Bruce Bonyhady AM, president of Philanthropy Australia, ponders the necessary conditions for philanthropy to reach a tipping point in Australia.

Bruce Bonyhady AM, president of Philanthropy Australia, ponders the necessary conditions for philanthropy to reach a tipping point in Australia.

In his book ‘The Tipping Point: How Little Things Can Make a Big Difference’, Malcolm Gladwell describes the term ‘tipping point’ as “the moment of critical mass, the threshold, the boiling point”.

So what would it take for Australian philanthropy to reach a tipping point – the point where it has permanently scaled new heights of significance?

Four years ago, Philanthropy Australia defined philanthropy as:

“The planned and structured giving of money, time, information, goods and services, voice and influence to improve the wellbeing of humanity and the community”.

This definition provides a useful framework for determining whether Australia has reached a tipping point; the key anchors being money, influence, voice and time.

Money: scaling up philanthropy

The Australian philanthropic sector, when compared to the US sector, is small, largely because high-net-worth individuals in Australia tend to give at a much lower average rate than their equivalents in other countries belonging to the Organisation for Economic and Co-operative Development (OECD).

Earlier this year, the government commissioned Philanthropy Australia to examine strategies around increasing high-net-worth (HNW) and ultra-high-net-worth giving. Together with Effective Philanthropy (a philanthropy consultancy), and the 2008 QUT report ‘Good Times and Philanthropy’, Philanthropy Australia identified a number of important strategies.

These include: developing a culture in which high-net-worth and ultra-high-net-worth individuals are recognised, not just for their assets but also by what they give; appointing giving and philanthropy ambassadors; better education and training programs for financial, legal and other professional advisors working with HNW individuals and families; and improving communications between the Australian Taxation Office, Treasury and the philanthropic sector and encouraging take-up of available tax incentives and charitable giving structures.

Members of the philanthropic community have a shared responsibility to grow philanthropy by showcasing the unique contribution it makes towards a civic society, and to promote Australian philanthropy to the stage where it reaches a tipping point, and beyond.

Influencing government policy

In Australia, direct government spending represents more than 24% of GDP. Governments are the dominant funder and determinant of social policy. Therefore for philanthropy to achieve scale and maximum impact, it must influence government policies.

There is significant potential for trustees of foundations, in a personal capacity, to use their influence to champion better public policy changes. In fact, without this ingredient, it seems unlikely that Australian philanthropy will be able to reach its full potential.

Voice and the role of education

Philanthropists, trustees and their foundations are well placed to contribute to the role of educating the broader community. Without public education and broad community support it is not possible to create and sustain major change – and is therefore impossible to create tipping points.

The vital importance of public education, media profile and community debate as pre-conditions for creating social change has never been higher, given the role that focus groups now play in setting political policy agendas.

Time – an irreplaceable ingredient

Time, particularly in the context of trustees, individual donors and advocates building philanthropic expertise and experience, is critical. However, potentially the most significant contribution of philanthropic leaders is their vision and capacity to reframe issues. George Lakoff, in his book ‘Don’t Think of an Elephant -Know Your Values and Frame the Debate’, begins:

‘Frames are mental structures that shape the way we see the world. As a result, they shape the goals we seek, the plans we make, the way we act, and what counts as a good or bad outcome of our actions … To change our frames is to change all of this.’

Reframing is about new ideas and developing a language that fits a new world view.

A current example of this is the work being undertaken by the Atkinson Foundation in Canada to develop indices of well-being. The foundation has been leading an extremely ambitious project which aims to incorporate Canadian values and aspirations into a single Canadian Index of Well-being.

This is of great potential importance to philanthropy because it would also provide a framework within which the impact of philanthropy could be clearly quantified by measuring well-being before and after a philanthropic project.

It is interesting to note that a recent survey of Philanthropy Australia members showed 75% rated ‘evaluating the impact of grant-making’ amongst their three greatest challenges. This was also the case five years ago.

I therefore see the development of indices of well-being as critical to philanthropy reaching a tipping point. But the more general pre-condition for philanthropy to reach its tipping point is for it to contribute more to new ideas, so as to reframe old problems and create transformational solutions.

Not yet there but not far to go

Today each of the critical elements – money, influence, voice and the expertise which brings new ideas and frames – which can create a tipping point in Australian philanthropy are evident, but they are not working to maximum effect. The art of philanthropy is still being developed along with the science. We are all enhancing our capacity, as part of a pluralist and vibrant sector, to create and seize new opportunities.

I am therefore confident that Australian philanthropy is not far from its tipping point.

Bruce Bonyhady AM is the president of Philanthropy Australia.