Peter Winneke, generosity & legacy advisor, advocate for greater philanthropic giving and author.

This conversation is with Peter Winneke. Peter is widely regarded as one of Australia's leading voices in philanthropy and strategic giving. He has played a pivotal role in shaping modern philanthropy in Australia.  Peter is a trusted advisor to many of Australia's wealthiest private families; he has helped design and establish more than 100 family foundations and was the architect behind the philanthropic services team at the Myer Family Company. And if that's not enough, he is also the author of Give While You Live, a practical guide for both individuals and families to think more deeply and act more urgently about their giving.

Transcript

SPEAKER_01 0:02

Welcome to How Hard Can It Be. I'm Frankie Eric, I'm Marisa Mandil, and together we are Philanthropy Squid Academy. This conversation is with Peter Winneke. Peter is widely regarded as one of Australia's leading voices in philanthropy and strategic giving. He has played a pivotal role in shaping modern philanthropy in Australia. Peter has helped design and establish more than 100 family foundations and was the architect behind the philanthropic services team at the Maya Family Company. And if that's not enough, he is also the author of Give While You Live, a practical guide for both individuals and families to think more deeply and act more urgently about their giving. We loved our conversation with Peter. He allowed us to explore what it feels like to be on the other side of the table, that is, to give money away. Peter generously shares his insights and experiences along with a few of his boat bears, delivered with clarity, conviction, and with his delicious trademark charm. Welcome, Peter. Peter, to paraphrase Aristotle, giving money away is easy, but deciding whom to give it to and what for is a little more difficult. You've spent many years trying to encourage the wealthy to give their money away. What do you think is still missing? What's lacking?

SPEAKER_00 1:33

I think I would question Aristotle's uh premise because giving in Australia doesn't seem to be easy. For some reason, it seems to be really difficult. Um we've not uh uh developed a strong culture of giving in in Australia and amongst high net worth families. Um and look, perhaps that's not surprising because we know that most of the wealth in this country has just been created in the last three to four decades. Um so perhaps it's not surprising, but um I uh yeah, I think in in um the years to come we need to build a much bigger and much better philanthropic sector.

SPEAKER_01 2:14

How do we do that?

SPEAKER_02 2:15

How do we create that culture?

SPEAKER_00 2:17

Is it just time that's not happened, or is there is that what what's the sort of mature issue Yeah, well a little bit of it's time, Frankie, but I I think it's we we can't sort of rely on, we can't just sort of rest on that. A number of leaders in the philanthropic sector keep calling for structural change. Um we've had some terrific structural changes in the philanthropic sector in the last two decades. So we need cultural change. Um the most of the wealth is new. We we haven't we we need to develop a culture of sharing some of that. And you know, we're all animals. We're we're really influenced by our peers. So we need more um leaders, high net worth families to stand up and commit to giving away uh material sums of money so it can inspire uh their their peers, their colleagues, um to do the same. Um it's it's I think it's pretty simple. It's cultural change that we need.

SPEAKER_02 3:12

On the fundraising side, when I first arrived in Australia, my first job was at the Art Centre in Melbourne. And uh Dick Pratt was chair. And so he was kind of spearheading and pushing. They'd done some fundraising, but they hadn't done it in a structured way or uh and he wanted to kick it up to scale. And everybody told me, not not Dick Pratt, it has to be said, but everybody else told me that in Australia we give quietly, and you know, I think in England, and in England they try and give quietly as well. So everybody gives quietly in Australia, and you know, nobody everybody wants to do it anonymously and whatever. And then I sat in the state theatre next to donors who were pouring through the lists of who else had given and who gave at what level, and that set the new benchmark. Yeah, and so that culture does drive from you know the classic early adopters and then others follow, and then it became normal. And something hasn't quite taken on that in this country yet. And I don't know whether it's well, you know, our premise would be that it's the fundraising is part of the problem as well.

