Systems Change

Leaving a legacy that helps regions grow

This is part of a series where we explore system change in action – what drives it, how it happens and its outcomes. At the centre of the series is the question – what can we do to create lasting social change?

When it comes to growing giving in regional and rural Australia, there are not many new ways to explore how best to tap into generosity of the nation’s regions. But shimmering in the distance is the notion of a bequest campaign, a transfer of wealth that could potentially unlock millions of dollars in the passing of wealth between generations.

The idea has great potency in philanthropy. In the US, estimates are as high as $30 trillion for the transfer of wealth to younger Americans during the next few years. The estimates in Australia are similarly large - $3.5 trillion over the next 20 years, growing at 7 percent a year. But the practicalities are complex.

For Sarah Thompson, Executive Director of the Into Our Hands Community Foundation in north-east Victoria, the transfer of wealth in her region offered significant potential but also its share of difficulties. But it is an option that had to be considered.

“At the moment growing philanthropy in the regions is a struggle,’’ she says. “It’s not easy to live in small communities where you raise money and you’re accountable to them. This is a way of trying to put more tools in the toolbox essentially. People are doing the same work as those in the cities, getting paid less for it and the commitment from boards, for example, is terrific.’’

And then you alight on the notion of an intergenerational household wealth transfer.

“It was a big idea. It was an idea that was going to take the organisation (Into Our Hands) on a new journey but now looking back, it’s not such new journey, but at the time it was such a big idea – and I was thinking how are we going to execute this?’’ Sarah says.

Although the transfer of wealth idea had been kicking around for some time, Sarah credits Matt Pfahlert – a local social enterprise entrepreneur (Australian Centre Rural Entrepreneurship) and former Churchill Fellow – for starting her thinking about what it could look like.

“So, when I came to town and took the job, Matt knew I understood the charitable giving stuff … and he said Into Our Hands was the perfect place for us to execute this bequest campaign,’’ she says.  “We had a couple of conversations about that and at that stage it was very abstract and conceptual.’’

The next steps were slow and steady: long conversations with US experts and deliberations about how best to carry out the technical work that would support the project. (There was compelling evidence from the Nebraska Community Foundation which adopted the wealth transfer approach in 1994 and now has $107m in endowed assets, plus a record of $355 million of reinvestment in the state since the Foundation was established.) Sarah took comfort from knowing that Into Our Hands – centred on Wangaratta and covering four local government areas – was part of a community that was evolving and undergoing a resurgence.

 “We asked ourselves: What were these ingredients we needed, particularly in a rural place? Does the region need entrepreneurial spirit? Does the region need to be not in decline? And after all that due diligence, we thought the north-east of Victoria could be a great place for an Australian pilot because we were one of the few rural places growing in population, growing in businesses, growing in diversity,’’ Sarah says. “We’ve got this great entrepreneurial tourism base now after the change industries, from tobacco, to wine to food and the whole region has had this renaissance since the 1990s.”

Perhaps most importantly, Sarah believed the approach would resonate with her community.

“I think because we’d had other organisations locally that probably weren’t explicitly sprouting a similar message but had actually done the same kind of things, with a smaller group of individuals, gave me some confidence,’’ Sarah says.

But the technical side of the campaign – the hard data – was the missing element. The questions came thick and fast.

Photo credit: Into Our Hands Foundation

“Do we create a methodology that’s going to work within Australian data sets, and we can mine the data in Australia? Is it there? And if so, how much is it going to cost? It was a bigger step than we realized,’’ Sarah explains. “There were people saying to me not to worry about doing the technical report, don’t worry about documenting the wealth, just skip to the messaging and the campaign. But in rural and regional places it’s the data that’s changing the conversation…it’s the data that’s showing the possibility, it’s the ability to see the wealth in place and to see how that can be used differently that is new to people and that might change the conversation about bequests and structured giving.’’

The answer came from Seer Data and Analytics, who looked closely at US methodology and then used Australian Bureau of Statistics figures, including Census data, to build a model that gave a robust picture of the wealth transfer potential in north-east Victoria. It was an Australian first. Kristi Mansfield, Seer’s co-founder, described Into Our Hands’ approach as “visionary’’.

 The final report, supported by the Federal government’s Building Better Region Fund as well as the Foundation for Rural and Regional Renewal, Alf & Meg Steel Fund and the June Canavan Foundation, estimated household wealth transfer in north-east Victoria in five-year intervals from 2016-2066 by age, gender, household type and locality. The compelling bottom line was that if one per cent of the wealth transfer from the region was bequeathed to the community foundation, the foundations’ endowment could build to $25 million in 10 years.

If 10 percent of households in Wangaratta and the adjoining council areas of Indigo, Alpine and Mansfield left five per cent of their household wealth to Our Hands, the Foundation corpus would be $1.5 million within two years, and $5 million in five years. On any measure, it represents a significant contribution to the Foundation – and therefore, the communities it serves.

All of this work had been done and the campaign to socialize the idea was ready to go when COVID-19 hit. It meant that the face-to-face education package that the Ecstra Foundation had funded Into Our Hands to deliver had to be changed. “In terms of delivery, we have varied our funding with Ecstra to cover an online education element, so we will work with some consultants once we’ve refined the education piece for the community to record a master class and a collection of online resources,’’ Sarah says.

“We’ve spent more money than we intended to develop downloadable replicable resources that communities can actually take from the web and we’re going to put up a couple of videos of the workshops, so people can still have access to the course if they don’t want to attend in the community. We made that decision late last year because we couldn’t be sure about the length of lockdown.’’

Sarah initially hoped that Into Our Hands would be one of a small number of foundations exploring the wealth transfer idea. Due to a range of reasons, she has found herself taking on a pioneering role. But there’s no shortage of interest in how it goes.

Australian Community Philanthropy has formed a steering group to explore how learnings from existing transfer of wealth campaigns can be applied to community foundations across Australia. It is a potentially transformative innovation – 70 percent of the nation’s community foundations are located in rural and regional Australia.

ACP chair Ben Rodgers says: “Giving to place is a legacy that people can visualise – 100 years from now, local people will be coming together to remove the barriers faced by their neighbours. Transfer of Wealth Campaigns can help inspire people to partner with a community foundation to have an enduring impact for the place they call home.’’

Sarah recognizes that she is at the start of a 10–20-year campaign to get locals to consider the idea and then embrace it. But she’s hopeful that it will also give all those working in community foundations renewed energy to try something new.

“The challenge now is the resourcing of it, and the campaign and the field work – the work in the community to grow this idea, to grow understanding of the value of structured giving, the why you do it – that’s the resourcing issue now and the issue for community foundations across the country,’’ she says.

Philanthropy Australia will be launching a new strategic roadmap to grow giving at next month’s national conference. Seer Data and Analytics’ research informs the roadmap and highlights the opportunities of intergenerational wealth transfer across Australia to increase giving.

Access the Into Our Hands Community Foundation report here


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