Philanthropy Article

7
Judy Friedlander looks at the new ‘spiral’ career and how more corporates are committing to socially meaningful work Dealers’ Group is a membership and knowledge network offering content, community and collaboration for private client and family wealth advisers. For more info visit www.dealersgroup.com.au The 3 Pillars Netwok is an independent membership and knowledge network for sustainability in Australia, aspiring to set the agenda for sustainability issues including food security, climate adaptation and resilience, behavioural change for sustainability and social impact investment and measurement. For more info visit www.3pillarsnetwork.com.au CAREER MOVES IN PHILANTHROPY Special Briefing Commissioned by:

Transcript of Philanthropy Article

Page 1: Philanthropy Article

Judy Friedlander looks at the new ‘spiral’ career and how more corporates are committing to

socially meaningful work

Dealers’ Group is a membership and knowledge network offering content, community and collaboration for private client and family wealth advisers. For more info visit www.dealersgroup.com.au

The 3 Pillars Netwok is an independent membership and knowledge network for sustainability in Australia, aspiring to set the agenda for sustainability issues including food security, climate adaptation and resilience, behavioural change for sustainability and social impact investment and measurement. For more info visit www.3pillarsnetwork.com.au

Career Moves inPhilanthroPy

Special Briefing Commissioned by:

Page 2: Philanthropy Article

career moves in philanthropy 2

When I grow up, I want to be a philanthropist.” His mother replied, “Why Johny, that’s wonderful.” “Yeah,” Johny responded, “they all seem to have a lot of money.”

“We exist temporarily through what we take, but we live forever through what we give.”

– anon

Page 3: Philanthropy Article

career moves in philanthropy 3

The naming of investment banker, philanthropic powerhouse and record-breaking yachtsman Simon McKeon as Australian of the Year 2011 zeroes in on the zeitgeist of high-level engaged philanthropy that is manifesting itself around the country.

The recent high-profile transfers of corporate bosses into not-for-profits, a sector which represents 8.6 pc of Australians in employment and contributes $34 billion, or 3.4 per cent, to GDP is a definite trend noted by media, recruitment specialists and the big end of town.

“We see philanthropists become more engaged with what’s happening and really expecting a greater deal of transparency,” says Andrew Thomas, head of Perpetual’s Phil-anthropic Services. “It’s not just about their cheques – it’s about their contacts, their i nfluence and networks to provide a greater outcome.”

Says Michael Traill, chief executive of independent non-profit organisation Social Ventures Australia (SVA): “We are getting a lot of people wanting to have the conversation about moving to not-for-profits. More people are finding ways to engage in this sector – not just by leaving their corporate positions, but also by working within their organisations.

“There is not a lot of hard data on this but observations and conversations seem to back up this trend.”

Traill joined SVA as founding CEO in 2002 after 15 years as a co-founder and Executive Director of Macquarie Group’s private equity arm, Macquarie Direct Investment.

He believes there is movement at both ends of the not-for-profit sector: “More young people are using their skills in the sector and at the other end, there are those who have done well financially who are looking at different ways to give.”

He cites Andrew “Twiggy” Forrest as a high-profile example of very successful business-people who are plowing their energies into the not-for-profit world.

Forrest announced this year that he would be handing over the reins of his Fortescue Metals Group to focus on his philanthropic endeavours, aiming to bridge the gap between indigenous and non-indigenous Australians.

Profiler Recruitment Director Lynne Payne, who introduced NAB’s Glenn King to Save the Children Australia, said the news that King had decided to leave his high profile job as Head of NAB’s Small Business Division to “give back to the community” by working in the not-for-profit sector was significant.

“And, only two months ago, Caltex Senior Executive Helen Conway attracted news head-lines when she resigned as Company Secretary and took a reportedly massive pay cut to be the Director of the Equal Opportunity for Women in the Workplace Agency (EOWA),” says Payne.

These leaders can’t be precious because there won’t be the best coffee machine in the kitchen, but they have the opportunity to lead and drive significant change for results for which many others are handed a significant pay packet.”

Page 4: Philanthropy Article

career moves in philanthropy 4

Payne, who works with Senior Executives to build their careers across both corporate and the not-for-profit sectors, said more business leaders were contacting her for help to land senior jobs with not-for-profits (NFPs). “They have to do it for the right reasons,” she said. “These leaders need to be culturally aligned with the organisation and willing to roll their sleeves up. They can’t be precious because there won’t be the best coffee machine in the kitchen, but they have the opportunity to lead and drive significant change for results for which many others are handed a significant pay packet.”

Says Ethical Jobs founder Michael Cebon: “We’ve definitely observed an increase in inter-est from people in the private sector who are wanting to move into the non-profit world.” The company’s 2009 survey of more than 60 Australian NFPs found that the majority of job applicants to non-profit organisations were willing to take a significant pay cut up to 20 per cent to secure jobs they saw as ethical.

Simon McKeon, quoted in The Sydney Morning Herald earlier this month, said that chari-ties need to adapt. “We have more than 600,000 charities in this country… We need peo-ple from business to come into the sector and assist in consolidating, putting some out of their misery, and merging them with others so the whole sector becomes more effective.”