SPEAKER_00 4:08

Yeah, let's let's come back to that fundraising in in a second. But I, you know, I if I hear that uh we give quietly a bit another time, I think I'll scream. In my experience, that usually means they might be giving, but it's not much. And you know, I would say the uh the private ancillary funds in Australia, we know that there's there's very little transparency there. I'd say let's pull the curtain back. Yeah, why why should they be the only shadow institution in the country that um can withhold their information, their annual accounts, etc., from the the uh ACNC's public portal. Let's let's let's remove that ability to do that so we can see them, then we can see how big these foundations are. And a number of them are quite small. I mean, I know, I set them up. And I so I think that once the curtains pull back on these PAFs, we'll see families who with significant wealth and with a very modest PAF size. Um, some of them will close their PAF and distribute the one or two million dollars in them. I would say, well, that's terrific. The money's getting straight out to the community where it should be. Others, there'll with others there'll be there'll be community expectation that, mmm, gee, we're about to lose our uh our privacy and we've only got two million in the path, if the rich list says we're worth 600 million, uh I think more sums of money will go into the foundation just through community expectation. Um and again, just coming back to that cultural change. You know, if we had uh 25 influential, high net worth families in every state in Australia publicly committing to giving away something like minimum of 20% of their wealth in their lifetime or upon their death, and they're influential families, that that sets a bit of a benchmark. Uh, you know, you could you could say should it be 15%, 10%, 20%, I think it should be a minimum of 20%, but that sets a benchmark so that when when one sells their business for 100 million, there's a bit of a benchmark. And there's a whole stack of, you know, there's m there's maybe 75 to 100 plus influential families around Australia who are publicly committed to giving away material sum of their wealth. Now I I think that will have signific could have significant change on our giving culture.

SPEAKER_01 6:30

Is it understood exactly what philanthropy does or what it should do? I mean, is that part of the cultural change that's needed?

SPEAKER_00 6:37

Yeah, I think it is, Marissa, because uh it's a clumsy word. And you know, I think for many people the word philanthropy conjures up an image of an old white man maybe sprinkling some money around. I rarely use the word. Um you know, the peak body philanthropy Australia should first thing they should do is change their name to something like Giving Australia. Um and and we know that you know the the word philanthropy derives from a Greek word meaning love of mankind. So we know that that includes volunteering. And um, I don't think we're here to talk about volunteering today, but we know that our volunteering levels in Australia are pretty good. They're they're declining, but you know, I think we're really here talking about primarily high net worth families and their financial giving levels. So yeah, I'd I'd that let's get rid of the word.

SPEAKER_01 7:23

I'd challenge you, Peter. It's not just about high net worth individuals, correct? I mean philanthropy is about mindful giving. Yeah.

SPEAKER_00 7:31

You spot on Marissa, I I often talk about high net worth families because that's the space that I've operated in for a couple of decades. I guess putting it crudely, that's where the big bucks are. So that's where I thought let's try and create the change there because that that that will bring in billions of dollars into the community sector. And I also think if you focus on there in that space, it'll s it'll uh filter down to you know mums and dads who have got surplus wealth. And and to your point, Marissa, uh, I mean, we only have two uh I mean private ancillary funds are for high net worth families because you need half a million dollars plus to set one up. But something like a sub fund, I mean, you can set them up for ten thousand dollars, yet we only have about three and a half thousand of those in the country. I mean, we should that that's your point there. With the mums and dads with some surplus wealth, you know, we should have a hundred thousand plus subfunds. We've got about three, three and a half thousand. I mean, you know, it should be on the front page of the press. It's it's an outrage, but it um uh uh it's not, it should be.

SPEAKER_02 8:36

In 30 years I've been in this business, and when I started out in the fundraising, it was in, you know, Thatcher was in power and was starting to, you know, pull back from funding things that used to be funded by government, starting to pull back from the welfare state. But I think it took a decade or more before people realized that things that used to get done by tax are not getting done anymore.

SPEAKER_00 8:56

Yes.

SPEAKER_02 8:57

The pendulum then kind of swung into, okay, well, if they're not getting done by government, we need better make sure they get done.

SPEAKER_00 9:03

Yeah.

SPEAKER_02 9:03

But what we haven't done is swing into, I am one of those people that would do it.

SPEAKER_00 9:07

That's right.

SPEAKER_02 9:08

And we sit in a state where we expect the government to do a lot.

SPEAKER_00 9:11

We do. And and um, yeah, in the States when they move from the East to the Wild West and they realize they need to build a city hall, they they sort of have a disdain for governments being in their life. So they they didn't run back to the East and say, Can you come out to the West and build a city hall? They just built it themselves. We come from the British model, of course, of traditionally higher taxes and higher safety net. That's part of the reason our generosity levels are not as high as they could be. But I I think part of the um the secret source here is you know, we've created this staggering wealth in recent decades. We we need to get families to high net worth families to think about well, how much is enough and how much do the kids need? They're the fundamental two questions, which which I rarely see being seriously considered within high net worth families. Um, and of course, these families are surrounded by conflicted advisors, lawyers, accountants, and uh wealth advisors, um, who who sort of brainwash these families almost. You've got you've got to grow your wealth for generations and generations. And for what purpose? I mean, I'm an optimist, but you know, with current way we're going at the moment, you know, perhaps there may not be much left in a hundred years' time. So, what's the point of building generations and generations of wealth? Um and that's that's without even touching on the question of you know, is it good to leave little Johnny and Mary 50 million each? You know, we let's do the next broadcast on that issue. That's madness. But that's what most families do.

