By Trevor Gray, Manager, The Tindall Foundation
During my 12 years working for The Tindall Foundation, I have been constantly intrigued by the role and place of private family philanthropy – where it fits into the overall ‘philanthropic’ landscape, and what its best role might be – especially with regard to support for systems-change innovation. Revisiting an article Jenny Gill and I co-wrote for a book on Global Philanthropy, I muse below on this big-picture conundrum which has much relevance to my work and our Foundation. I continue to fail to come up with any definitive answers, but do draw attention to some interesting history and unique factors that affect family foundations and philanthropic support for innovative initiatives in our country.
Our Unique, Unusual and Blessed ‘Philanthropy’ Sector
Aotearoa New Zealand, with a population of just over four million people, has a unique, unusual and substantial philanthropic profile. The sector has a small but strategic group of family foundations with a history of supporting social innovation; and a significant group of community and energy trusts established two decades ago from the sale of state owned energy assets and trustee savings banks that were established by Scottish settlers over 160 years ago. In total and per capita, we are much blessed with ‘philanthropic’ resources.
Unlike many other countries, New Zealand’s early history was not conducive to the growth of private philanthropy. Colonial New Zealand did not experience industrial or resources booms which created a consequent wealthy elite, who in turn created personal foundations. The establishment of the welfare state in New Zealand early in the twentieth century meant, therefore, that the provision of health, education and welfare services were perceived by both the government and the public as a government responsibility right through the twentieth and into the twenty first century. Unlike the United States and other countries, this left little room or urgent need for private philanthropy to fill or respond to.
Family trusts and foundations not directly established by specific statute, are the earliest and most enduring form of philanthropy in New Zealand. A majority of family trusts were established prior to the 1950’s, many based on wealth acquired in the retail sector. The life stories of these early New Zealand philanthropists are classic “rags to riches” stories. Many experienced poverty and hardship in their early lives and they decided, later in life, to share their wealth with those they perceived as being “the less fortunate members of society”.
Our foundation – the Tindall Foundation – is one of the newest and most significant family foundations in New Zealand. We believe that our Foundation, as well as being very large by New Zealand standards, is proving to be one of the most innovative and pro-active in New Zealand at present with an estimated $10 million per annum set aside for both charitable and innovative programmes in the community.
Funding for Systems-change Innovations
Family foundations internationally are often charged with the obligation to focus on systems-change innovations as their primary role and place in the ‘philanthropic continuum’. This is no different in New Zealand.
But, because of the unique assemblage of ‘philanthropic’ players here, who becomes involved in supporting systems-change innovation and how it is implemented by funders most definitely is different. While similarities are more with the European than US philanthropic environment (previously strong social contract with government, history of egalitarianism, moderately active welfare state, some government-initiated innovation), the dominance of ‘distributive philanthropy’ of effectively publicly-owned funds compared to genuine private philanthropy distorts this picture in interesting and perhaps counter-innovative ways.
Despite the apparent abundance of overall ‘philanthropic’ funding available in New Zealand, especially in some better-endowed regions like Southland and Central Lakes, only a small percentage of funders appear to be, or are likely to be, engaged in significantly funding true systems-change innovative initiatives. Of those that have, the few family foundations like J R McKenzie Trust, Wayne Francis Trust and ourselves, (together representing just 0.00001% of the total annual giving), are most able and likely to be the main current funders of such projects.
This places great strain on a small pool of funding and limits the amount of innovation that is able to be supported outside of business and government sources, compared to other countries with larger and less risk averse sources of philanthropy. While some community trusts and other funders do support innovative programmes (the ASB Community Trust Māori and Pacific Education Initiative is one example), most of their funding by its nature is directed to more mainstream activities and projects.
Examples of Innovations Funded by Family Philanthropy
Thankfully, New Zealand’s few private family foundations do have a track record of supporting many projects at the innovative end of the funding spectrum. In particular, provision of early funding for an often passionate individual or group with a genuinely novel idea or way of dealing with a cause of disadvantage or inequity has often been the hallmark of this approach. Below are two examples of innovative initiatives which we have supported over the years,
New Zealand Housing Foundation (NZHF) Affordable Housing InitiativesAs with most developed countries, New Zealand has a group of people who fall just below the threshold of being able to own a home through mainstream means. These are not sub-prime borrowers, but rather those who currently and consistently pay weekly rent equivalent to what would be required to service a mortgage sufficient (or almost so) to purchase a home. Without some tweaking of the system, they are consigned to be permanent renters, which is not the preferred state for families in New Zealand. Home ownership enhances their ability to develop an asset base, reduces their transience and overall improves the life chances for themselves and their children. This is the group NZHF seeks to help become homeowners through innovative financing arrangements. Initial support for NZHF is primarily from our innovation donations pool.
The mix of shared equity, shared ownership, rent-to-buy, social housing and capital-gain-as-deposit have been successfully piloted over the last five years. Despite the recent dramatic changes in the housing market, these instruments have stood the test of time in both rising and falling markets. NZHF are now working on a major scale-up of three affordable housing packages with both donations and programme-related social loans from the Tindall Foundation, as a platform to attract local and central government partners, and private and institutional investors.
Zero Waste MovementUp until 10 years ago, New Zealand treated its waste pretty much as many other countries did – collecting it all in trucks, putting it in a hole, covering it up and forgetting about it. Recycling and the infrastructure to support it hardly existed and landfills were prolific, largely uncontrolled and adjacent to sensitive areas like coastal edges, estuaries and watercourses. Changes in environmental legislation brought strict new rules which tightly controlled the establishment and management of landfills. This forced concentration to fewer and larger facilities, and dramatically increased the costs and time required to open new sites. With waste volumes ballooning, any way of avoiding waste disposal to landfill represented a major potential saving by extending the life of existing facilities.
The Zero Waste To Landfill concept was introduced into this environment by our Foundation from Australia as a motivational visionary target for local bodies to aspire to by 2020. We set up of the Zero Waste Trust with grants of $20,000 for each local body which signed up to the target, along with significant support for community group and industry recycling bodies, training and public education, consultancy and technical assistance.
Over the following 3-5 years, close to 90% of New Zealand local bodies had signed up to Zero Waste targets, even though only the first 30 received a grant for doing so. While some are not yet on track to reach their targets, most have made average to above average reductions in the previous levels of waste to landfill, with at least one community to date achieving 85% of their total waste diverted from landfill.
There has definitely been a major systems-change attitudinal shift to dealing with waste across New Zealand, with recycling now a very established, expected and well-supported practice.
The effects of New Zealand’s unusual philanthropic ‘matrix’ on the nature of what is supported have not yet been researched in detail or quantified as far as I am aware. However, it appears that in relation to the funding of innovation – especially systems-change innovation – the predominance of more limited and risk-averse project-based distributive funders may have a dampening effect on the proportion of such initiatives that exist compared to other countries like the US and Canada.
This does not mean that New Zealand struggles to fund systems-change innovations per se. Government has always been active in this field and a range of publicly-funded social, scientific, agricultural and academic institutions drive innovation that the country is well known for.
I suggest that the additional role and resourcing that could be expected to be available through private family philanthropy falls on far fewer shoulders, simply because there are far fewer and smaller private philanthropic organisations in the mix.
So it looks to me like one vital role and place for family foundations is importantly (but not exclusively) to support innovation in all its forms, in ways that others cannot. This has certainly been a hallmark of what we do, and hopefully will continue to be so in the future.