Benchmark for giving begs wealthy to follow
Illustration: John Spooner.
OCTOBER 23 will go down as a monumental day for Worley Parsons co-founder and biggest single shareholder John Grill.
At 2.15pm yesterday he held a briefing in the foyer of the University of Sydney's Law Building to hand over $20 million to set up the John Grill Centre for Project Leadership then dashed across the quadrangle to front his last Worley Parsons annual general meeting as chief executive.
A press release touted Grill's $20 million donation as the largest single gift ever given by a living Australian to an Australian university. Hat's off to Grill for his generosity - particularly the impact the course will have on the future success of projects - but it begs the question, what are some of the country's other high-net-wealth individuals doing?
While Grill has retired as CEO, he will return as chairman next year, something that has been well received by investors. The decision to set up a project leadership course aimed at managers in their mid-career came from the knowledge that worldwide 65 per cent of major projects in engineering fail, either in schedule, cost or quality.
If this course makes even a small difference to this percentage of project failure, it will translate into a savings of billions of dollars a year.
In the past there have been gifts by former transport magnate Greg Poche, who donated $32.5 million, or 4.3 per cent of his net wealth, to charity in December 2005, and more since then.
Graeme Wood, co-founder of the accommodation booking website Wotif, donated $15 million to the University of Queensland to establish the Global Change Institute. This followed a joint $18 million gift with the company co-founder Andrew Brice to set up an endowment at the university.
The founder of RAMS Home Loans, John Kinghorn, donated $25 million to build the cancer research centre for the Sydney-based Garvan Institute and St Vincent's Hospital, while former prime minister Bob Hawke recently told the media that Andrew Forrest should be recognised as one of Australia's greatest philanthropists for his work on Aboriginal employment.
There are others, and apologies for any that have been overlooked. But overall, Australia could never be accused of being overly generous when it comes to giving.
Daniel Petre, a former senior executive at Microsoft, is on a mission to get the rich to dig deeper. In 2008, through his Petre Foundation, which has donated $10 million, he commissioned a report into philanthropy. It found that wealthy Americans allocate 3.8 per cent of their income to charities, while wealthy Australians contribute less than 1 per cent. It also found that most wealthy Australian families allocate less than 4 per cent to philanthropy, versus the US average of 15 per cent. ''As far as I am concerned that is paltry and we need to see a change in the attitude of Australians to philanthropy,'' Petre said.
Neil Balnaves, the former executive chairman of the Southern Star Group, has dug deep. Yesterday, he donated $1.5 million to open a centre at the University of NSW to promote indigenous education. Since 2006, when he established the Balnaves Foundation, he has dispersed more than $2 million a year.
While a number of wealthy families have set up foundations, some of the largest private philanthropic funds in Australia are linked to dead people. If any of our billionaires allocated 10 per cent of their net wealth, it would make a difference.
Unlike the US, it would seem that philanthropy does not play near as big a role in Australian culture. An inaugural NAB Charitable Giving Index, based on donations made by credit card, BPay and EFTPOS, found that by postcode, the average amount of money spent on charity per person was highest in Middle Park, Victoria ($334), followed by Vale Park, SA ($276), and Killara, NSW ($248).
But if generosity is measured in terms of how much people earn, then residents from Lakes Entrance, Victoria, win hands down. The index shows that Lakes Entrance gave 0.34 per cent of their income to charity, followed by Vale Park at 0.31 per cent and Middle Park at 0.28 per cent.
The index found that, on average, the top 10 postcodes from ACT (0.21 per cent) donated most income to charity, while Queensland (0.16 per cent), NSW (0.14 per cent) and WA (0.13 per cent) donated the least.
Bill Gates has given more than $US28 billion of his wealth to his foundation, the largest in the US. It represents more than 50 per cent of his net wealth.
Warren Buffett, one of the richest men in the world, has pledged almost all of his fortune to the Gates Foundation and has given $US8 billion to the organisation since 2006.
Gates and Buffett have joined forces to encourage other billionaires to pledge to give away at least 50 per cent of their wealth during their lifetimes or upon their deaths as part of a campaign called The Giving Pledge. By late 2011, about 70 billionaires had signed up for the campaign.
The US has had a string of wealthy people over the years setting the benchmark for philanthropy; Australia has all too few. Grill has set a benchmark for others to follow.
But it is also up to the charities themselves to get their act into gear. After years of debate about the transparency and lack of accountability of the sector, a Charities and Not-for-Profit Commission has been set up. If the legislation passes the Senate, it will be up and running by Christmas.
A long-time researcher (or campaigner) in the sector who has campaigned for greater transparency and accountability, Don D'Cruz, is sceptical of the new charity regulator. ''ACNC is designed by not-for-profit insiders for not-for-profit insiders, making it to the not-for-profit sector what Fair Work Australia is for industrial relations,'' he said.