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Hewison Private Wealth - Insights
Hewison Insights


Chris Morcom
Partner/Private Client Adviser
10 Jun 2015

As an adviser with a keen professional and personal interest in philanthropy, the announcement at the end of May by the Hon Scott Morrison MP of a three year program to promote a culture of philanthropic giving and volunteering in Australia is welcome news.

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 50th 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.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.