Chris Wilson, Partner at Koda Capital’s Philanthropy & Social Capital division, has worked at the nexus of financial services and philanthropy for more than 14 years.
Alongside his career in wealth management, Chris has also been heavily involved in philanthropy and the not-for-profit sector as a director of the Betty Amsden Foundation, co-founder of Plus One, a founding committee member of Impact100 Melbourne and former chair of the Reach Foundation.
“We are so lucky to live in this country in this time and it’s ingrained in me that we have an obligation to give back and share that luck,” Chris explains of his intrinsic motivation. “It’s something I want to instil in my three kids.
“Plus, it’s fun, rewarding, challenging and enlightening. I firmly believe it helps bring balance, perspective and fulfilment to one’s life. Fortunately, I’ve been able to build a career around philanthropy and I’ll be forever grateful for that.”
Chris recently shared his thoughts about the changing expectations of philanthropy and the value a conversation about giving can bring to deepen relationships with private wealth clients.
Philanthropy has been a key offering at Koda Capital since its inception. Can you talk about the central role giving plays at the company?
CW: Philanthropy has been a core component of Koda’s service proposition since the very beginning. As a business, the Founders understood how critical philanthropy is to private wealth clients and that it had to play a fundamental role at Koda.
For many of our clients, the philanthropy conversation is where they derive the most satisfaction and joy when it comes to their wealth planning. It’s also where we get to truly know our clients, their passions and values – it’s often where we discover what is most important to them. If we can support their philanthropic goals and add value to this important part of their lives, it only works to enhance our relationship with them and their families.
Has the way clients engage with philanthropy changed over time? What are they looking for and what do they value most?
Absolutely. They want to be more engaged in the causes they are focussed on, understanding the issues and thinking strategically about where their dollars can have the most impact. Many are looking at bigger picture systems change and thinking about their philanthropy as the risk capital that can create real change. For some, this is also about rolling up their sleeves and actively offering their time, talent and networks as well as their dollars.
More people are willing to get out into the world to talk about their philanthropy, share their experiences and learn from others. Ten years ago, philanthropy felt a lot more private but today, there’s far more collaboration and openness as we’ve seen in the rise of giving circles and major philanthropists talking publicly about their giving and encouraging others to give generously.
We have also seen philanthropists think about other parts of their lives and the impact they are having on the world. This might be their investments, businesses, careers or consumption. They are better aligning these elements of their lives with their values and philanthropy. This is evidenced by the rise of responsible and impact investment. People are realising that they can do good in the world, whilst simultaneously creating wealth and opportunity for themselves and their families.
I think there is also a greater appreciation of the positive impact philanthropy can have on the next generation. It’s the ideal place to begin the intergenerational wealth transfer process. It’s a place to explore important values with the next generation and teach them the value of a dollar in the community. That responsibility comes with wealth. It’s also a safe, fun and rewarding place to introduce the next generation into the wealth management conversation, helping to skill them up for the future.
One thing that I think is still a challenge is the underappreciation of how little you actually need to be a structured giver. You can set up a sub-fund at a community foundation and do the exact same structured giving that multimillionaires or even billionaires do with PAFs.
From a professional adviser point of view, there’s still a lot of work to do to make sure all the financial planners out there are equipped with the knowledge that philanthropic vehicles are available to suit most clients.
What is the most useful lesson you’ve learned in terms of broaching the topic of philanthropy with clients?
Listen first and talk second. Once you get clients talking about their values, family, passions and work in the community, you quickly discover the important role philanthropy can play in their wealth management planning and how best to position it.
When I think about my role, I’m not worried about how much someone gives in the first instance – I just want them to take that first step and make sure their experience is a positive one. They’ll get the reward and the fantastic feeling that comes from giving and they’ll want to do more of it. The growth and larger commitment will come in time. Really, it’s about getting people to take that first step.
How does Australian Communities Foundation help your clients?
