15/10/2013 - 14:55

A lesson in giving

15/10/2013 - 14:55

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It's hard to imagine anyone being unhappy with Andrew and Nicola Forrest’s remarkably generous $65 million donation to establish a system of educational scholarships to rival that created by Cecil Rhodes more than 100 years ago.

A lesson in giving
GENEROUS: Andrew and Nicola Forrest’s $65 million donation is understood to be Australia’s largest single philanthropic donation.

It's hard to imagine anyone being unhappy with Andrew and Nicola Forrest’s remarkably generous $65 million donation to establish a system of educational scholarships to rival that created by Cecil Rhodes more than 100 years ago.

But there is a small group of people that will be looking at the creation of the Forrest scholarships and fellowships at the University of WA and wondering whether the man behind Fortescue Metals Group and his wife have done it to pressure them to respond in kind.

Those people are the other members of Perth’s super-rich club, which is dominated by people who have made their fortunes from mining in the same way Mr Forrest has from iron ore, and Mr Rhodes did from South African diamonds in another era.

In time, the Forrest scholarships could grow to be as significant as the Rhodes scholarships, though there does currently appear to be one significant difference –the absence of a sporting specialisation, which is part of the Rhodes selection process.

Perhaps Mr Forrest will insert a sporting requirement in keeping with his interest in athletics and boxing (inside and outside the ring).

Those details will unfold as the scholarships take shape and a fabulous, and lasting, memorial will be created in WA for a self-made man who has ruffled a few feathers on the way to the top but is now showing remarkable leadership in giving back to his community.

What Perth’s other ‘richies’ will make of the Forrests’ support for tertiary education is a question only they can answer, but if it starts a trend there is another question: what might WA get out of it if the $65 million donation is matched on a proportional basis?

One way of looking at that question is to start with the estimated wealth of WA’s richest people and to then apply what might be called the ‘Forrest formula’ – the percentage of his current wealth being handed over to UWA.

The easiest wealth guide is that produced by the business magazine BRW, which, in this year’s list of Australia’s wealthiest had 11 WA entrants in the top 100, including Gina Rinehart ($22 billion and top spot), Kerry Stokes ($2.47 billion, and 12th) and Len Buckeridge ($2.1 billion, and 17th).

Mr Forrest’s fortune stood at $3.66 billion when the BRW list was compiled last May, ranking him at 9th nationally. Today, with the iron ore price up his fortune stands at around $5 billion, a number that is the starting point for the calculation because the $65 million heading for UWA represents about 1.3 per cent of his current wealth.

Collectively, the other 10 WA members of the WA list are estimated to be worth $33.6 billion, with the lion’s share of that attributable to Mrs Rinehart.

If 1.3 per cent is used as the reference point for charitable donations by the other 10, then around $436 million could be available for philanthropic purposes, with Mrs Rinehart having the greatest capacity for generosity.

If Mrs Rinehart wanted to make a proportional endowment to match Mr Forrest’s gift, then the 1.3 per cent ratio points to the potential for a $286 million donation to a cause of her choosing.

Many of the rich-list members already make substantial charitable donations, and most prefer to do it without publicity.

What Mr Forrest has done is throw a spotlight on the size of the fortunes that have been created in WA over the past 20 years, and the potential for some of that wealth to be directed into good causes that will continue long after the individual involved has died.

Given his love of boxing, it’s not stretching a point to say that Mr Forrest has thrown a glove on the ground and issued a challenge to Perth’s super-rich to match his generosity in creating a world-class and long-life educational monument in WA.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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