Philanthropy the greatest gift
It has long been Dick Smith's contention that Australia's wealthiest individuals are a Scrooge-like bunch when it comes to philanthropy. Mr Smith, who built a largish fortune from developing and selling consumer electronics and publishing businesses and who has given much of it away to charitable and other deserving causes, frequently exhorts Australia's rich to follow his selfless example. Those he suspects of having shirked their duty have been threatened with ''naming and shaming''. Indeed, visiting Canberra this week to address a function organised by Hands Across Canberra, Mr Smith singled out senior bank executives, calling them ruthless and greedy for failing to give publicly and generously.
Whatever the complaints of the irrepressible Mr Smith, Australia's rich do appear to be becoming more active in philanthropic circles. On Thursday, the Harold Mitchell Foundation, established in 2000 by the eponymously named media and communications tycoon, bequeathed $2.5 million to the Development Policy Centre at the Australian National University's Crawford school of public policy. The gift will go towards the development and refinement of overseas aid policy, a particular interest of Mr Mitchell's. In October businessman John Grill donated $20 million to the University of Sydney for the building of a centre for project leadership, and at about the same time, it was reported that John Kinghorn, a businessman who founded and later sold the RAMS home-loan business, had created the Kinghorn Foundation with a gift of $300 million. This is reportedly one of Australia's largest philanthropic gestures, exceeded probably only by the $500 million given to Australian institutions by Irish-American duty-free billionaire Chuck Feeney.
Americans are philanthropy's standard-bearers, and have been more or less since Andrew Carnegie, the late-19th century industrialist who more than lived up to his dictum that ''the man who dies rich, dies disgraced''. Mr Carnegie gave away $350 million during his lifetime, the equivalent of $4.8 billion in today's money. The $30 million remaining in his estate after his death in 1919 was given to foundations, charities and pensioners. Australia's wealthy are less charitable than that, and probably always will be since America's intrinsic wealth is unrivalled. However, the gifts of Messrs Grill, Kinghorn and Mitchell and others indicate that things have begun to change. Mr Smith may claim some credit for this, but the most logical and plausible explanation is the sustained minerals commodity boom and the emergence of a new and sizeable class of entrepreneurs in Australia.
Former prime minister John Howard this week nominated leaving the Australian economy ''more prosperous'' than ever before as one of his greatest achievements, and while some have derided this claim as based on nothing more than inflated residential property values, it has to be noted that there was a flowering of entrepreneurial activity during his term in office. Bob Hawke and Paul Keating, whose governments initiated the regulatory reforms that re-energised the economy, also deserve credit for this. Thanks to initial public offerings or buyouts, many of these entrepreneurs are now very wealthy. Some have used their ''liquidity events'' to accumulate status symbols and pursue frivolous lifestyles, but a significant number have set up charities and charitable foundations - enabled by the Howard government's 2001 laws on private philanthropic funds. It is estimated there are more than 1000 of these funds and that they control $2.2 billion and perhaps as much as $3 billion. These funds are obliged to distribute at least 5 per cent of their assets each year, but data indicates payouts are closer to 10 per cent.
It is welcome news for the legatees - but the nation benefits as a whole too, not least because universities and research institutions have been the major recipients. That public funding for many of these institutions has decreased in real terms in recent years has only added to the value of such donations. Indeed, many universities, including the ANU, now actively pursue philanthropic support.
It is no coincidence Mr Carnegie believed learning (represented in his case by libraries) was the best thing an individual could do to benefit the community. If one takes the view that philanthropy is a force for good, then giving to higher education is surely the best way of ensuring that good will be done. It is encouraging to see more of Australia's wealthy elite following Mr Carnegie's lead.