What ACF offers is accessible philanthropy with the administrative burden taken care of so that our clients can focus on what’s important, which is giving the money away effectively. It also offers clients a community of likeminded people they can learn and give alongside.
I’m convinced that community foundations like ACF are going to be the engine room of growth when it comes to structured giving in Australia and more and more advice firms like Koda are going to understand and appreciate the critical role community foundations can play in a client’s wealth planning.
From an adviser perspective, the beauty of working with ACF is that you’re working with a partner that is an expert in philanthropy.
ACF will help you take your client on the philanthropic journey and you will get the benefit of sitting alongside your client as they talk about what’s important to them, their values, how they want to give back to the community, and how they want their kids to be involved in the process. That opens up the discussion about wealth transfer and gives you the opportunity to connect with the next generation.
In my experience, philanthropy is a value-add for your clients which, in the long run, makes them happier and more engaged clients.
With each end of financial year, many of our minds turn to tax mitigation. Philanthropy is a simple and rewarding option.
As advisors, you don’t need to be experts in charitable giving and philanthropy, but you do need to know the best time to raise the subject, what the giving options are, and support and guide your clients so they can achieve their philanthropic goals.
Recent research from Netwealth indicates that legacy giving and philanthropy more broadly have become more important for clients over the past decade, with 82 per cent of respondents actively working to grow their giving in the short and long term.
In my role as a Principal and Strategic Adviser with DFS Advisory Services, I have specialised in dealing with high-net-worth individuals and have previously referred clients to community foundations to pursue their philanthropic interests.
I recommend Australian Communities Foundation to my clients because they have deep expertise in this area, they are non-institutional (removing many of the biases that prevail across the financial services industry), and are a very cost-effective, flexible giving solution. It is the Foundation’s expertise in philanthropy and charitable giving that gives me the confidence to refer my clients. Our clients have also valued being part of an ongoing journey, sharing a giving solution with other donors that is community-focused.
If your clients are seeking to reduce their taxable income before the end of financial year, there’s still time to establish a fund within a community foundation, such as Australian Communities Foundation. Unlike a private ancillary fund (PAF), with Australian Communities Foundation there is no requirement to establish a new trust or trustee company. A fund can be established quickly and easily within a public ancillary fund structure without any setup costs.
What is a community foundation and how does it work?
A community foundation is a not-for-profit organisation established to help build local communities. By connecting communities in need to generous people with philanthropic ambitions these foundations help provide communities with the resources they need to create stronger, long-lasting solutions to specific issues. A personal fund with a community foundation gives donors the ability to achieve immediate impact with their philanthropy as well as establish a long-lasting legacy.
Why choose a community foundation?
Australian Communities Foundation is Australia’s largest independent not-for-profit community foundation and is committed to helping donors make informed decisions that lead to meaningful impact.
Many famous names such as Facebook founder Mark Zuckerberg and GoPro founders, Nicholas and Jill Woodman, have chosen their local community foundations as a vehicle for their giving for good reason. They offer a unique vehicle for giving which allows donors to engage with the community, gain knowledge, connect with other donors, build an understanding of the not-for-profit sector, and ultimately, give wisely.
The ATO has more information about public ancillary funds available here.
The benefits of community foundations:
- It’s an easy alternative to setting up a private foundation. A fund with ACF can be set up within 24 hours and there are no set-up fees. They also handle all due diligence to ensure your gift is managed responsibly and ethically.
- Donations to funds within the foundation are tax-deductible. All earnings within the fund are exempt from tax.
- Donor involvement: Australian Communities Foundation offers access to a rich array of workshops, forums, and networking events – all of which enable donors to build their knowledge and involvement in philanthropy.
- With flexible products, expert advice, guidance, and ongoing support, ACF can help your clients implement a giving plan that makes a significant impact.
If you want to learn more about philanthropy and which giving options may be best suited to your clients, learn more about Support for Professional Advisors.
When Sue Dahn took out first place on this year’s list of Australia’s Top 50 Financial Advisers, she became the first woman to hold the coveted title. “I’m delighted for myself and the firm to win this prize and I hope more than anything else it encourages more women into this area,” Dahn told The Australian.
