The End of an Era

After 13 years at the Myer Family Company, Peter Winneke, the man considered by many as the father of the new wave of philanthropy in Australia, is moving on to unknown horizons. Winneke is this week’s Changemaker. He spoke to Xavier Smerdon.

More than a decade ago Peter Winneke realised the potential for philanthropy in Australia. That realisation inspired him to create the philanthropic services team at MFCo, formerly the Myer Family Company.

Now, after 13 years, he is moving on, and he says that Australia has still not reached its potential, and is kidding itself it thinks it has.

Winneke said Australians are not as generous as they think they are, and a constant effort to change the country’s culture of giving is needed.

In his last week as Head of Philanthropy at MFCo, Winneke shared what got him into the sector, where he is likely to be going, and what inspires him to push for change.

Everyone knows you for your work in philanthropy, but how did you get into the sector?

I trained as a chartered accountant and then after Monash University I did eight years of insolvency at Arthur Andersen, the accounting firm, doing receiverships and liquidations, where I built up what I call a healthy scepticism and what my wife calls cynicism. It feels like a former life.

On reflection it was really good training for the philanthropic sector. That, of course, wasn’t the plan at the time but when you’re doing insolvency you get told a lot of stuff which is not necessarily true. Someone says something, you listen to it and you look behind all of it and work out if it’s plausible, if it’s true and if it makes sense. It was great training for philanthropy.

After eight years of insolvency I did eight years of media acquisitions at a listed media company. So that was 16 years in the corporate world. I learned a lot, enjoyed it, but I was finding that it wasn’t meaningful enough for me. I’m very conscious that we spend a large percentage of our life at work and what I was doing wasn’t meaningful enough for me.

I married late in life at the age of 39 and prior to that I would go backpacking every winter for a month. I’d go to a different one, two or three countries every year and I saw the world, because I could, I didn’t have any dependents. Whilst I’m an optimist, most of the countries I travelled to were developing countries and I could see that the world was in terrible shape.

I was mulling this over in my head for a number of years and when I came back from another trip I thought “too much pontification here Peter, time for some action”. I thought I needed to be in the Not for Profit space somewhere so I did a lot of research and stumbled into the philanthropic sector.

I did a lot of research on the philanthropic sector here, in the US, Canada and the UK. This is going back about 14 years now and it didn’t take long to work out that the sector in Australia is tiny. My lightbulb moment was sort of working out that there were very few people trying to drive the growth of the sector. So I had the very naive notion of “oh let’s get into the sector and help drive its growth”. As I came to that conclusion I heard of a position as Finance Manager of the Myer Foundation.

Now, I’m a chartered accountant by training but I’ve run away from numbers all my life. I didn’t want to be a finance manager. The team at the Myer Foundation, you may be aware, also manage the grant making for the Sidney Myer Fund. The Foundation and the Fund do some great stuff but their role is not to grow the philanthropic pie, which was the passion that I had developed.

I literally had two sleepless nights and then woke up and thought “well Peter, you’ve done a lot of research on philanthropy but you’re not an expert, why don’t you go and work with the Myer Family who’s been involved in philanthropy for eight decades”. It would be a terrific training ground and I thought I could do that for two or three years and then go off and work with some other body that is charged with growing the sector.

I joined the Myer Foundation at the start of 2003. At the time it was on the same floor as the Myer Family Company, which as you’d be aware, is a major family office providing a whole range of services to most of the 100 descendants of Sidney Myer, and there are now about 100 non-Myer families who are now clients of MFCo. So I’m sitting there in my first year at the Myer Family Foundation in the corner of the building, sitting there with my selfish hat on thinking “wow, the Myer Family have got eight decades of giving experience and then we’ve got this very unusual beast in MFCo providing all these services to high-networth families estate planning, succession planning, tax accounting, investment services, superannuation, but there’s no dedicated philanthropic service offering”.

All of our clients by definition were high-networth families so if they chose to, they could all wander down the philanthropic path. To me it was sort of a no-brainer, a good move for MFCo, but also for me personally to set up a philanthropic services team at MFCo. After discussions with senior Myer family members and the senior management team at MFCo it was agreed that I would establish the philanthropic services team. That was 18 months after I started at the Myer Foundation in July 2004. I stayed in the same office by my employment transferred to the Myer Family Company and MFCo Philanthropic Services was born.

Now of course that was just me. I needed to bring in some clients to raise some fees so I could then afford to bring on a PA one day a week, and then we got some more clients and I brought on a PA two days a week, and then a part time grant researcher and then a second grant researcher.