In 1994 McKeon transitioned into a part-time role as Executive Chairman of Macquarie Group’s Melbourne office, enabling him to support a range of causes and organisations, including joining the board of World Vision Australia. McKeon is currently Chairman of the CSIRO and Business for Millennium Development, which encourages business to engage with the developing world.

So why are corporates attracted to NFPs? The assumption that they are there by default, have experienced a “post-GFC career crisis” or are motivated by the ideal of selfless service rather than personal achievement, could be argued to derive from a limited con-cept of work as a linear progression desired by those who value prestige, management skills, high income, power and achievement.

Research into motivations of those who embrace the third sector, however, find that it is a much more complex and richer approach. Academically, the mindset is termed a “spiral career model” where a preference for work that is both personally challenging and socially meaningful is demonstrated.

In fact, as Jenny Onyx, from the School of Management at the University of Technology, Sydney, and Madi Maclean, community services consultant, state: “The concept of career is often seen as problematic for people working in the non-profit sector.”

Their mid 1990s survey of third-sector employees in New South Wales, and aligned research found that there appears to be three kinds of reasons and influences behind job selection in this sector.

The first and strongest reason reported by 78 pc overall concerned some form of personal commitment to the work itself, in particular, a commitment to social change. The second reason, reported by roughly a third of respondents, was the pragmatic reason of convenience. The third reason, reported by at least a quarter of all respondents, was their earlier life experiences, either as volunteers or as service users.

Those in more senior positions were more likely to give the reasons of religious commit-ment, philosophical or political commitment and commitment to social change.

Personally challenging and socially meaningful”: Motivations for third sector career choice.

Page 5: Philanthropy Article

career moves in philanthropy 5

“Prestige, salary and secure tenure were very low priorities when it came to applying for a particular position,” Onyx and Maclean state. “Over one-third of the respondents had accepted a salary drop at some stage.” The dominant motivation, both for entering the community sector and for seeking particu-lar jobs, related to strong values. However, respondents also placed a high premium on personal development. “The emphasis on personal development appears to be the other side of the social values coin. The two go together,” Onyx and Maclean write.

Michael Traill says that from his observations, the motivations for transferring into the third sector tend to fall into two categories: evolutionary and revolutionary.

“Revolutionary factors relate to an event or tangible experience, for example, the selling of a business and coming into money or an issue or trauma that revealed the dark side of human nature. I have seen people who experienced a financial services collapse which ended badly and found it as a catalyst for a more positive move in life. Others have longer-term experience with the not-for-profit sector and wish to spend more time doing this.”

Steve Hawkins, Executive of The Benevolent Society’s Social Initiatives, believes that the GFC did cause a certain amount of reflection and motivation for moving into the third sector “but it was more a catalyst for something people wanted to do anyway rather than something that changed people’s view on the world”.

Hawkins’ segue into the third sector from managing director and joint head of UBS’s Australian Capital Markets business was sparked by his own personal involvement in the philanthropic sphere.

“I had always intended to have a second career outside investment banking but always imagined this would be in education. However, we set up a family foundation in 2005 and I got more involved in the philanthropic space. In my sabbatical in 2009 I did some volunteering in the homelessness space and realised just because Australia is a relatively rich country didn’t mean that the Government could solve all our social issues alone.”

Ian Learmonth, who recently joined SVA to lead the Social Finance initiative, was formerly an Executive Director of Macquarie Bank for 12 years. He says SVA has allowed him to “connect his head and heart”.

“I didn’t have a particular epiphany to move into this field, rather it was a desire to take my skills and make a broader social contribution,” says Learmonth.

“I had already worked for 20 years in the corporate sector – I asked myself: ‘Did I want to make it 35?’.”

A major appeal for Learmonth is the challenge of developing the Social Finance area which is increasingly being recognised as a new paradigm for philanthropy.

Contributions and new paradigmsSocial finance is playing an increasingly important role in British philanthropy. Learmonth cites the example of UK Social Impact Bonds which raised 5 million pounds to place young offenders into social juvenile justice rehabilitation programs. Repayment to investors is contingent upon specified social outcomes being achieved. Reoffending among the target group must fall by at least 7.5pc to trigger the dividend payments in each of the six years of the bond’s operation.

Social Impact Bonds have also generated interest in the United States. In February 2010, President Barack Obama’s proposed 2012 budget stated that up to $100m would be freed up to run Social Impact Bond pilot schemes.

Page 6: Philanthropy Article

career moves in philanthropy 6

SVA’s foray into Social Finance which aims to achieve a social purpose outcome and financial return began through its role in the GoodStart Childcare transaction. The Good-Start Childcare Ltd syndicate comprises Social Ventures Australia, Mission Australia, Benevolent Society and Brotherhood of St Laurence and in December 2009 it won the bid to take over 650 ABC Learning centres from receivers.

The transaction was undertaken with the assistance of a $15 million medium-term loan from the Australian Government, along with debt financing from the NAB and additional support from a range of private investors who have provided “social capital”.

