The awesome philanthropic response to the Victorian bushfires provides insights into the powerful motivations behind giving, writes Simon Mumme.
As emergency services fought the inferno that razed towns outside Melbourne in February, Australians were helping survivors to cope and rebuild their lives.
Ten days after “Black Saturday”, when firestorms ravaged regional Victoria, the national peak body for philanthropy, Philanthropy Australia, co-hosted a meeting with the Foundation for Rural and Regional Renewal (FRRR) at Melbourne Town Hall to discuss how the philanthropic community can best undertake relief and recovery efforts.
The philanthropic response should be composed of two parts, the meeting concluded: emergency relief, followed by longer-term funding to help rebuild lives and communities.
Individuals have donated hundreds of millions of dollars to the bushfire relief fund set up by the Red Cross. Corporate and government efforts have seen much more relief funding flow to the cause. But those at the meeting said that philanthropy’s role lay more in assisting medium- to long-term recovery efforts.
Financial advisers to people engaged with philanthropic ventures can play a key role in ensuring these clients manage their donations wisely.
Speaking at a monthly meeting of the Professional Advisers Network, convened by Sydney Community Foundation and hosted by Centric Wealth, Ivan Ang, of Fitzpatrick Professional Advisers, gave a presentation about the powerful role of compassion in philanthropy – and how advisers must strive to accommodate it in the strategies they set for clients.
Financial advisers to clients engaged in philanthropy should be prepared for events of the magnitude of the Victorian fires and the 2004 tsunami and the resulting compulsion to give.
“With clients, there is a need to prepare for the ad hoc. We need to look at how we incorporate a discretionary amount above the critical funding [to other projects] that your clients are supporting on an ongoing basis,” Ang said.
“You have general giving, and then a discretionary amount that clients should set aside for emergency purposes. It’s about planning in advance.”
This was important because some charities might see their cashflows diminished as regular donors direct money to bushfire relief efforts instead.
“Some charities will see cashflow decimated because of what’s happened.
“What I’m encouraging all advisers to consider is to help with planned giving but also accommodate for the ‘what-ifs’.”
For most donors, assisting bushfire survivors means contributing to appeals from the Red Cross or The Salvation Army. But for dedicated philanthropists, it involves assessing needs, formulating targeted projects and coordinating efforts before committing funds.
One key message from the Philanthropy Australia and FRRR meeting was that as the bushfire tragedy fixates the nation’s consciousness, and disaster relief funds are raised, philanthropists should wait and plan to give strategically for the long term.
Philanthropists should also collaborate to gather solid information from communities, charities, government and other funders, and share details of their plans with organisations already on the ground in order to strengthen efforts and prevent overlap.
Ang said that as the nation’s attention shifted from the bushfires to other matters, with the Australian recession taking precedence as Professional Planner went to press, the needs of the community would remain.
The Philanthropy Australia and FRRR meeting noted that after Hurricane Katrina struck the US Gulf Coast in 2005, many funders were engaged in the area for two years afterwards.
Following a disaster, a system-wide approach is required to rebuild communities: 10 grants of $500,000 deployed smartly to address different areas of need would have 10 times the impact of one $5 million grant, the meeting concluded.
In the case of the Victorian bushfire recovery, Michael Raper and Andrew Coughlin of the Australian Red Cross said the government will establish a panel of community representatives who will determine how relief funds are spent. In the first phase, $30 million will go to families of the deceased or severely injured, and those who have lost their primary residence.
Ang also spoke of another crucial motivation for philanthropy: religion. He said that advisers should ask if clients have a religious affiliation and if they would like to link it with a philanthropic project. Pointing to the 2005 Giving Australia report from the Australian Government, he noted that about one in every three dollars donated by individuals in Australia – or 36.1 per cent – went to religious institutions.
Religion is often a key value for clients that they want reflected in any philanthropic pursuit they make or in the legacy they aim to leave, he said.
“How many of you know which religious orientation your clients have? How many of you ask that question?
“If you don’t include it in your fact-find, include it as a discussion point.”
For example, clients might tithe to a church. As this can represent up to 10 per cent of their income, it is a significant aspect of their financial affairs.
“If clients have a faith perspective, you have to understand what that means to them.”
Advisers must be open to learning from clients how different faiths – whether Christian, Islamic or other religions – will influence their giving.
“Wealthy Christian clients often hold onto their wealth very lightly,” he said, adding that they acknowledge that wealth is transient, and that just as the Lord giveth, the Lord taketh away.