Philanthropy and Australian Society

As a society Australia needs to think about the phenomena that is the growth of the philanthropic sector and where it’s going, writes philanthropist Marcus Fielding.

Philanthropy is good. So more philanthropy is better…right? I’m not so sure…

As the ‘philanthropic sector’ grows year on year, perhaps it’s time to get in the helicopter to have a look down and reflect for a moment.

Liberal democratic societies work on a pretty simple model. The people elect a representative government that works with a public sector to look after their collective interests.

That government achieves this by collecting taxes and redistributing wealth and opportunity across society so that it becomes more equitable over time. Welfare support is provided to those who are deemed to require it – ostensibly for a temporary period. Yes, there are lots of politics, policies and issues, but that is essentially the way we have existed for some time now. And the private sector provides the engine for the creation of wealth through innovation.

But in many liberal democratic societies a third sector has appeared and grown over the last century or so. It too seeks to redistribute wealth and opportunity across society so that it becomes more equitable over time – essentially paralleling the role of the government and the public sector.

Now, in altruistic terms that is probably not a bad thing. But is there a temptation for the government to reduce funding in certain areas because it knows that the philanthropic sector can take over responsibility? Has this already consciously or subconsciously occurred?

There must be a reason why the number of charities is growing so significantly. Is it because the demand for their services is growing? Despite all the government welfare and philanthropic efforts, is the number of disadvantaged people increasing? Is it because the government is financially withdrawing and creating a vacuum to be filled by charities? Has the rise in the number of trusts and foundations in the last decade given rise to a commensurate increase in the number of charities? Is it because we are now getting involved in areas that haven’t been issues in the past?

Whatever the reason, let’s explore where this trend could go. Love them or hate them, we as a people elect a government, which we then empower to develop and implement policies and budgets that witness the redistribution of wealth. This process is rarely neat and debate ensures that stakeholders can influence decisions. And invariably, if the people don’t like the way a government is performing, they have the opportunity to replace it every so often. But at the end of the day, we pay our taxes and hope that the government will put our money to good uses that will benefit all Australians.

Philanthropy is not as democratic. We all choose which organisations we want to donate to or to volunteer our time and energy. Those that direct the considerable wealth of trusts and foundations choose who to support.

And with over 1000 Private Ancillary Funds and a growing number of corporate foundations, this group is beginning to have a substantial financial influence. And every dollar that is placed into a trust or foundation or donated directly to a charity is one that does not get paid in tax.

So the government is essentially saying we are going to let you work out where the wealth should be redistributed. Is that appropriate? Is it perhaps an abrogation of responsibility as a government working for the benefit of a national population?

Some would say that the government is not doing a very good job of managing the revenue it derives from taxes and therefore cutting them out of the process is a good thing. Others would counter to say that philanthropy should be applied to homelessness more than the arts and that private citizens cannot know where the priority of needs is across a society. There is merit in both arguments.

Another perspective is that an increasing amount of welfare and philanthropy runs the risk of undermining the basic human instinct to adapt and survive. The more that is done for disadvantaged people the less motivated they are to do for themselves.

Now, please don’t label me as a heartless bastard, there are clearly people in our society that will demand and deserve assistance – possibly throughout their lives…and that’s OK. But welfare and philanthropy that makes a bad situation more bearable runs the risk of sustaining the problem. Better welfare and philanthropy seeks to make the problem go away. Indeed, the ultimate goal of a government is to try and make a society where there are no problems.

So what? My aim here was not to say there is necessarily a problem, nor to suggest a certain course of action. But as a society we need to think about the phenomena that is the growth of the philanthropic sector.

Should we just let it grow? Is anyone managing the delineation of responsibility between the government and the philanthropic sector? If not, is there a risk of gaps and duplication of effort? Does the philanthropic sector (especially the financially significant players) need to be controlled and regulated by the government like the private sector? Does the relationship between government and the philanthropic sector need to be more sophisticated than it is at present?

I simply hope that some discussion is stimulated by this article because I’m not sure that laissez faire is a sound principle for societies to operate under.

About the author: Marcus Fielding is a trustee of the Fielding Foundation and the Weary Dunlop Rugby Foundation. He also chairs Philanthropy Australia’s International Giving Funders Group.