It’s important to note that when the team was established the Myer Family was keen not to make money from philanthropy and not to be seen to making money from philanthropy. So our aim has always been for the philanthropic services team to cover its costs and that’s pretty much what we do. Our model is fee for service. Our larger clients are distributing a couple of million dollars a year and we might spend 10 hours a week on their foundation. The smaller clients might be distributing $50,000 a year so we might be spending 10 hours a year on them. We keep time sheets and charge them by the hour which we think is the only fair way to charge, and it often means it’s significantly cheaper than charging a percentage of corpus as some others do.

So why are you leaving now?

I’m very grateful to the Myer Family for allowing me to basically pursue my dream. Not many get the opportunity to do that. I’ve had that opportunity, I’ve had a lot of autonomy. It’s been a lot of fun, it’s been very satisfying, but it’s also relentless. You’re basically trying to change a culture in this country.

There we were in Canberra recently for the Philanthropy Australia Summit, Philanthropy Meets Parliament, we’ve got the [former] Minister for Social Services, Minister [Scott] Morrison, saying as many do, Australians are generous. Now, we know we’ve got a number of generous Australians, there are some families doing some amazing things, but we’ve got all the giving stats  –  we’re not generous. We need to have a reality check, and it’s hard. I get people constantly disagreeing with me, “Peter, you can’t say we’re not generous, we are”. And I say “well look at the evidence, all the evidence suggests that we are not generous”. So it’s a lot of fun, but it’s relentless.

Also, I’ve led the team for 11-and-a half-years. I don’t think it’s good for anybody to have someone leading a team for much more than 10 years. You need fresh blood, new ideas, people need to move on to new challenges. I leave with a heavy heart but knowing that it’s the right time for me to wander off, it’s terrific.

As you know, we’ve got a ripper team in place, so I’m very comfortable for our clients, which is my concern. I wanted our clients to be left in capable hands and they are. It’s now a good time for me. 29 years of the early train, let’s get off the early train, go and have a rest, gee I sound old when I say that.

I cannot believe that I’ve worked for 29 years. It’s just mind boggling. It’s been a lot of fun, but you think “where did the time go?”. It’s very interesting. All of my clients are older and wiser than I am, and I had to make some very difficult phone calls to let them know I was leaving, and they all said pretty much the same thing, “Peter, we’re really going to miss you, you’ve really helped us develop our philanthropic purpose and get our family engaged in the community but the best thing that I ever did in my life was go and have a sabbatical, so it’s such a great idea”. So as I said, we’ll go and wander off, sit under a tree, spend a bit of time with my little boys that are eight and 10 and then clear the mind and think “ok, what’s the next adventure?”

I suspect by the end of January I’ll be getting very itchy feet, but I don’t know, I’ve never done it before.

A lot of people are probably wondering with you, Louise Doyle and Amanda Miller all leaving from the same team, is there something bigger going on?

No, not at all. Louise Doyle, as you know, she was tapped on the shoulder and has got a terrific opportunity with the Besen Foundation. With Lou and I leaving, we’re a very close-knit team, and Amanda Miller took the view that her passion is Impact Investing. Her husband, Quentin Miller, was a corporate finance guy at UBS for many years. At the start of this year he left UBS and set up his own shop. He’s got some corporate clients but he’s also doing a fair bit of work in the Impact Investing space. That has always been Amanda’s passion, so she’s taken the opportunity to think “oh well, we’re a really close knit team, if Pete and Lou are going to wander off, I might go and do what I was going to do in a couple of years time anyway, I might go and do it now and do more work in the Impact Investment space”.

People quite rightly say “gee what is going on? That’s three of the senior people”, but they’re all legitimate reasons and MFCo is committed to the future of philanthropy. Simon Lewis [Winneke’s replacement] is a really good operator and I’m really excited that he’s coming in. Deborah Morgan spent six years at the Myer Foundation and 10 years in the philanthropic sector, she’s a good operator. So I’m actually now really excited that we’ve got a great team in place going forward so I can now wander off and know that the clients are in capable hands.

Graham Tuckwell credits you with inspiring him to go public with his $50 million donation to the Australian National University. You’ve also helped set up more than 100 Private Ancillary Funds. How does it feel to have had that kind of impact?

It’s interesting because I don’t really dwell on that. It’s the sort of thing I reckon when I’m sitting in my rocking chair in 30 years time I might think “yeah, I did some good stuff there”. I really have mixed views on it.

Yes it’s terrific to work with 100 families and get them more engaged in the community, particularly the next generation, that’s an exciting thing when you’re working with the next generation from the wealth creators. But I really do sit here thinking, and I’ve thought this for quite some time, with my connections, with the Myer Family’s connections and with our clients’ connections, I’m frankly disappointed we haven’t set up 400 foundations, because we should have. We could have and we should have.

I think I’ve had quite a good stint here and there’s some satisfaction of the work done but I do feel that we could have done a lot more, and again that’s part of changing the culture and building a culture of giving in this country.

