On Philanthropy, especially in Australia

Geraldine Doogue’s ‘Compass’ program on the ABC often finds me as a viewer. It is about religions (one day I’ll suggest that she does one on ‘climate change’!), and since I am not religious in any way, I appreciate its perspectives on that important aspect of life, which are always well done.

A recent program was about philanthropy in Australia, and centred on a number of wealthy men who were putting a good deal of money, energy and time into worthwhile causes. Why wasn’t everybody doing this who was wealthy? After a certain point, after all, you simply have much more money than you can spend in order to live. One of them more or less asked that question. He was going to put to some of his rich mates that they do the same as him. Why didn’t we have a culture of philanthropy like the one in the United States? And so on.

It was at that moment I wanted to call out that there was a straightforward reason. Not only is Australia not like the US, but no country of which I am aware has a philanthropic culture like the US — and there’s a good reason. The wealth of the US’s richest people has come in three great spells. The first was in the opening up of the American continent in the 19th century, while the second came in the first third of the 20th century, and the third in that century’s second half.

The 19th century produce great fortunes in railways, banking, iron and steel, insurance and food production. The next phase was about oil, printing, motor vehicles, movies and retail. The most recent is from technology of all kinds, especially in communications. The earliest philanthropists on a large scale in the US had made their money in banking, like Morgan, or steel, like Carnegie, or oil, like Rockefeller, and they established the giving culture.

Their riches lived mostly in stocks and shares, and were easy to give away. It’s worth noting also that the USA now has a population of around 350 million. One cent from everybody is worth $3.5 million. To do something at the national level in the USA, and be rewarded for it, produces great wealth. Even crowd-sourcing, as President Obama learned, could produce millions of dollars for an election campaign in a country so large and so rich.

Australia’s great wealth in the 19th century came from primary production and gold. Colonial governments built the railways, from imported steel. The banking system was heavily dependent on foreign capital (as indeed was that of the US in the 19th century, at the beginning). Much of the gold wealth went into land, and the really successful finders either frittered it away or sent it overseas, like William Stanford, an American who endowed the library of the university his brother set up in Palo Alto California. No philanthropic culture developed here to any great extent, for good reason.

Because so much of our wealth was in land, inheritance patterns meant that the property was not carved up for the children, but handed on to one of them, usually the eldest son. The successful graziers, like the Falkiners, Dangars, Whites and so on invested their earnings in improved production. In short, we had no philanthropic culture of the kind that flourished in the USA, nor could we have had, given the emptiness of the Australian interior, and the way it was developed.

Commercial and industrial wealth did appear in Victoria in the 19th century, but because the colony kept taxes low in order to encourage more industrial development, the governments had little money for hospitals and secondary schools, both of which came quickly to depend on philanthropy. In NSW, on the other hand, taxes were high, and public spending followed suit. Victoria developed a philanthropic culture to a degree; NSW didn’t.

Australia grew up in a different way, and our culture is accordingly different. We have a large voluntary sector, which is certainly a form of philanthropy, where people who aren’t at all rich give time and energy, and some money, to worthwhile causes. Our voluntary sector is the most notable in the world, so far as I can determine, with two interesting exceptions: we are not notable for joining political parties or for going to church.

We now do have some really rich people, and some of them have come to do the view that they could use some of their wealth to support worthwhile causes. I’m all in favour of that. But in a sense Australia is 150 years behind the USA in developing a culture of philanthropy among its very wealthy. Today’s wealthy Australians have made their money in mining and technology — or, more broadly, the new wealth is not tied to the land, and can be given away without imperilling the next generation.

How Australia ‘works’ as a society is an interesting study. As I’ve said before, our voluntary sector is very large. Some people would like it replaced by the kind of cradle-to-grave system that is best known in Sweden. It would certainly be more complete then, but I think we would then miss some of the spirit our our country. You don’t have to be rich to help others in our country, and extraordinarily large numbers of Australians do that every day. It’s something I value.

 

Join the discussion 5 Comments

  • Jim Belshaw says:

    I wonder a little about this analysis, especially as it applies at the micro level. Think of Armidale and the broader New England. I just don’t think that its true that we had no philanthropic culture. In art, think of Hinton and Coventry. In education, think of the private schools and UNE. In politics, think of the New England New State Movement. On the pastoral side, T R Forser, the Whites, the Wrights, made relatively very big donations.