In her role as Partner/Executive Director of Investment Advisory Services at Pitcher Partners in Melbourne, Dahn personally takes care of $1.5 billion worth of funds under management. Beyond her day job, Dahn is a former board member of Australian Communities Foundation and still serves on the Foundation’s investment committee as well as the investment committees of Victorian Traditional Owners Funds, University of Melbourne’s Trinity College and the MTAA Super Fund.
Dahn has been a champion of philanthropy for well over a decade, citing a Gumnut account at Australian Communities Foundation as her first foray into structured giving, circa 2005. Dahn had been curious to learn how philanthropy worked in practice so decided to open a fund herself so that she could provide accurate and honest advice to her clients.
In this recent conversation with Australian Communities Foundation, Dahn talks about building her own “philanthropic nest egg”, why it’s better to give “with a warm hand” and the multiplier effects of philanthropy done well.
Congratulations on being named Australia’s number one financial adviser for 2019! You’ve received many honours over the years, what does this recognition mean to you?
SD: The most recent one was definitely the highest profile one and it’s a personal honour but no-one achieves on their own. It’s really a recognition of the work of hundreds of people over 20 years, the vision of my firm being so fiercely independent, conflict-free and client centred.
You’ve been involved with Australian Communities Foundation for almost 15 years. How did that connection come about and how has your relationship with ACF evolved over time?
My first contact with ACF was when I took part in a professional advisers’ group which could have been as early as 2005. From there, I joined the Investment Committee in about 2007 and was invited to join the Board in 2010.
When I joined that professional advisers group I started my first Gumnut account because I wanted to experience it myself before I advised others to do it. After that I opened a sub-fund for the same reason, then I opened another and another. I have three sub-funds with ACF now.
Does that mean it’s safe to presume it was a positive experience of giving for you?
Yes, it was a positive experience though not without opportunities for constructive advice about how the experience could be better as a donor. If I’m going to back an organisation, I want it to be doing the best it can. I’m not a shy person and if I see something that could be done better, I’ll tell someone! Some of the pipes and wires were not as good back then as they are now.
Have you seen an increasing willingness from advisers to discuss philanthropy with their clients?
My observation is that those discussions have been more client-driven than adviser-driven. Advisers have a lot on their plates so adding yet another area in which to become an expert is yet another demand.
As clients build and accumulate wealth and as their interest in philanthropy grows and as philanthropy gets a greater public profile it will become demand driven. But, that said, more advisers are building their expertise.
What are your thoughts about how financial advisers can best broach the topic of giving?
I like to think there are four or five times in the advice conversation where it’s possible to bring the subject of giving up, for example if there’s a capital gains tax event on the horizon or when doing general tax planning for year end. You can also raise philanthropy when you first meet a client in the ‘getting to know you’ phase when you talk about the big things like life objectives; and then there’s another opportunity when you’re talking about wealth transfer or estate planning.
Good advisers have close relationships with their clients and talking about life and what makes meaning to us all is central to the conversation: whether it’s the arts, the environment, social justice, science or whatever it is that makes meaning in your life. If you’re a good adviser, you know what that is for your client and you can open up the topic of philanthropy by having that conversation.
I really think it’s a conversation you have all the time, but it can be structured at particular milestones.
Can we talk about your personal philanthropy journey and why giving is important to you?
I think giving is important because we have an obligation in life – which is the greatest gift of all – to find out what we’re good at and then spend the rest of our lives doing that in service of a better world.
For those of us blessed with economic or financial resources, giving those resources as well as giving skill and time is part of the mix.
I was influenced early on because I personally benefitted from philanthropy. I received a place at a residential college at university which I couldn’t have afforded myself and I was very grateful for that.