Operating as a non-profit organisation itself, GoodStart Childcare ensures all surplus funds are reinvested to improve early childhood learning and care at the childcare centres GoodStart Childcare will manage.

“We are trying to take the investment community away from the purely donation model to a middle ground approach where there is a combination of financial and social return. Any trade-offs in financial return are offset by a degree of social impact,” says Learmonth who hopes his financial background and experience in carbon direct investment and renew-able energies can assist in the task of shifting the social investment mindset.

NSW is also trialing Social Impact Bonds and has appointed the Centre for Social Impact, based at the University of NSW, to formally advise on the program.

Michael Traill believes that three concepts are fundamental to social investing today – the need to create smart ways to attract finance and mix the private and public sectors, the need to draw the best talent across all the sectors and the ability to provide a clear evidence base of success for investors.

The issue of measuring results in the social context has been a subject of discussion in current issues papers prepared for forthcoming Senate enquiries into the not-for-profit sector.

The Social Return on Investment (SROI) framework that has been developed by the Mea-suring Social Value consortium in the UK has been devised to understand, measure and manage the outcomes of an organisation’s activities. The SROI places a monetary value on outcomes so that they can be added up and compared with the investment made.

A number of executives now working in the not-for-profit sector are hopeful they can use their networks to advocate for and fund new initiatives.

“I think a lot of people genuinely want to help their fellow human being,” says Steve Hawkins. “My own personal view is that my business relationships are much better – people who I barely knew in my former life now go out of their way to try to support what we are trying to do.

“I would say the issues we face are at least as challenging as anything I dealt with in banking. In Social Initiatives at The Benevolent Society we focus on projects that are either private sector funded or are innovations or pilot projects. These include our Apartments for Life project in Bondi, our investment in Goodstart and our Growing Communities Together program in Bankstown, Sydney.”

We are trying to take the investment community away from the purely donation model to a middle ground approach where there is a combination of financial and social return.”

Page 7: Philanthropy Article

career moves in philanthropy 7

Ex-Citigroup banker, Kylie Charlton, who was Vice President in the Project and Structured Finance Group with 11 years experience in commercial and investment banking in Sydney and New York, now wears a number of hats in the third sector.

As Social Investment Fellow at the Centre for Social Impact she is actively involved in look-ing at the development of a system of social finance in Australia. Charlton is also a Managing Director and founding team member of Unitus Capital, a financial advisory firm specialising in arranging capital for microfinance institutions (MFIs) and other social businesses benefiting those at the bottom of the economic pyramid.

As a “postcode privileged white girl”, Charlton says her travels to countries such as Zimbabwe, India, Nepal, Samoa, Peru, Argentina and Bolivia have served to motivate her to use her financial skills to help bridge the divide.

learning from the third sectorCharlton says she would like to see more people with “mainstream” professional expe-rience crossing over to build careers in the third sector, stressing the need for respect between long-term third sector professionals and those shifting sectors for both skill sets are needed in designing and executing solutions for unmet social needs.

“Not-for-profits need expertise like any other business; operations, legal, human resourc-es, financial and accounting expertise are all important. However, there needs to be an understanding that social business models adopt blended values – financial, social and environmental.”

“Social businesses are not just providing a widget but a service or product which can change social and environmental outcomes for people and place,” says Charlton. “They are not just faceless business models.”

“During the toughest times, I sometimes wondered if this was the worst idea I’d ever had,” says Audette Exel, a structured finance and banking lawyer and founder of the ISIS Group, a set of businesses set up to fund and support The ISIS Foundation.

Exel was a recent recipient of a Social Enterprise Network award, bestowed yearly upon YPO-WPO organisations, and was asked by the network to share her challenges and suc-cesses.

As reported in Real Leaders magazine, Exel’s misgivings were proven unwarranted – the ISIS businesses are now in their 13th year and have provided millions in recurrent funding to the Foundation, which provides service to around 11,000 people in extreme poverty in Uganda and Nepal a year, and provided direct and indirect support since inception to around 100,000 people in need.

The Bermuda and Australian-based venture was started by Exel and friends in 1997 who saw the potential in bringing business and non-profit teams together. After initial suspicions from business colleagues that the business was purely being set up for tax reasons, as well as skepticism from non-profit organisations who didn’t believe anyone would run a business purely for social outcomes and so viewed her business model as having a hidden agenda, Exel proved that by utilising the unique strengths of each, much good could be achieved.

“Real leadership is inspiring others to come with you on your vision,” says Exel. “I believe that finding ways for people on extremes to work together for a common good is the way of the future for our planet.”

about the author

Judy Friedlander is a post-graduate researcher at the Institute for Sustainable Futures at the University of Technology, Sydney.

Focusing on organisational media strategies & campaigns in the sustainable arena, she draws upon her background as newspaper editor and feature writer with The Australian, The Sun-Herald and The Sydney Morning Herald and Channel Nine television producer and researcher.

Judy has also been awarded a post-graduate degree in Interactive Multi-Media from The University of Technology, Sydney.