    At one stage you made the point, I think, that one difference in the North was that that at least some of the elites thought locally or regionally.

    Attitudes and wealth were both affected by the social changes that took place in the 1950s. In UNE’s case, it ceased to see itself in regional terms and indeed alumni terms. and lost contact with its base. At the same time, that base had less money because of the changes.Then, too, there was a decline (I think) in personal responsibility, combined with scale changes that made it harder for individuals to make a difference.

    Still, the Sydney Theater Company has just spent a week in Armidale. They did so because a TAS old boy actually underwrote the appeal for a multi-million dollar appeal for a performing arts centre. One of the things that I am interested in as an historian is the chain effect. The head of the performing Arts Centre is Emma Buzo, Alex’s daughter. And his dad came to Armidale because of the Oaky Hydro Scheme, but then stayed because he got sucked in to the New England ethos.

    And so it goes on.

    The new state movement still exists, by the way, if in low key way..Remember what you wrote in your work on the NSW Country Party, about the time it takes to create new organisations? The New State Movement Facebook group (link https://www.facebook.com/groups/106438812712957/) is still small, 143 members, but they are nearly young, certainly younger than this wrinkly. Do you know, after 150 years, we are the oldest surviving Australia political movement!

    • Don Aitkin says:

      Jim,

      I don’t disagree with your view that there is a philanthropic culture, and that one can see it at the local level. Indeed, it is part of the voluntarism that I think is one of the characteristics of our society. And you can see it also in the we donate to SIDS and other worthwhile causes, especially the medical ones.

      My point was that until the present era the wealthy in Australia did not on the whole derive their wealth from industry, mining and money, but from the land, and that had effects on the development of the kind of philanthropic culture that you can see in the US.

  • Jim Belshaw says:

    I understood that specific point, Don, and that was part of my muse. In giving my local example, I wondered if the broader point were true, although I haven’t seen a study across the broader primary sector.

    The scale of wealth in the US in that earlier period dwarfed Australia. We have no Carnegie equivalent measured in absolute terms. Actually, Carnegie was unusual in his own right full stop. Relative to the then size of the Australian economy, the donations of a small number of people in the UNE case were very high. To give you a scale example, if I interpret the figures correctly, in 1936 the University of Sydney received 65,638 pounds from the State Government.So when T R Forster gave Bool plus land and later cash as well, that was a very large bequest indeed relative to the time. When grazier Charles Mott donated 1,800 pounds to to the appeal at a critical stage, it was a big donation measured by Sydney Uni funding.

    To use a non-agricultural example, when Armidale builder G F Nott guaranteed 1000 pounds at a critical stage of the College appeal, that was a a very big sum. It included a contribution in kind of 100,000 bricks that were delivered. On today’s Sydney brick prices, those bricks would be worth depending on the bricks between $500,000 and $1.4 million. That wasn’t Nott’s only local contribution. The tower of the Anglican Cathedral is another contribution. This is philanthropy on a considerable scale measured by relative scale.

    I could go on by taking PA or Mary White. I won’t, because you know this stuff. As a regional historian, I am interested in the question of why some families gave, some did not, why some centers or areas had a philanthropic tradition, others did not. Mind you, there is a problem in the word philanthropy itself. It implies, I think, a contribution for the general good, whereas most of these contributions are actually very targeted. So we have two questions, why people give, why do they give where they give.

    As a broader historian and social analyst, I am interested in patterns. I do think that there has been a decline in philanthropy since the 1960s. What is not clear to me is that the US has actually had a greater history of philanthropy when measured not in absolutes but in relative terms. .

    .

    • Don Aitkin says:

      Jim,

      I agree with your local examples, and no doubt every country town could point to equivalents, if perhaps not on quite such a scale. Lots of churches were built in the 19th century on the basis of a really large grant for a local notable.

      I said that we had a strong voluntary culture, and we do give generously when there are enormous disasters, like the tsunami. What we lacked, and may now be generating, is a culture of giving on the part of people who have very large amounts of wealth indeed. But I think you and I agree about this too.

  • davids99us says:

    Good thought provoking post – as usual! My response was to wonder, to what degree is the US wealth CAUSED by philanthropy? And so, becomes a virtuous cycle. The opposite of philanthropy – schroogeiness – is not going to produce collective wealth. To what extent does the voluntary distribution of the fruits of good stewardship produce abundance?

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