But rather than focusing solely on one-off gifts, how many of us are thinking about aligning our personal values with our financial goals through structured philanthropy?

This is the question that preoccupies Kevin Bailey, financial planner, Head of Philanthropic Services at Shadforth Financial Group and member of the Council of microfinance organisation, Opportunity International Australia.
“Because donations are tax advantaged, tax time is certainly a good time to consider giving, and of course every contribution helps,” he said. “Nonetheless, I would really like to see the question of structured philanthropy top of mind and on the agenda more regularly for financial planners and their clients.”

Mr Bailey cited the fact that only 7.5% of Australians include charities in their wills[1], and the 2012 Opportunity Donor Survey which revealed that only 2.1% of respondents have a financial planner that offers financial advice around philanthropy.

“It is my belief that as the financial planning profession evolves so too should planners’ knowledge about how to help clients translate their values into financial decisions,” he said.

Mr Bailey then pointed to two of the world’s wealthiest philanthropists, Bill Gates and Warren Buffet, as examples of successful people for whom philanthropy is a central theme in their life.

“They are shining examples of the truth that with power comes responsibility and that financial success brings with it the moral imperative to make a difference for the better in the world,” he explained.

“It doesn’t matter whether you are interested in contributing to your immediate community or supporting a specific charitable organisation, our experience has been that clients who become involved in something beyond their own financial success, who move from success to significance if you like, have more meaningful lives.”

Mr Bailey went on to say that conventional thinking has always been that there are four stages in a financial plan. The first is investment advice, based on a knowledge of capital markets, and an understanding of a client’s financial goals.

The second stage usually involves taxation planning, and the consideration of trusts and other structures to help improve returns. Stage three centres on retirement planning, how much you are likely to need and how best to achieve that, and the fourth has traditionally been estate planning, looking at what you do with your assets when you die.

“I would really like to see philanthropic giving become the fifth and equally important step in the financial planning process,” Mr Bailey explained. 

“With a large portion of the wealth in Australia classified as first generation, the trend has been for individuals to pass all their wealth and assets onto their children, but there are so many effective ways to contribute to charity, for example through private or public ancillary trusts, without neglecting your children.”

“And empowering your children by teaching them about financial planning and charitable giving rather than simply gifting them with money is rewarding for both parties,” he explained.

Mr Bailey concluded by saying that philanthropic giving should not be seen as something that only wealthy people can do. 

“Every one of us has three things to offer,” he said.

“Our time, our talent, and our treasure. Even if you don’t have treasure to offer, you do have talent and time. And these all-important gifts can make every bit as much of a difference as money. To you as well as to those you help.”

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This was the message from the inaugural Entrepreneurs’ Summit hosted by Opportunity International Australia in Sydney this week.

The Summit brought together four leading experts in the field of social entrepreneurships, each of whom shared their vision for the future of social entrepreneurship, with discussions ranging from ways in which Government can play its part, to how Australia can foster a culture of philanthropy and volunteering in Australia.

The four panellists leading the discussion were Kristina Keneally, the former Premier of NSW responsible for the induction of social impact bonds, Benjamin Chong, CEO of Right Click Capital and business mentor, Allan English, Founder of Silver Chef and the English Family Foundation and Celia Hodson, CEO of the School for Social Entrepreneurs.

As CEO of Right Click Capital, Ben Chong identifies, invests in and helps grow a range of internet businesses.  Mr Chong said that the culture of volunteering and philanthropy in Australia was not as strong as in some other countries and needed to improve if young social entrepreneurs were to receive the support they need.  Regulation is also a barrier according to Chong.

“Social entrepreneurs need the freedom to move quickly with their ideas and not be strangled by red tape,” he said.

Allan English spoke about his experiences as a philanthropist and entrepreneur, and said that firing up young people already passionate about social causes is key. 

“Giving someone a higher purpose to work towards seems to give them permission to really succeed,” he said, “And I find that when I am employing young people, the fact that they will be working for a company that gives back to the community in a real way through organisations like Opportunity International Australia is very appealing, and can make the difference to attracting the best people.”

