How philanthropy can drive innovation

Giving to start-ups could help Australia meet its philanthropic giving target.

The worlds of philanthropy and start-ups may seem far apart, but they are in fact intrinsically linked.

That’s according to David Burt, director of entrepreneurship at UNSW Founders, which helps develop future entrepreneurs.

He believes there are plenty of ideas in Australia, and plenty of entrepreneurs eager to put them into practice, but the risk — particularly in a fragile economic environment and in the face of the rising cost of living — is that those ideas don’t get translated into action due to a lack of stable funding. But with a little help from philanthropic friends, these ideas could become reality.

Burt believes philanthropy is a “cost effective way to have a big impact”.

UNSW Founders provides a forum of knowledge, networks and some funding to help entrepreneurs start a new company.

Burt’s role means he has seen first-hand the impact that philanthropy can have on scaling up innovation.

He has been keeping an eye on the government’s philanthropy target and efforts to increase the culture of giving in Australia.

“I think a key part of that is helping more people realise that areas that they might not have thought of before actually have philanthropic relevance,” he explained.

“And what I mean by this is most people that I meet and I start having this conversation with, they start with this assumption that philanthropy is not relevant for entrepreneurship. [They believe] if these people want to start businesses, they can sell products, they can raise money from investors. 

“I think part of the way we boost the rate of giving and get closer to that target of doubling philanthropic giving by 2030 is to actually engage with more people and help them realise that there are areas [where philanthropy] has a really key role to play.”

Boosting a start-up can have a positive economic impact in helping a business that will employ more people, he added.

Already, the UNSW Founders program has attracted around $15 million in philanthropy over the past eight years. This has supported over 50,000 people to develop their entrepreneurial skills, and more than 500 new start-ups have emerged from the process.

Importantly, Burt explained, the philanthropy needed doesn’t have to be big; even a small donation can create the sort of positive impact he’s seen.

“…whether you’re an individual that wants to support this area or whether you’re a foundation, a relatively small cheque size can result in a really big impact. It doesn’t have to be $10 million; it can be as low as a five-figure donation,” he said.

UNSW Founders works closely with donors to ensure transparency around where their funds go, and Burt believes this can also contribute to enhancing giving in Australia.

He said there’s a “tension” between the “individual economic choice to quit your job and start a company”, and the need for such actions to create a more “vibrant” economy.

“There’s that tension between the collective good and the individual risk — so that creates the bubble of justification for philanthropy, de-risking that choice on an individual level and saying, ‘hey, if you do this, there is some support here that will be available’,” he said.

While there are government programs aimed at incubating and launching start-ups, Burt said philanthropy provides a “stability of funding” that other options can’t match.

“Yes, government does do great things in this area, but they’re often inconsistent or sporadic. When you’re trying to build a community of start-up entrepreneurs… that kind of consistency… is super important,” he said.

Philanthropic giving also generates goodwill, he added, noting that many of those funded through UNSW Founders have given back their time and experience through mentoring to help lift up the next generation.

“When you help people philanthropically, they’re far more likely to philanthropically help the next generation… which again, is super important for the long-term sustainability of creating a culture of entrepreneurship in Australia,” he said.

And with time, they may even be in a position to donate financially themselves, he added.

Anyone interested in philanthropically supporting entrepreneurship is encouraged to get in touch with UNSW Founders.