The Insider Andrew Thomas CPA

Andrew Thomas CPA | Photo: Graham Jepson

General manager of Philanthropy, Perpetual Limited.

Perpetual’s philanthropic services help individuals and organisations contribute to good causes in fields such as medical research, education, the arts, social welfare and international development. Seven years ago, Andrew Thomas joined the firm to head up its philanthropy business. He shares his insights.

Philanthropy, in a fashion, is risk capital.

How can we use this money as effectively as possible to provide the biggest bang in the community?

The individuals and families we work with are understandably looking for measurements and evaluation.

Before joining Perpetual, I spent 10 years in non-profit organisations, which gave me a good understanding of complex societal issues.

I’ve always had a social conscience, focusing on volunteering and giving.

You have to be prepared to take risks and challenge what is the existing norm and, through that, I believe great change can be achieved.

Perpetual looks after more than 900 philanthropic trusts and endowments, helping our clients distribute more than A$82 million to the community each year.

The next 10 years will see profound growth in Australian philanthropy. It’s already happening.

In 2000, tax deductible giving by individuals [in Australia] was measured at A$702 million, and in the latest data of 2012, giving by individuals has more than tripled to A$2.24 billion.

This trend is reflected globally. To give an example, the Bill and Melinda Gates Foundation currently employs more than 1000 staff.

In the late 1990s, Bill Gates Senior was still writing cheques for the foundation in his basement. Now they’re a very professional outfit.

We’re seeing that same focus in Australian philanthropy. One factor driving the growth is the private ancillary fund.

This fund was introduced in 2001, providing an opportunity to give to an endowed structure and receive a tax deduction, also with the option of electing to spread it over five years.

When the money’s in a foundation, it’s invested in a tax-free environment. It offers a more considered approach to giving and taxation planning.

In Australia, most philanthropists don’t want the limelight. Most give to improve the lives of others, but they want their life to remain the same.

In the US, philanthropists are generally more comfortable in readily sharing what they give, and which non-profit organisation boards they sit on.

In Australia, we’re not overt about our giving, but that’s slowly changing.

People don’t need extreme wealth to make a difference. Just identify an area that’s important to you and then set up an endowed giving structure for as little as A$20,000.

For some, it might come from the loss of a loved one and they contribute to medical research.

For others, it’s about being able to give where there’s a family interest, so that values get passed down from generation to generation.

We work with fourth-generation family members who have been introduced to philanthropy from a very young age.

Trick of the trade

When it comes to giving, always focus on strategic outcomes rather than giving emotively.

Long-term complex issues require long-term solutions, and providing a one-off gift will rarely achieve an outcome.

It’s all about fixing the sore, not replacing the Band-Aid.

This article is from the October 2014 issue of INTHEBLACK.

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