Celia Hodson, CEO of the School for Social Entrepreneurs agreed, adding that it is crucial to give social entrepreneurs and enterprises the tools they need to become sustainable, and for these businesses to value themselves and act, in many ways, as a real business does.

“Too many social entrepreneurs don’t even consider paying themselves a wage, let alone looking at business processes, cash flow management and the like, and that has to change,” she said.  “If a social enterprise isn’t successful because it is not well run, then it achieves nothing.”

As the pioneer of the concept of social impact bonds in Australia, Kristina Keneally concluded by saying that there were myriad difficulties for social entrepreneurs seeking support, in that Government tends to be inflexible, risk-averse and entrenched in the past.  “They will implement some good ideas, but then don’t give them the time and support they need to be successful, and are too quick to punish failure by cutting programs rather than looking at ways of improving them,” she said.

“The bottom line is that we all need to sit down and have the really hard conversations.  Tax revenue is falling just as demand for social services is rising, and the reality is that Government can no longer afford to deliver services at a level expected by most Australians.  Other ways forward need to be found.”

“Increased support for social entrepreneurship is one way that the shortfall could start to be addressed,” she explained.

The host of the event, Robert Dunn, CEO of Opportunity International Australia, concluded by saying that the type of microfinance programs that Opportunity International supports often start because of a passionate response to poverty and disadvantage.

“Social entrepreneurship in Australia is no different, and that it is why we are so pleased to be looking at ways of encouraging social programs everywhere.”

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Across the rest of the world there has been explosive growth in the number of social entrepreneurs over the past decade— innovators who take a business-like approach to solving social problems.  According to Opportunity, whilst Australia has long lagged behind its foreign counterparts in nurturing social entrepreneurship, the tide appears to be turning.
 
Universities are embracing the discipline of social entrepreneurship, both in terms of the research they conduct and the options for studying this field.  For the one million university students in Australia there are now at least six universities in Australia offering social enterprise or entrepreneurship studies.  This compares to 250 courses offered in the US, where university students number more than 17 million, and 20 opportunities to study this discipline for the UK’s two million university students.
 
Stephen Robertson, Philanthropy Director of Opportunity International Australia commented: “The growth in social entrepreneurship as a field of study is in response to student demand.  For many years prominent universities in America, such as Yale, have offered courses in the field and we are seeing burgeoning interest in Australia.  For example the University of Sydney, Swinburne and Adelaide University all offer either modules of study or full courses for budding social entrepreneurs and the School for Social Entrepreneurs has also recently set up its Australian campus.”
 
Opportunity also credits the Government with helping to stimulate social businesses through initiatives such as The Social Enterprise Development and Investment Fund (SEDIF) which provides funding to social enterprise.  SEDIF is also playing a role in helping to engage the private sector. A total of 105 social enterprise projects have been funded to the total value of $73.6 million.
 
While more is being done to encourage new enterprises through the likes of SEDIF funding programs, Opportunity also claims that social entrepreneurialism is the new breed of philanthropy and is attracting Australia’s top entrepreneurial minds.
 
Stephen Robertson commented:  “We are seeing a trend for entrepreneurs who have built successful empires to apply their skills to social businesses. If you were to look across the BRW Rich List you would see many faces now successfully turning their hands to social enterprise or supporting entrepreneurs in some capacity.  Indeed many of our own donors are entrepreneurs who have chosen to support Opportunity because nurturing and helping entrepreneurs in developing countries is what we are all about.”
 
Opportunity claims that there are a number of synergies that companies look for when offering support to social entrepreneurs and social businesses:  a logical fit between their existing business and the new venture, chemistry between the parties, a natural fit with the brand, commercial viability, longevity and ability to leave their legacy, and opportunity for the entrepreneur to grow and develop their personal skills.
 
Stephen Robertson concluded: “Entrepreneurs are not prepared to throw money at any social business, rather they are extremely considered and the opportunity must tick all the boxes, both commercially and personally.”

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