Theone Star
Private giving can help to overcome a funding shortfall for charities and other not-for-profit organisations, particularly as governments retreat from international aid Theone Star, head of private wealth at Schroders says.
“The strong performance of global stock markets over the last few years means that global wealth remains close to record levels, putting many families in an unprecedented position to consider charitable giving,” says Ms Star.
“For many of our clients, businesses form a significant part of their wealth and can be powerful vehicles for change. We can help embed sustainability principles throughout a business, whether by helping them to understand its carbon footprint or highlighting areas of risk in its supply chain. Many families are looking at the broader impact of their wealth, across investments, businesses, and succession arrangements.”
Soon after taking office in January 2025, the Trump administration ordered a near-total freeze on most foreign aid spending, pending a review to ensure programs aligned with the US President’s foreign policy. The US administration initiated the dissolution of the US Agency for International Development (USAID), the primary body for delivering foreign aid, increasing pressure on other jurisdictions, including Australia, to help fill the gap.
“While private philanthropy cannot replace government aid, it can make a significant difference. One of the most straightforward ways to help is by supporting charitable organisations which may be able to step in where government aid once operated,” she said.
Many philanthropists have plans in place around their giving, reflecting the causes and organisations they wish to support. While no one individual can solve the world’s challenges alone, it is important for individuals to make choices about what support to give and to whom.
“Aligning investment portfolios with a family or organisation’s philanthropic mission is an important first step, and often involves making trade-offs and difficult choices. Do you want to prioritise emissions reduction within a portfolio? Do you want to focus on short-term goals or long-term change? There are many different options to consider,” she said.
“Today’s funding crisis may create even more incentive to maximise the impact of their overall asset base.”
There are encouraging signs that private giving is on the rise which will help to overcome the shortfall, according to Ms Star.
“In May, Bill Gates pledged to accelerate his giving over the next 20 years, while Michael Bloomberg’s foundation committed to cover America’s financial obligations to UN climate initiatives.
“Closer to home, Andrew and Nicola Forrest pledged to give away the majority of their wealth back in the mid 2000’s through their foundations – the Minderoo Foundation and the Walk Free Foundation – with a focus on supporting indigenous Australians and ending modern slavery,” she said.