this equation, especially given its central role in providing some financial support through the health crisis? What role does it play in this environment, where charities and not-for-profits are so active in supporting the on-going functioning of civil society? Glyn Davis observes that charities in Australia pre-date governments, and they have worked on alleviating poverty and childhood disadvantage for more than 200 years. Over time, governments have taken on those areas where charities used to be the sole provider and supporter.  “Increasingly, government defines what charity does,’ Glyn says. “So if government does it, there’s not a lot of point in charity doing it. So charity tends to cluster around the edges of what government decides to do, and that can be a good or a bad thing. One of the consequences of that is in a sense the disparity becomes stronger.’’

Inevitably, the size of the Commonwealth purse makes it the biggest player in providing those social services. And it is also unsurprising that government is the first port of call for many Australians asking for help. But that government primacy doesn’t always reassure charities, whose on-ground experience gives them a legitimate place to argue about what their sector needs. “It’s why sometimes you get tension between government and charity because charity has a strong view about what’s not being done and government don’t like feeling they are being pressured in to doing things they don’t want to do,’’ Glyn says. “And governments also draw boundaries – they just say, ‘We will do this, but no further.’ Charities end up carrying the burden of what’s left.’’

Fundamental to that tension is the question of what is charity’s role and what is government’s role? For Glyn, the question is “an overtly political question’’ that has to be solved by political argument. “There’s no other way to solve it in a democracy. And it means charities have to engage in political conversations and be willing to criticize and be willing to argue the case for what government needs to do, which governments don’t take well to in general,’’ he says. “And it doesn’t matter who the government is, no one likes to be criticized.’’

So does that mean charities have to be advocates? “Absolutely. I’m strongly of the view that it’s part of what they (charities/NFPs) have to do. And I recognise that’s not popular. Governments don’t appreciate it …and they have a view that charities should look to their own business,’’ Glyn says. “And some of the arguments we’ve had recently about changing laws, and trying to define what is and isn’t acceptable for a charity to say… I’m not for a moment suggesting charities should be partisan, but they do have to speak up on matters of public policy and they do have to point out we are leaving some Australians in the lurch and they do have to have views about what would make a difference.’’

There are some compelling examples, however, of how well governments, charities and not-for-profits and local communities can work together to innovate and drive change. Glyn identifies two recent examples – the Maranguka Justice Reinvestment Strategy that has helped transform Bourke in NSW (and won Philanthropy Australia’s [PA] 2019 Best Large Grant award) and the Our Place program at Melbourne’s Doveton College that embraces a holistic approach to education. These projects provide Glyn with some optimism about how co-operation can happen without conflict and focus on how charities, governments and local communities can find new ways to work together.

The Paul Ramsay Foundation is by far the nation’s biggest giver. The Philanthropy 50 list, compiled by PA board member and co-founder of JB Were Philanthropic Services Division John McLeod, put the Foundation’s grants for 2018-19 at $153 million, double the Mindaroo Foundation in second place. What accompanies such prominence, is a healthy dose of expectation. “I hope we’re not going to be the biggest forever. I hope Australians develop a whole range of foundations. You don’t want to stand out,’’ Glyn says.

“And if our mission is disadvantage, then you want other foundations to have different missions, so the people on the ground doing the work in charities have a range of funding sources and go to different people instead of sweating on what one organization might think.’’

Glyn knows the Foundation has a significant opportunity to make a difference to the nation.

“We are very fortunate to have the money Paul Ramsay left and he also left no conditions: he gave us a completely open slate to do this well and that’s an extraordinarily rare opportunity,’’ he says. “We have to use that money well. And we have to be seen to be using it well. That’s what we’re going to do. And others can make a judgement.’’

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