Australia’s Wealthiest Slow to Give
Thursday, 27th March 2008 at 10:46 am
Charitable giving by Australia’s most affluent is not keeping pace with their increasing wealth delivered by a booming economy, according to a new report by QUT’s Australian Centre for Philanthropy and Nonprofit Studies (CPNS).
The report says the rising level of giving by the affluent overall has not kept pace with wealth trends –and the gap is widening – and that the percentage of the affluent who give to charitable causes has risen only modestly over the past 10 years despite a substantially higher level of personal wealth.
It says while the average household income in Australia grew by 34% in real terms from 1994-95 to 2005-06, it has been the wealthier household that has experienced the greatest gains with a 36% increase compared to around 31% for those on low and middle incomes (ABS, 2006a).
The research says that Australia’s affluent are also on average giving at a lower level than their counterparts in comparable countries such as the UK, Canada and the US.
The report called “Good Times and Philanthropy: Giving by Australia’s Affluent" was commissioned by the Petre Foundation, an organisation set up by Daniel Petre, a former vice president of Microsoft who has returned to Australia with his family..
Petre says he’s not surprised by the results even though there are small pockets of wealthy individuals who do give.
He says the ultra-rich in Australia are incredibly resilient and entrenched in their position of not giving.
He says in the US if you are wealthy there is a sense of responsibility to give back to the community where you made your money, but in Australia it doesn’t exist.
He says the Myer Foundation is still the biggest donor in Australia and that fund was set up by Sidney Myer decades ago.
Petre says what is needed is for one of the top ten wealthiest Australians to break ranks and agree to live on 10% less and set up a foundation with that 10%. This would instantly add more than $500 million into the charity pool.
Petre says one way of forcing change is to introduce death taxes for the ultra rich where anyone with over $30 million dollars is taxed 10%. Perhaps, he says the thought of giving $3million to the tax man would convince them to give it to charity instead.
The report says more tax-related strategies are called for, given the establishment of some 600 Prescribed Private Funds (PPFs) by individuals and companies since being introduced in 2001.
It makes recommendations on how to engage affluent Australians in philanthropy offering what it describes as standout opportunities for Not for Profits, corporates and government.
– Increase visibility of philanthropy amongst the affluent (including via the media);
– Increase awareness of different types of involvement to suit varying levels of wealth and personal circumstances;
– Create greater peer support for giving e.g. loose supportive networks and groups providing opportunities for discussion and potential group funding (e.g., giving circles);
– Offer more guidelines for giving, promote affluent giving norms and build the practice of ‘planned’ versus spontaneous giving;
– The highest echelons of government, business, the professions and the community need to be personally inviting Australia’s wealthy opinion leaders to join in visionary philanthropic projects;
– Promote tax benefits attached to giving at higher levels, and alternatives;
– Train and support professional advisers about providing philanthropic advice to match clients’ circumstances to most suitable giving vehicles or options;
– Improve awareness amongst Australia’s affluent population of the benefits of involving their children in giving, the opportunities available, and who can assist them achieve their aims;
– Improve awareness of the Australian Not for Profit sector and the unique role of philanthropy in creating change in the community: the case for philanthropy needs to be stronger and clearer than it is currently;
– Increase transparency, efficiency and evaluation by Not for Profit organisations to help overcome expressed donor concerns. However, unrealistic expectations that a NFP organisation can exist without administration costs also need to be addressed.
– Improve understanding and responsiveness by the NFP sector of the needs and interests of the affluent;
– Improve volunteering opportunities for the affluent in Not for Profit organisations drawing upon their knowledge, connections, experience and interests.
The report can be downloaded at http://www.bus.qut.edu.au/research/cpns/publications/currentissue.jsp.