SPEAKER_01 10:46

Well, on that matter, we've got this real transfer of wealth happening right now in real time.

SPEAKER_00 10:52

Yeah.

SPEAKER_01 10:52

Tell us your thinking there, Peter. What does the next or the new gen look like in terms of philanthropy and giving?

SPEAKER_00 10:58

Uh yeah, you know, there seem to be a number of reports of this in the next two decades. The it could be five trillion being passed uh to the next gen in Australia. Now, if we got just 10% of that, just 10%, that would be $500 billion into charitable trusts. They would distribute $25 billion a year to the community. Now, if that was done effectively, that would have a massive impact. And that's just 10%. So the next gen is is interesting. Um, we know it's dangerous to make generalizations about any generation because everyone's different. But I do see that the next gen, from what I'm from my experience, I think the next gen will be a little bit different. There they tend to be uh less interested in things that mum and dad were, such as the arts, and and more interested in issues such as the environment and climate has traditionally had a tiny percent of philanthropic funding around the world, and particularly in Australia. That that's definitely shifting with the next generation, which which is good. Um, so I think things like climate and democracy, they'll there all those sorts of issues will be more the next generation. Um, I've seen snippets of where the next gen is pushing mum and dad to see you created all this wealth, there's a lot of mess in the world. Why do we have such a small percentage of our wealth in the foundation? Let's do more. But as I said, I've seen snippets of that. I've not really seen enough of that yet to make to to draw conclusions that the next gen will be far more generous. That's I think that's a bit of a wait and see. That's gonna be really important. It's important that we we change the cultural giving now, because in my experience, if you inherit wealth, like significant wealth, you are far less likely to share that than if you made it yourself.

SPEAKER_01 12:41

Interesting. Yeah, that is interesting.

SPEAKER_00 12:42

Yeah, so we need to act now to really change the cultural giving in Australia because this wealth is all most of it's new.

SPEAKER_02 12:49

Our observation of of sort of next gen, obviously, mostly we see it through at what our clients are doing and how they're interacting with next gen. Um as you say, next gen are less interested in institutions um and more interested in movements and causes. Yes. They seem like very socially aware. Um and a lot of it's driven by climate, which has made them look at a whole pile of other things in our life that that is both cause and effect of climate. Then the other element of it is how do we make people care? How do we make them realise not that they have a responsibility with money, but actually that if they do this with it, they can really turn the dial on some of the things that actually matter to them.

SPEAKER_00 13:25

Yeah, and I think you I think they do have a responsibility. I mean, if you've created significant wealth in Australia, sure you're intelligent and you've worked hard, but you've had a massive amount of luck. If you know, if you've grown up in cities, well any any city in Australia, you haven't grown up in Gaza, you haven't grown up in Sudan, you've had a massive amount of luck, and you've grown and you've stood on the shoulders of many others. I mean, we're a democracy, so you you've probably had a good education. So you've had a huge amount of luck. So I think there is a responsibility to share that, and particularly if you've created significant wealth. I mean, how much is enough?

SPEAKER_01 14:01

I think this is where the storytelling's needed, even more so than why I give. It is. This is the gap for me, the communications gap.

SPEAKER_00 14:09

Yeah, and that's why the fundraising is so important. And um, and I'm not a fundraising expert, but the the fundraising gurus, I mean, such as you two, but I've heard for over the years that fundraising needs to uh improve dramatically because it's a storytelling. And and you know, the philanthropic sector, I mean, a family foundation can be an incredible educational tool for the next generation. I I often talked about that to high network families, and they've never considered that because no one's put it in front of them. We we must that the philanthropic sector must tell that story much better. You've got to have one of these. If you've got wealth and you've got kids andor grandchildren or even nephews and nieces, get them engaged. Incredible teachable moments, incredibly satisfying to sit around a table as a collective unit and and and work with social entrepreneurs and have a crack of issues in our community. Um, we need to sell that much better.

SPEAKER_01 15:00

What are foundations looking for in terms of nonprofits demonstrating impact from your perspective?

SPEAKER_00 15:07

Yeah. Um is why I try and be diplomatic, but um Oh, don't be diplomatic.

SPEAKER_02 15:14

Yeah, no, yeah.

SPEAKER_00 15:15

I'm just throwing that, I've just taken that hat off.

SPEAKER_01 15:17

Um That was quick.

