Petre Benchmark Encourages Greater Giving From Australia’s Most Wealthy
Tuesday, 8th May 2018 at 5:14 pm
The test of true philanthropy is how much it hurts or impacts your life as a donor, according to businessman and philanthropist Daniel Petre, who has unveiled a formula to encourage Australia’s wealthiest to give more.
In an article posted on Medium, Petre, who gives 35 per cent of his net worth to charity, called on Australia’s wealthy to give more to charity claiming their current efforts were “somewhere between sad and disgusting”.
He quoted Bill Gates’ “wonderful mother” Mary Gates who said: “If you are fortunate in life to do well financially then it is your responsibility not your choice to give back”.
As part of his rallying cry, the co-founder of AirTree Ventures and former MD at Microsoft Australia unveiled what he called the “Petre Benchmark” whereby those who have at least $50 million in net worth should allocate 20 per cent of their net worth to philanthropy.
“My argument is that if you are living happily with $50 million of net worth you can live just as happily on 80 per cent of this ($40 million) without having to suddenly start buying clothes at Vinnies Op Shops,” Petre said.
“You get to give away $500K annually (5 per cent of the $10 million that is now sitting in your foundation – $10 million being 20 per cent of $50 million) to worthwhile charities that you care about. So you live a great life without any changes at all and others less fortunate are better off. Win –Win.”
According to Petre, he arrived at benchmark after spending years working with Gates and seeing his work with the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to giving back.
His aim was to find a lower percentage than 50 per cent, where the donor could make the allocation to philanthropy while they were alive without having to make changes to their lifestyle.
“Ie make the giving percentage a no brainer,” he said.
His article drew comparisons between the AFR Rich List and the recent AFR list of the 50 most philanthropic people.
Petre highlighted that of the 10 most wealthy, only three appeared in the top 50 givers.
“The Lowys with a wealth of $8.2b gave $18m, the Forrest Family with a wealth of $6.8b gave $18.3m, the Gandel family with a wealth of $6b gave $10m, the Packers with a wealth of $4.7b gave $10.3m. The Pratts (with $12.6b) seem to have donated only $7.6m,” he said.
“With annual giving in the range of 0.06 per cent to 0.29 per cent of their net worth I am not sure any of these donations count as philanthropy in the true sense of the word.”
He argued that the donations needed to be put in context, comparing with the average Australian who had less to give but still gave money to charities.
“I suspect thousands of regular Australians give away more than 0.06 per cent or even 0.29 per cent of their net worth each year to charities and they do not get any fawning articles written about them [nor] catch ups with the prime minister,” Petre said.
“The test of true philanthropy is how much it hurts or impacts your life (as a donor). At anything less than 1 per cent of your net worth being donated each year is simply not worthy of accolades nor attention,” he said.
Philanthropy Australia CEO Sarah Davies told Pro Bono News that she supported Petre’s core starting point that society needed more philanthropy.
“Daniel believes, as do lots of us, that we need more philanthropy; that philanthropy is good, it is good for the community, it’s good for society as a whole, it’s good for the partners that we work with, it is good for the giver. There’s are no negatives to it at all,” Davies said.
“When we look comparatively across the world, Australia’s high net worth citizens don’t seem to be giving anywhere near as much or in as large a volume as they do in other places.
“Daniel has always thought that that needs addressing. So again nothing to disagree with there.”
Davies also agreed that absolute dollar amounts were not always helpful when measuring generosity, or the degree to which citizens “give of themselves for the greater good”.
“I have always said and I believe very strongly that good philanthropy is not about the dollars and philanthropy is not just about lots of dollars,” she said.
“It’s around self agency and how we participate in building the kind of world we want to live in tomorrow and that we want our neighbors and our children and our family and friends to also live in.
“I think Daniel’s philosophy is really powerful. And sure if I have got an orchard full of apples and I give you an apple, maybe it doesn’t mean as much to me as if I’ve only got two and I give you one.”
But she cautioned that a “one size fits all formula” was not particularly instructive.
“It’s good as a guide and we’ve got other initiatives, the whole Atlassian, Salesforce Pledge 1% is actually the same philosophy, it’s saying pledge 1 per cent of your pre-tax profits as a kind of standard. Those sorts of benchmarks and models are really useful for us because they give us a frame within which to start thinking about it. But it’s not about mandating, it’s not about judging in that sense,” she said.
When considering whether philanthropy was a responsibility rather than a choice, Davies said it was not a question of money.
“My philosophy is that we are all born with the ability and the responsibility to be active agents in our own lives and in the lives of others around us,” she said.
“We have a social compact with our community, with ourselves and with the state that I think infers a responsibility to be active citizens. So forget money. I absolutely believe we all have a responsibility to be active participants in the world that we are creating.
“I also believe that for a whole range of reasons… many of our neighbors have some of that ability diminished or taken away… I believe that the rest of us have almost double responsibility then to help those other citizens and neighbors get back their ability to be active citizens in that way.”
For Petre’s part he said: “It would be nice to think that our most wealthy could also see the fairness in this way of thinking and behave accordingly.”