Communities and charitable organisations around Australia depend heavily on the efforts of volunteers, and I believe increasing participation in volunteering is good for our country’s social fabric.

Corporate philanthropy can be a sticky issue for many organisations.  On one hand there is the view that corporations have a social contract with the communities in which they operate.  On the other hand is the profit motive, and the responsibility to manage a corporation’s assets for the owners of that business, i.e. the shareholders.

At the recent 50^th Annual General Meeting of Berkshire Hathaway, Warren Buffet was questioned as to how corporations could be encouraged to make an even greater impact on the lives of those who are not shareholders.  Buffett’s answer is worth noting.  He commented that he was a much bigger supporter of individual philanthropy versus corporate philanthropy.  “I work for the shareholders, and I feel that they should get to decide [what] to do with their money. We encourage our companies to continue doing what they do with their communities, but I don’t think it’s my business to write a cheque to my alma mater and do it with company funds,” he said. Buffett also stated that he has real reservations about corporate philanthropy.

To a large extent I tend to agree with Buffett and in my opinion, it is important to engage with the right people when discussing philanthropy. There is no point appealing to the captains of industry if they are not prepared to put their own personal funds towards philanthropy.

There are many options that individuals and families face when considering the best way forward with philanthropy.  Options range from giving directly to charities, to using an existing Public Ancillary Fund or to setting up their own Private Ancillary Fund.  Seeking advice from a professional financial planner with expertise in this area can be a great way to further develop options and find a solution.

All foundations, large or small, generally aim to build up a lump of money from which they can distribute earnings towards their philanthropic goals.  Some aim to use up the capital over time, others aim to be perpetual.  In all cases, appropriate investment planning aligned to the objectives of the foundation is essential. 

Hewison Private Wealth advisers have expertise in assisting individuals with their philanthropic objectives, and we already assist a number of charitable organisations with the management of their investments.  If you are interested in knowing more, please contact one of our advisers.