In my mid-20s I worked for the Victorian Women’s Trust and was involved in a project called Women’s Enterprise Connection where I was a financial business adviser to women who were coming off benefits and wanted to start micro-enterprises. This was a collaborative exercise between the Victorian Government and the Victorian Women’s Trust and that was where my education about philanthropy began. I met a lot of very inspiring women who were philanthropists in their own right and they opened my eyes to what philanthropy was really about.
Opening the Gumnut account at Australian Communities Foundation was the start of my own structured giving as opposed to ad hoc giving. I received a very modest legacy when my mother passed away and that prompted me to set up the second sub-fund. I felt I’d received another gift and felt obliged to do something with it.
Then, in my work at Pitcher Partners, I established the Pitcher Partners Charitable Fund and I’m chair of the Charitable Committee which covers the sub-fund which supports scholarships for young people who want to study accounting. I also do a lot of pro bono and low bono work and we have an active CSR program. Last year we gave $1.2 million to the community.
Our commitment is to provide $1 for every hour worked within this firm. That means that for every hour someone at Pitcher Partners works, regardless of what role you perform in the organisation, we give a dollar back to the community.
As our firm grows we’ll keep growing our commitment and our contribution. It’s something I’m really pleased to have been able to bring into the workplace that touches 800 other people.
I’m a bit of an evangelist for philanthropy. I do my own efforts on a smaller scale but, as a taxpayer at the highest marginal rate and at this time, in my final years of work, I am accumulating my philanthropic nest egg for want of a better word because it makes financial sense to do that while I’m getting the biggest tax deduction.
That’s the beauty of the Australian Communities Foundation model – I don’t have to give it all away until I’m really ready to enjoy that part of it. You can enjoy the tax advantage now and know that you’re going to get the fulfillment from the granting side of it over the next decades.
I’m trained as an economist as well as a financial adviser and we economists love multiplier effects. If you can get something to lift two or three times its weight, that’s a big achievement and that’s what philanthropy can do.
What’s been the most valuable lesson you’ve learned about giving that you’d share with anyone who’s new to philanthropy?
The fact that anyone can do it! That’s what’s so wonderful about the Australian Communities Foundation model – it’s so accessible. Just start, you’ll get hooked!
My advice to advisers and donors is that philanthropy is a very personal thing, it’s quite an intimate expression of yourself. Treat it that way. Treat it as if it is a sacred thing and honour it. The conversations are very special and precious when you have them within your own family or with your adviser.
On a practical level, I see some people who say, ‘I’ll leave some money to charity when I die’. That’s been the conventional approach. But it is so much more beneficial to give with a warm hand rather than a cold one. I encourage people to give while they live for two reasons:
- The tax advantage which you don’t get if you give from your estate
- You get the enjoyment that comes from giving.
I don’t think donors these days are looking for the plaque or being on the honour board, what they’re looking for is impact. How the funds they’ve given are used in service of an organisation’s goals and that takes time. If it’s an artistic organisation you’re supporting, you want to see new works commissioned or new members of the community engaged. If you’re supporting science, you want to see discoveries made. If you leave those things to your Will, you’ll never see them.
Philanthropy gives you the opportunity to make your money work three times.
Philanthropy gives you the opportunity to make your money work three times.
First, if you give a dollar when you can, you get a big tax deduction so you can actually afford to give $2 and you’ll still have a dollar net, meaning you can afford to give more when alive.
Second, you can invest in an organisation that’s using the funds to do good not evil. If there’s an ESG strategy in place, while that money’s being invested it’s doing good. For instance, ACF’s recent decision to appoint Brightlight as its investment advisers is going to mean even more impact is available for ACF donors.
Third, is when you make your granting.
So, you get a multiplier effect happening. I’m trained as an economist as well as a financial adviser and we economists love multiplier effects. If you can get something to lift two or three times its weight, that’s a big achievement and that’s what philanthropy can do.
On Friday 15 April, the Community of Giving hub had the pleasure of hosting breakfast with Dr Jason Franklin, a prominent philanthropist and academic from the United States. With his experience and research in next-generation giving and innovation in philanthropy, Jason provided guests with a unique combination of personal and professional perspectives on wealth transfer in today’s giving climate.
