Transferring wealth… into the hands of the community
Wednesday, 5th February 2020 at 5:24 pm
Residents of Wangaratta, Indigo, Alpine and Mansfield could raise $6.3 million in charitable assets over a decade
As baby boomers head into retirement and set off one of the largest intergenerational wealth transfers in history, a community foundation in northeastern Victoria is waging a new campaign to harness some of the incoming wealth for local initiatives.
Wealth projection data, released late last year by Wangaratta-based community foundation Into Our Hands, found if just 1 per cent of the wealth transfer from the region was bequeathed to community foundations, the endowment would build to $25 million in a decade.
It also found that if one in 20 residents in the region left 5 per cent of their estate to a community foundation, $6.3 million would end up in management.
First trialled in the American cities of Nebraska, Ohio, and Wisconsin, legacy gifts have seen over $120 million in endowments raised in 30 years. Sarah Thompson, Into Our Hands CEO, told Pro Bono News there was untapped potential for Australian communities to do the same.
“These communities [in the US] flipped their thinking and started to talk about raising money in terms of what could be achieved if some of us or all of us started to give a small portion of our estate or our wealth,” Thompson said.
“It started to make the development targets for communities very, very achievable [for what] probably felt like a fairly poor rural community.”
She said that kind of money would mean a grant budget annually that was more significant than any other funder in the region, and it would be controlled by community members.
“This is a fund overseen by community people and investment in its own region. It’s their assets and the funds are managed by the community,” she said.
She also said the northeastern region of Victoria had the “right ingredients” of a stable economy and community members that were willing to take ownership of their issues.
“We are a community of people who want to see changes and a community that has put its own money to fund several initiatives such as renewable energy projects in Yackandandah and Beechworth,” she said.
With many residents in the region unfamiliar with community foundations or philanthropy, Thompson said if the campaign was to be effective, that had to change.
“We want to set a region-wide, fairly intensive campaign that saturates the community to bring it up to speed with philanthropic terms and what they mean,” she said.
“It’s really a public education campaign that would include community workshops and information sessions, radio, print, maybe even some TV advertising.”
She also said it was important to target groups of people who weren’t regular donors.
“The agriculture and farming sector and family business sector in regional areas hold a lot of wealth, but they’re not necessarily ready to give till the end of their life,” she said.
She said there was potential for the model to scale, creating widespread impact in communities across the country – particularly in regional communities.
“I really see transfer of wealth as a new tool for community foundations to talk to potential donors about why you would give in this way as opposed to setting up your own private ancillary fund, and what this does for long-term community benefit,” she said.
“We’re very interested in talking to Philanthropy Australia about how this can be a new way to discuss giving in the community and that regional sense that probably hasn’t been tapped into effectively in Australia before.”