SPEAKER_00 15:21

It wasn't glued on. I mean, I would argue that most found most in my experience, most foundations in Australia don't have the skills around the table the board table to target their mission, and they don't have the discipline to target their mission. So if you don't have the skills and the discipline, that leaves a lot of problems. So philanthropic foundations don't have the the right skills around their board table to tackle their mission, um, nor the discipline. I mean, these I've worked with a lot of high self-made high net worth families, incredibly disciplined, smart people who are able to build a business and sell it for significant sums of money, and then they come into their philanthropy boardroom and the those that discipline um and those skills are left at the left at the uh left at the front door. And that's that's usually because the family wealth bucket, you know, just news around numbers 100 million. If that's the case, the foundation um balance sheet is probably two or three million, if that. So it's the big bucket that gets all the attention, all the all the skills and the decimal, and the little bucket is, oh, this is nice, it's just sprinkle some money around. I've seen that so many times, incredibly frustrating. So, firstly, we need to get families to think about their legacy and how much is enough. So they put a larger sum into their foundation and they realise it's not good to leave significant income streams to little Johnny and Mary, put larger amounts, material amounts into their foundation, that will bring then the focus on okay, what are the skills and the disciplines uh that we need to target our mission? And and hopefully that's leads all to a discussion around best practice giving, which is just pick two focus areas and work out who's doing the best work in that space and back them long term with unrestricted funding. And it's all common sense. It's very uncommon in the philanthropic sector.

SPEAKER_01 17:10

Why unrestricted funding, in your view?

SPEAKER_00 17:14

Yeah, Peter.

SPEAKER_01 17:15

But looking from the non-profit perspective that's trying to secure funds from a family foundation, yeah. What do they need to do to demonstrate impact and create that sense of awareness?

SPEAKER_00 17:27

Yeah, yeah, yeah.

SPEAKER_01 17:27

So families can choose wisely.

SPEAKER_00 17:29

Most philanthropic grants in Australia are for a project for one to two years. And that's ridiculous. So these practices are unchanged for decades. The sector is there's a lot of talk about, you know, give what it takes, um, but it's just common sense. Let's just do it, let's stop talking about it. Uh, we know that most charities in Australia are undercapitalized, um, and particularly the smaller ones, the CEO, he or she spends half their time fundraising instead of targeting the mission of the foundation. They need certainty in their budgets going out two or three, five years so they can get on with their mission. So work out who's, you know, if if if a charity is uh is within one of your focus areas, sit down and work out what is what are they trying to achieve? What does success look like? How do they measure their impact? And what are the milestones along the way? So they they're the sorts of things that donors should be asking and that charities should be prepared to answer.

SPEAKER_02 18:27

I find that the not-for-profit boards, like the boards on of the not-for-profit organization, they they straddle. We want them to straddle. They come in from business. We want them, you know, we want them with the business acumen. But like the family family foundations, they leave all of their business acumen behind and they turn and they go, Well, if it's a legal problem, you know, you get a lawyer, if it's a financial problem, you get an accountant, and if it's a fundraising problem, we all have an opinion. Because how hard can it be? Hence the they really do uh sort of come in with the approach of, well, you know, it's transactional, just go sales, just do this. And they don't drive the organization to talk about impact, to take time to listen to what foundations are telling them, to take time to have a conversation. And if it doesn't happen at board level with your family foundations, it's very hard for the CEO to do it and it's impossible for the fundraiser. But it needs to be driven um by the leadership, executive or non-executive, and the directors is that is is let's actually look at this and start talking about what are we measuring and board them to, you know, just measure the PL. So money in, money out.

SPEAKER_00 19:29

Yeah, well, that's right. Yeah, and and yeah, I mean, I've talked to charity COs for years, and some of them have got great boards. Most of them don't seem to have great boards. That's part of the problem. People joining sometimes because they're told to, or they just think it's the right thing to do, or they think it's gonna look really good on LinkedIn. They need to be uh this is a serious, uh this is a serious obligation. Um, and that's what they need to be doing their due diligence before they join to see uh to ask all those questions. Or where do you fit in the system? How do you measure impact? And okay, I see it, so I'm gonna join, and uh, and they should be helping with all of those. I mean, everyone around a board table's got different skills, but of course they should all be fundraising. They all have networks, whether they have amazing networks or ordinary networks, they've all got a network we've all got a network. We all went to school and people, and a lot of us went to university. Some of us played in sporting clubs or or were in rock bands or whatever. We've all got a um a network. So you've got to work those networks.