With an estimated wealth transfer across generations of $2.4–3 billion between 2007 and 2061, Australia is seeing a significant shift in who is giving and their giving preferences. To be well-prepared for this, Jason emphasised how important it is to have early conversations with this next generation of funders and to aid in the education of young and emerging funders. Suggesting that there tends to be too much secrecy and not enough conversation around money and wealth, Jason encouraged guests to (where necessary) “ask the questions that aren’t polite”.
In terms of understanding the preferences of young and emerging funders, these may be linked to generational groups; reflective of a funder’s relationship to their assets; or connected to legal or financial needs, such as flexibility for giving or tax regulations.
Through his research (focused primarily on the US), Jason has identified three types of funders: inheritors, asset builders and high-net-worth (HNW) individuals. Each of these groups has a different relationship to their assets and therefore a different approach to their giving; something we’d all do well to remember.
Not all next gen funders are the same
Jason’s final advice to professional advisers was around building thoughtful relationships with the next generation. Before that wealth rolls over, it is crucial that advisers build trust with prospective clients and refrain from making assumptions about their giving preferences and their family relationships.
We’re very grateful to have had Jason visit us during his time in Australia, and we look forward to welcoming him back on his next trip down under!
“Australian Communities Foundation is perfect for getting started in philanthropy with a sub-fund,” says Chris Morcom, Director at Hewison Private Wealth.
“I think that’s particularly the case for those clients who are still building their wealth but also wanting to start their philanthropy journey at the same time.”
Part of Chris’ role as a Private Client Adviser is helping his clients articulate their longterm financial plans. “As part of that conversation, I always ask if they’re interested in philanthropy and if they currently give,” Chris says. “Our role is then to see if there’s a solution that might help them achieve their philanthropy goals in a more effective manner.”
For more than four years, Chris has been referring clients to Australian Communities Foundation, with great outcomes.
The Foundation has always shown a real interest in our clients and what it is they’re wanting to achieve. It’s very much been a personalised, flexible focus.
“The Foundation has a very good track record in terms of their grantmaking processes,” Chris says. “They also do donor engagement well, helping donors become more knowledgeable about philanthropy and giving.”
“The Foundation has always shown a real interest in our clients and what it is they’re wanting to achieve. It’s very much been a personalised, flexible focus.”
“From my own perspective, I’ve gained a lot of knowledge from the conversations I’ve had with the Foundation,” Chris says. “Philanthropy can be complicated, and I am absolutely in awe of what gets done at organisations like Australian Communities Foundation.”
Forbes James, Director of The Wealth Mentoring Group, has been recommending ACF to his clients since 2012. He’s also a member of the ACF community himself, having set up his own sub-fund.
“I’d always had a personal interest in philanthropy,” Forbes explains. “The topic had come up with a number of clients, especially if they were selling businesses or assets or making large capital gains, and I’d been able to put the question of giving on the agenda to see if it was important to them.”
“Initially, I thought there were only two alternatives: either give to registered charities on an ad hoc basis or set up a philanthropic vehicle on your own. When I found out there was a midpoint available at ACF, where people could direct their philanthropy without having to manage the administrative burden, I thought I’d try a sub-fund myself. I found that it worked well.”
ACF is a great model for people who want to go beyond just writing cheques but don’t want to have all the pain of running their own fund.
Forbes says that being able to share his own first-hand experience has been a valuable tool when helping his clients evaluate their giving options. “It’s been a big advantage in being able to credentialise it,” he says. “I can show clients our account statements and take them through the process.”
“What tends to resonate with people is the fact that they can tailor their fund to their own interests. We had one client who’d made their gains from agriculture and farming and they were able to work with ACF to target a scholarship for younger people going into agricultural careers.”
“ACF is a great model for people who want to go beyond just writing cheques but don’t want to have all the pain of running their own fund. I see it as a very flexible solution for anyone in that situation.”