Philanthropic giving grows, future uncertain

04/05/2020 - 15:41

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Giving increased last financial year, but the economic fallout from COVID-19 will affect the potential for generosity into the future.

Philanthropic giving grows, future uncertain
Charlie Bass says his foundation may give less next financial year. Photo: Gabriel Oliveira

Giving increased last financial year, but the economic fallout from COVID-19 will affect the potential for generosity into the future.

The top 10 philanthropic foundations in Western Australia upped their combined giving by $34 million last financial year, with this year set to be even more lucrative before the full economic effects of the COVID-19 pandemic are felt in 2021.

In the 2019 financial year, the top 10 philanthropic foundations distributed a total of $148.2 million, compared with $114.3 million in 2018. 

Andrew and Nicola Forrest’s Minderoo Foundation led the BNiQ list of philanthropic foundations, distributing $75.3 million in 2019.

According to Minderoo’s annual report, the largest areas of expenditure were the construction of Forrest Hall 2 with the University of Western Australia, establishing Flourishing Oceans, and the expansion of partnerships within its Collaborate Against Cancer initiative.

(click here to view a PDF version of the full special report)

In 2020, Minderoo Foundation has responded to current crises, establishing a $70 million Fire Fund to help fire-affected regions recover and work to ensure similar devastation is not seen again, and committing up to $160 million to a COVID-19 response.

The benefits of its COVID-19 response have already been seen, with large volumes of masks and gloves and more than 10 million test kits sent from China.

Mr and Mrs Forrest recently topped up the foundation with a $520 million donation, taking their total contributions to $2 billion since 2001 when the organisation was established.

WA’s second largest philanthropic foundation, Channel 7 Telethon Trust, is also increasing its giving. Its latest annual report shows it distributed $34 million to 51 organisations in the year to December 2018, up from $24.5 million in 2017. Channel 7 Telethon Trust recently announced it had distributed even more over the past year – $42.6 million to 54 beneficiaries.

In April, Channel 7 Telethon Trust announced it had distributed the $42.6 million it raised at Telethon in 2019 to 54 beneficiaries.

Big movers on the BNiQ list included the Law Society Public Purposes Trust, which is ranked fourth (up from 21st) after distributing $6.8 million last year.

According to the trust’s website it distributed triennial grants to The Old Court House Law Museum, The Francis Burt Law Education Programme, and The Mock Trial Competition.

Royal Perth Hospital Medical Research Foundation fell down the BNiQ rankings to ninth, after donating $1.5 million in 2019, compared to $2.4 million in 2018.

Foundation chief executive Jocelyn Young said less funds had been distributed because the foundation paused its traditional funding to undertake a strategic renewal.

While the foundation is ranked ninth by funds distributed last financial year, it has assets totalling $71.3 million.

Ms Young said a majority of the foundation’s assets were from a major bequest from Ray Dobney 12 years ago, and that the foundation was now deciding where to spend the money.

Other notable changes on the list include the absence of the Bankwest Foundation, which has been discontinued after the bank decided to pursue a new giving strategy through the company.

Pandemic impacts

Recent research from JBWere shows philanthropic giving holds up well during years of equity market falls, and slowdowns are not often seen until the following year because of the payout requirements based on the previous year’s income balances.

Philanthropy Australia chief executive Sarah Davies spoke at a Centre for Social Impact webinar in late April about the challenges and opportunities for the philanthropic sector during the pandemic.

Ms Davies shared some preliminary survey data collected from 35 members who suggested most charities had changed their grant-making approach to make it more flexible, and half had made additional funding available.

“I actually think the Australian response has been terrific, it’s really fast, it’s really generous, it’s very thoughtful, it’s very considered,” Ms Davies told the webinar.

However, she said a volatile share market could make it more difficult for foundations to give in the future.

“One of the challenges for philanthropic providers is the corresponding economic volatility and the hit then to the value of the capital in the corpus that is the engine, in many of them, that drives the distribution of the grants,” she said.

McCusker Charitable Foundation director Mark Bellini said the foundation’s returns would be affected by the economic climate.

“The reduction in dividends being paid by companies along with historically low interest rates has created a challenging investment landscape,” he said.

McCusker Charitable Foundation, ranked sixth on the BNiQ database, distributed $4.8 million in the 2019 financial year compared to $5 million in 2018.

Foundation director Tonya McCusker said supporting WA-based medical research had always been the objective of the foundation, and in 2019 it supported 50 charities including the Harry Perkins Institute of Medical Research and Lions Eye Institute.

Mrs McCusker said that, since the outbreak of COVID-19, the foundation had received an increase in requests for financial support for coronavirus-related research.

“But the landscape was changing daily and it was difficult to assess with confidence, whether the proposed research would make a significant difference, or whether it was ‘opportunistic’,” Mrs McCusker told Business News.

“Particularly since, due to strong government leadership, our health system has to date not been overwhelmed with corona cases as originally predicted.”