SPEAKER_02 20:28

I had a conversation again uh some time ago, but it the it it stayed with me as a significant part of my learning and observation about how to engage with boards and how to talk to boards and how to be on a board, I suppose. This guy was um involved with SVA back in the early days. We were talking about boards and uh this issue and boards driving short-term returns from the fundraising rather than saying let's actually measure long-term growth and how you know philanthropy evolves over time as the donors get to know your organization better and they get to trust better.

SPEAKER_00 21:00

Yeah.

SPEAKER_02 21:00

And he said that one of the problems is that in the in the commercial sector, shareholder relations, board shareholder relations is short-term. It's how you're going to get your returns uh next quarter. Whereas whereas actually we should be looking at sure, we should be looking at what are the returns are. But what's the returns on philanthropic investment? Take time, then long-term levers of change. We're short-term thinkers, don't we?

SPEAKER_00 21:23

Yeah, that that that's exactly right. That's how our community works at the moment. It's all um what happened in the last quarter. I mean, that's this um you know, I I've thought for years. How do we stop short-term incentive schemes in the world? Because that's they don't always you know, often they're they're poorly constructed. So people we're animals again, we get we're we're obsessed with money. I'm gonna go where my short term incentive scheme says, and that's possibly not where they should be heading. It's the lot as you said, Frankie, it's the long term game. And and if you're if you take Targeting issues in the community. If they were easy, they would have been fixed decades ago. So they're they're big hairy problems. None of that's going to be uh sorted out in the short term. And so why are most philanthropic grants in Australia for a project for one to two years? I mean it's it's it's madness. But it we we need to move on from that and be smarter.

SPEAKER_02 22:21

I'm cautiously optimistic, but I have to say, you know, after 30 odd years in the business, the the dial hasn't shifted as much as I would have liked. Yeah. But you know, the reflections on all of that are we're not telling a story. The single biggest catalyst to um to increasing philanthropy is good fundraising. And good fundraising doesn't mean hire a good salesman. It actually means let the whole organization start telling the story of impact. Where's the need? And there's a lot of talk around theory of change. There's a lot of consultants in the not-for-profit sector now. You know, we're all high priests coming in with our own little ways of doing things. But I think you know, theory of change is important, but actually storytelling and take time. It doesn't matter how professionally or unprofessionally, hopefully not unprofessional, but if you're willing as an organization and your board allows you to take the time to have a look and have a measured conversation and measured storytelling about what the problem as you is as you see it and how you think this is a solution. Because if people don't see the same problem, they're not going to understand that you have the solution. And if all you're doing is pitching solution, they might not see that as a problem. Right. It's time. And I the time to take to build relationships. We're all in such a hurry. We live in a short-term world, we've got a three-year electoral cycle, we live in a market economy, which is dah blah. But the thing that gives meaning to life is dialogue, conversations, and time to get to know people and relationships.

SPEAKER_01 23:46

Frankie and I often discuss this idea that fundraisers or boards think that fundraisers should go and scroll a rich list and uh make an approach, and that's going to work.

SPEAKER_00 24:00

Yeah.

SPEAKER_01 24:00

What's your thinking on the rich list and that approach?

SPEAKER_00 24:04

Yeah, well, that's I personally I think it's fascinating that we why do we lord the rich list in Australia as opposed to the top 50 givers list? I'd like to see an extra column on the right hand side of a rich list that says percentage of wealth given away. Because again, in terms of competitive philanthropy, I think that would have an impact when um well, it's not going to have an impact with the person who's number the the female who's number one, she's not gonna, she's not gonna give a stuff, but she's gone, you know, point gives away 0.1% of her wealth. But plenty of others on the list will be embarrassed by that you know they're they're ranked number 10, say, and they're in terms of percentage of wealth given away, you know, they're they're ranked last. I think they will have an impact. Um and of course it's it's also it's it's it's difficult to target the rich list because unl unless you've got a connection, because they're they're on the list. They tend to be most of them, not all of them, but most of them tend to be private. Most of them don't have a large foundation, so that's your biggest problem. You can you can target them, but they don't have a they don't have a uh very few of that top 200. I mean I sort of to make the top 200 rich list, you need about 750 million now. So, you know, we should have uh there are 200 families on that list. Where are the 200 PAFs with a hundred million bucks? Or in some cases, a billion dollars? I mean, we've only got you can count on about three or four fingers the number of billion dollar foundations in Australia. We've got 170 millionaires, and I think half of those have got two billion plus. So where are the hundred one billion dollar foundations?

SPEAKER_02 25:40

This has been great, yeah. Really appreciate the time and the candor. Thank you, Peter.

SPEAKER_01 25:48

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