That leads us onto the next question. What do you think of the state of philanthropy in Australia at the moment?

I think it’s in fair shape. The pool of philanthropic capital is still tiny given the wealth in this country. We know that individual taxpayers earn over $700 billion each year, well that’s what they declare, I don’t know what their income is. If they’re declaring $700 billion I wonder what it really is. And yet we only give $2 billion away each year.

We know that on average we only give about 0.3 per cent of our income. For a number of years it was only 0.4 per cent, so that was low and it’s going lower. So giving as a percentage of income has dropped dramatically. We still only have 1,300 Private Ancillary Funds. With the wealth in this country we should have 10,000.

We know that there are a number of small community foundations around Australia. The bigger ones are the Lord Mayor’s Charitable Fund and the Australian Communities Foundation, and to a lesser extent the Sydney Community Foundation. Between them they’ve only got a few hundred sub-funds. They should have 50,000 sub-funds. You can set up a sub-fund for a few thousand dollars. They’ve got a few hundred. There are thousands of families in Australia that could set up a sub-fund and work with their families to instill an ethos of giving and caring within the family and do some good stuff in the community.

We’re on the right path but we’ve got a long way to go. The pool of philanthropic capital is tiny and even with that small pool, particularly given it’s a small pool of capital, we’ve got to get a lot smarter with what we’re doing with it.

Most foundations are still using that scatter gun approach with their giving. We need them to refine their focus and make fewer but larger grants and work with their community funding partners over multiple years and to help them build up their organisational capacity. Very few foundations are actually doing that.

Most of the funding that comes out of philanthropy land is one year funding. Now, we know you can’t do much in anything less than three years, so we’ve got to get a bit smarter with our giving.

The philanthropic sector in Australia is still immature so perhaps all of this is understandable. We’ve only created the wealth in this country in the last 30 years. The Myer family is in its fifth generation of wealth. I’ve been asking people for a couple of years can they give me another example of a family in Australia in their fifth generation of wealth. They will exist but no one's been able to give me a name. The wealth is new, so it’s perhaps not surprising that we haven’t built up our culture of giving but I think we need to work a bit harder and a bit smarter about building that culture of giving and then being smarter with the philanthropic capital that we have.

How do we remedy that situation?

For a few years I’ve been calling for a national giving campaign. A lot of things don’t get done unless they’re measured. We know that Australian individual taxpayers are giving about 0.3 per cent of their income to charity. Nobody knows that stat. If you go to your dinner party tomorrow night and ask your friends, what percentage of their incomes do you think Australian’s give away, people usually say “oh I don’t know, I’ve never seen that, we’re quite generous, so maybe it’s five per cent of their income”. No one knows that it’s 0.3 per cent.

So I think that we need to have a national giving campaign that would include a number of things and firstly it would have a benchmark for giving. I don’t know what that should be, but I think we should start with a nice round number and say it’s one per cent of our income. Many families in Australia would be able to give away one per cent of their income and it wouldn’t impact their lifestyle.

Also, if there’s a benchmark, if you’re earning $80,000 a year you need to give away $800 dollars and you know come April or May that if you’ve only given away a couple of hundred dollars, you know you’ve got to get a move on to get your one per cent out the door. If we measure it, it will happen.

And we also need an education campaign for financial advisors, lawyers accountants and financial planners. Many of them still don’t know what a PAF is, they don’t know what a community foundation sub-fund is. They’re not aware of these structures which are not only tax-effective, but really useful for their clients in terms of unifying the family, and if nothing else it brings that advisor much closer to the family.

We usually ask our Changemakers what inspires them, which I will ask you. But also, what frustrates you?

When the Hawthorn footy club don’t win I get a bit frustrated with that, but I’ve been lucky of late.

In terms of inspiring, I had two sets of grandparents who did a lot of service for the community. Now that didn’t mean much to me when I was a little kid but I guess I was just watching it and then, as I matured and, mainly through overseas travel, saw the problems around the world and how fortunate Australia is, I guess as a little kid watching the service to community that my four grandparents provided sort of sunk in. My parents also had very strong values and also served in various Not for Profit roles. I was very fortunate I guess to learn about integrity and values from my grandparents and parents.

I’m just very conscious that we’re not here for long. I call it the rocking chair test. When I’m 80 sitting in my rocking chair with my pipe, I want to sit there and think, “yeah Pete, that was ok, you did some good stuff”. I think a lot of people in Australia tend to focus on building the personal balance sheet and for me that’s not terribly satisfying.

In terms of what frustrates me, apathy is the enemy. We have the wealth and intelligence to solve every problem in the world, but we obviously haven’t, and a lot of it is down to apathy. People think it’s just too hard. That frustrates me.