Instead, Mrs McCusker said the foundation had chosen to provide support to programs such as St Patrick’s Community Support Centre’s Doorstep Dinners, and domestic violence programs through Zonta House.

“The directors are more carefully assessing the excellent research programs being promoted by the WA Health Translation Network and the Australian National Phenome Centre,” she said.

Mrs McCusker said the foundation was also concerned that support for established WA charities such as Cystic Fibrosis WA and Parkinson’s WA may wane with the downturn of the economy and the focus on COVID-19.

The Bass Family Foundation, ranked 12th on the BNiQ database, distributed $1.1 million last financial year largely to causes to educate disadvantaged youth, including Ronald McDonald House Learning Centre, EON Foundation, and scholarships for indigenous students at Wesley College’s Morditj Mob program.

Bass Family Foundation founder Charlie Bass said the foundation would be able to make a large contribution to the charities it supported this year, but possibly less next year due to the financial impacts of COVID-19.

Mr Bass established the Centre for Entrepreneurial Research and Innovation in 2015 to help facilitate the development of a sustainable high knowledge and high-value economy in WA.

His foundation contributes to CERI, which also receives funding from the government and other foundations.

Mr Bass said COVID-19’s financial impact on the foundation’s investment portfolio could mean a decrease in philanthropic and government funding for CERI.

“The biggest impact would be the value of the portfolio on June 30, and if you give away the minimum required 5 per cent, what that is going to be,” he said.

“That could also affect some of the donations that we get.

“I am expecting that because of the bailout that the federal government, in particular, and the state government are doing now, there will be less funding for research, innovation or accelerator type grants.”

Mark Glasson says he is expecting to see the financial impacts of COVID-19 next quarter. Photo: Gabriel Oliveira

Charities status

Most of the top-ranked charities on the BNiQ database are disability organisations, which receive funding from the National Disability Insurance Scheme.

Activ Foundation is the top-ranking charity with revenue of $108.1 million, 78 per cent of which comes from government grants.

Fellow disability services organisation Ability Centre, ranked fifth on BNiQ with revenue of $74.5 million, also receives a majority of its revenue from the government.

Ability Centre chief executive Jacquie Thomson said there had been a drop in clients using its therapy services due to COVID-19, resulting in a decrease in revenue from the NDIS.

We have been working really hard with those customers to look at alternate [sic] ways of delivering therapy supports because we don’t want people to regress in terms of the gains they have made through physio and other therapies,” Ms Thomson said.

“We certainly don’t want to see children missing important milestones so we have been readjusting our service offering into teletherapy.

“The other area where we experienced a change in demand is what we call our community opportunities program where we support people with disabilities get out and about and enjoy their communities.”

Ms Thomson told Business News the organisation was also burdened with unplanned expenditure to deal with the pandemic, including buying PPE, equipment to allow people to work from home, and additional cleaning products for staff.

She said the organisation was applying for JobKeeper, which was recently changed to allow charities to sign on when their revenue, excluding government grants, dropped by 15 per cent.

However, Ms Thomson said the community had been quick to help the organisation.

“What we have also seen is a real sense of community from donors and supporters out there who have come to us and offered what they can, and that’s been everything from money and IT equipment to assist us as we deploy our workforce to work from home and PPE,” she said.

Ability Centre was recently gifted an unsolicited $40,000 donation from members of the Australian Chinese community and 4,000 facemasks from the Western Australian Chinese Chamber of Commerce.

Royal Flying Doctor Service Western Operations, ranked second with revenue of $87.2 million, is one of the few charities near the top of the list that does not offer disability services.

The RFDS is increasing its capacity to deal with potential demand due to COVID-19 and has been the beneficiary of recent donations from government, businesses and philanthropists, including $2 million from BHP.

Social services organisation Anglicare WA, ranked as the 11th largest charity, earned revenue of $48.2 million last year compared to $44.4 in the 2018 financial year.

Anglicare WA chief executive Mark Glasson said there had been a growth in philanthropy during the past year or so after the mining downturn.

Although the organisation hadn’t felt a significant impact from COVID-19 yet, Mr Glasson said it was expected in the next quarter.

“A large part of our fundraising calendar happens in the last quarter of the year,” Mr Glasson told Business News.

“As we approach tax time, people tend to think about giving, and our Winter Appeal, which is due to go live very soon, we are expecting that will be impacted.

“We use events as ways to raise funds and there is just no way to conduct events at the moment so we are looking at changing the nature of one, but our income channels through events and mass campaigns, we expect to be challenged.

“What’s really been good, though, is the number of corporations and philanthropists who have made contact.”

Mr Glasson also expected the demand for services for people in financial hardship to increase.

“If you just look at those Centrelink queues, when we get through this public health risk, we are going to have a social crisis if we don’t start moving on that need soon,” he said.

“We are expecting that demand will increase for our services.”

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