The 2014 Rich 200 List will appear in the Wealth Issue of the July edition of the AFR Magazine. At newsstands on Friday morning, 27 June, and free online via BRW.com.au. I wonder if some folks buy it just so they remember to call their relatives to tell them how lucky they feel to be part of such a wealthy family…
It’s a marvellous time of the year to publish the Rich 200 List – as of Friday morning there are only 4 days left in the tax year to make income tax-deductible gifts to your favourite DGR (deductible gift recipient). Bravo, AFR! A nice nudge!
We are indeed a lucky country, and if you are lucky enough to have earned more than $180,000 in the tax year ending 30 June 2014, the Commonwealth will refund 45 cents on the dollar (46.5 cents on the dollar including the Medicare tax levy) for every single dollar you give to a DGR. So, all other things equal, for every $1,000 that you give to a DGR charity, the Commonwealth will reduce your tax liability for 2013-2014 by up to $465. Give $1,000 in cash but after taxes you only spend $535. Sweet!1 And a big THANK YOU to all of our fellow taxpayers for giving us (via the ATO and our tax system) this massive incentive to share with those less fortunate than ourselves. Win-win-win. Hurrahs all around!
And since the AFR Magazine is an insert in Friday’s AFR, you’ll get this year’s BRW Rich List at a significant discount to previous years when it was published separately by BRW. Bargain!
But for all you folks who keep track of the wealthy as part of your profession, or just as a hobby, here’s my #1 reason to pick up this year’s AFR Wealth Issue on Friday: They are running a story on the recent run (over the last 24 months or so) of REALLY BIG CHARITABLE GIFTS made in Australia. Charitable gifts of $50,000,000 or more. That’s right – gifts of 50 million dollars or more. “Giving it Away.” Pages 26 to 32. Interviews with a host of REALLY BIG GIVERS and why they make REALLY BIG GIFTS. In the same issue as the Rich 200 List. Now, that’s journalistic bravery! Not to mention clever psychology…
Not so long ago (just 6 years – in 2008), I recall a conversation with one of the godfathers of Australian philanthropy as to what constituted a REALLY BIG GIFT in Australia. He told me that a gift of $1,000,000 for a capital project (i.e., a new building, a new wing, etc.) was a “big gift” and a $2,000,000 gift was “about the top amount” as far as a single big gift went. For an Australian. (By some unspoken agreement, we avoided the name of a certain foreigner who regularly gave more than that here.) And a $10,000,000 gift was the “next breakthrough threshold” that any seasoned fundraiser could realistically seek. (And he was spot on – shortly thereafter he secured a $10,000,000 gift for his university, and set a new record for what constituted a Big Gift by an Australian to an Australian organisation.)
And lo and behold, just 6 years later, we have breached the $50,000,000 level, and done it 5 times since mid-2012. An incredible leap in such a brief time!
Here’s my tally of the recent (one-off) gifts of $50,000,000 or more in Australia. (If I’ve missed any, please let me know.) I salute you one and all!
1. $50,000,000 from Graham and Louise Tuckwell for scholarships to the Australian National University. In July, 2012. (tuckwell.anu.edu.au)
2. $50,100,000 from Clive Berghofer for the Queensland Institute of Medical Research – now the QIMR Berghofer. In August, 2013.2
(qimrberghofer.edu.au/page/News__Events/Media_Centre/Media_Releases/
Archive/2013/Clive_Berghofer_makes_record_501million_donation_to_QIMR)
3. $65,000,000 from Andrew and Nicola Forrest for post-graduate fellowships in Western Australia and a brand new residential building at the University of Western Australia to house the Forrest Fellows. In October, 2013 (campaign.uwa.edu.au/our-priorities/research). Watch out Rhodes Scholars – the Forrest Fellows are coming!
4. $60,000,000 for arts in Sydney – $30,000,000 from the Packer Family combined with $30,000,000 from the Crown Resorts Foundation. In November, 2013. (crownresorts.com.au/crown-resorts-foundation/crown-resorts-foundation)
5. $100,000,000 from the Westpac Bicentennial Foundation for university scholarships. In April, 2014. (info.westpac.com.au/200years)
Bravo to these individuals and their families for their personal philanthropy and bravo to the shareholders of Crown Resorts and Westpac for their corporate philanthropy! (And kudos to the corporate leaders who brought their Boards and shareholders along.) This is an amazing string of BIG GIFTS, at a new level, in a very short period of time!3
And to put this swag of BIG GIFTS in proper perspective, the only previous gift in Australia of $50,000,000 or more was some 5 years ago. The Atlantic Philanthropies 4, founded by Chuck Feeney, was the first (to my knowledge) to make a gift of $50,000,000 to an Australian organisation – the Translational Research Institute (TRI) in Brisbane, led by the brilliant Professor Ian Frazer. It was July of 2009. At the same gathering that day in Brisbane at the QIMR, in a flurry of giving still un-matched in our great country, Feeney simultaneously announced two other major gifts – one for $27,500,000 for the Queensland Institute of Medical Research5 and one for $25,000,000 for the Queensland University of Technology. Total gifts by The Atlantic Philanthropies in one day of $102,500,000. And combined with other funders (primarily the organisations themselves, the State Government of Queensland, and the Commonwealth Government of Australia) they collectively launched the construction of three new buildings valued in excess of $750,000,000. In the midst of the Global Financial Crisis (GFC).
So, a huge tip of the hat to the Tuckwells for bringing Australia back to the $50,000,000 gift level and likewise for all the rest that followed! In the future, I hope this period will be judged as a pivot point for philanthropy in Australia.
(Shameless plug alert…) If you haven’t made a tax-deductible gift this financial year, please give it some serious thought. By 30 June. Four more days. It will make you feel good. And don’t just take my word for it – there is plenty of empirical evidence from research psychologists pointing out that giving to others makes us happier than doing a lot of other things, including giving “gifts” to ourselves.
Some suggest giving 1% of your annual income as a normative annual giving level. I go a bit further and suggest 1% of your net investable wealth (i.e., 1% of your net worth minus the equity value of your primary residence). Whether you have a lot or a little, we can all try to be proportionally generous. That’s a fair go!
PS: True story. A friend said “If you were worth $20 billion, then 1% would be $20 million.” I said “Mate, you need a new calculator – 1% of $20 billion is $200 million. Every year.” He almost fell off his chair. But think about it – if you only give away 1% of your net investable wealth each year, you will always have 99% of your wealth left over to live on. Plus your primary residence to live in. Always. As long as you live.
1 If you are in a lower marginal tax bracket, you’ll get a lower percentage deduction. But it’s still a good deal. (And please don’t whinge to me about the “inherent unfairness” of the progressive tax system we have. You will look like a knucklehead when I explain to you why lower tax rates for lower annual incomes are inherently fair.)
2 Disclosure: Chuck Feeney assisted QIMR with helping to organise this gift. And I got to carry Chuck’s “briefcase” (a plastic bag) to the meetings with Clive Berghofer et al. and the QIMR leadership team (Professor Frank Gannon, Professor John Hay, et al.)…a ringside seat.
3 I know, I know…there are a lot of other factors at play here, like different motivations between personal giving and corporate giving, the terms of the gifts, anonymous vs. public giving, tax-deductibility vs. non-tax-deductibility, relative giving (i.e., proportional generosity) vs. absolute $ amount giving, intergenerational wealth vs. this-generation wealth, and so on. But that is for another time. The Big Point here is that, anyway you look at it, these are Landmark Gifts.
4 Disclosure: I was an employee of The Atlantic Philanthropies at the time.
5 Now known as the QIMR Berghofer.
