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I am very honoured to be invited to give this year's John Beveridge lecture.

This hospital and its precinct have been part of my life since I, together with my family, migrated here in 1961. Prince Henry/Prince of Wales hospitals were my father's place of work and the name John Beveridge is a consequence well known to me both as a colleague of my father's but also as a formidable force in this hospital and medicine in this city generally.

Now this place is where my wife works and where its neighbour and partner is the institution of the University of New South Wales at which with delight I spend a lot of time.

I have chosen as my topic today - philanthropy, can it grow and can it help us grow?

I chose it before the tumultous events on the credit and stock markets of recent times but I realise now that the choice of the topic was particularly prescient.

I should note that in this talk I will take a broad view of philanthropy, including within that term individual and charitable giving and also corporate social responsibility by corporations and employees generally.

Let me start by going back not to 1961 (although that's tempting!) but to 1998 (ten years ago) when I first got interested in the area of philanthropy.

At that time, in Australia we were just starting:-

• A boom period that lasted basically until the end of the last calendar year
• A period when baby boomers were turning 50 and asking the questions of what do I do next and what is the value of my life?
• Generation Y was beginning to grow up and in their teens asking their baby boomer parents embarassing questions about life, sustainability, etc;
• The difference between the rich and poor was starting to become very marked in Australia and
• With mobile phones and soon palm pilots, blackberries, Ipods, etc, the connectivity of people in a suburb or around the globe was starting to become clearly established.

In this context the lack of philanthropy was marked in Australia;-

• In 1997 the average donation of each individual in Australia was $172 per annum, this was tiny compared to the average in the USA which was at least eight times as much.
• Surprisingly though we were big donors of time with 373.6 million hours being donated in that year to volunteering etc.
• Corporates seldom talked of corporate social responsibility (CSR) indeed CSR then was a reference to a sugar company and nothing more.
• Something was amiss - clearly we were a generous nation but there was not much in the way of monetary donations to show for it.

Many theories abounded for why the abovementioned conflict existed in 1998. Two of which may be close to the mark.

First, our rich at that time had made money on paper but may not have had a lot of cash to show for it. Their fortunes on the whole were tied up in real estate or gold and resource mines and both were yet to produce great cash flows. This could be compared with the fortunes in the United States which came much earlier than the fortunes in Australia and which came from the sale of oil, manufactured products and indeed boot-legging! All cash flow businesses.

The second reason advanced is that each of us had been brought up with an expectation that the governmnet in Australia would look after the homeless, pay for hospitals etc, and if they didn't do it (which was common) we would complain but do little about it.

Looking at the tax act that applied in 1998 provides enormous evidence for the latter of the two theories advanced above. Who would believe that in 1998 (only 10 years ago):-

• No tax deduction was available to a donor who gave a gift that was not cash to a charity - in fact, in many circumstances, that donor could pay tax on making such a gift if the item he was giving had grown in value since the date he first acquired it.

• Despite no death duties, gifts of non cash assets to charities as part of someone's estate were subject to capital gains tax - tax was payable if you gave to charity but not if you gave it to your children.

• The tax deductibility of donations was only available in the year in which you gave the donation. Therefore, it was not surprising that charities seldom got any monies until June of each year when taxpayers could caluculate what tax deductibility they needed and give accordingly.

• Every hurdle was placed to stop individuals setting up charitable foundations. Indeed, there was a genuine skepticism that to do so was motivated by anything other than seeking to reduce a tax bill.

• No encouragement was given for individual employees to give money and indeed under the system that prevailed at that time, an employee giving a sum of money had to wait up to 18 months to get a refund of the tax deduction allowed to him as a result of making a kind donation.

In 1998, our large and small companies didn't really understand the importance of the not for profit sector and the work that it does. This sector, being the partners to corporates in their charitable ventures and includes of course, the operations of hospitals such as this one.

I might also point out that in 1998, only ten years ago, there were serious concerns that corporations who gave donations or got involved in their communitities were perhaps acting wrongly if they participated in this way. The questions being asked, is this for the benefit of the shareholders and shouldn't it be the shareholders who decide on their philanthropy rather than the company doing it for them?

Since my first consciousness of these issues, I am pleased to report that the game has changed. Lest you should assume that my consciousness and the change have anything to do with each other let me assure you that the growth of philanthropy has been a groundswell with many important players.

Undoubtedly, the principle reasons for the change over the last ten years are as follows: -

a. Prosperity - in good times, when people feel good, they can do amazing things. I am totally aware that they can also do some bad things but during this ten year period, people certainly changed their attitudes positively in relation to philanthropy;

b. The coming of a new generation with different wants, different requirements for their life and different social values, has been incredibly positive for philanthropy; and

c. The older generation, perhaps pushed on by the younger, have started to question whether hoarding monies purely for family is all one is here for and whether there is more to life than that.

Replicating these social changes since 1998, other things have occurred in this regard -

a. The tax laws have been changed to allow for non cash gifts to charities to be tax deductible; for bequests of non cash items to charities to be tax exempt; for tax deductions from giving to be able to be carried forward against taxable income in future tax periods. These moves have resulting in giving per person more than doubling in the seven years from 1997 to 2005, the last reliable set of numbers that I have.

b. Private philanthropic funds, the new animal which allows the establishment inexpensively of a foundation for giving to charitable funds, has been permitted and since the inception of these funds in 2001, 800 have been established with an estimated total combined value of $1.5 billion and in 2007 and they distributed $117 million to charities which are deductible gift recipients as defined in our law.

c. Added to this, employees during the ten year period have now been encouraged to give through new work place giving taxation rules which allow the instant tax deduction for gifts to designated charities.

All these are signifant but above all the mood has changed (be it as a result of awards for giving in the case of companies or just general approbation), philanthropy in the 2000s has got going in Australia. Evidence of this can be seen close to home, in relation to the success of the Children's Hospital Foundation and the monies gifted by the Lowy family and others to build the Lowy Cancer Research Facility just down the road from where we are sitting today. This building is to be the new home of the Children's Cancer Institute of Australia.

All this however, is history, and the question I have to explore today is two fold - can philanthropy grow further and can it help us to grow.

As to the first, times are bad and on the negative side -

a. The large fortunes we have seen grow in the last ten years have been cut and in some cases buried in mountains of debt - one would have to be a fool to believe this was a good environment for giving. Added to this is that clearly unemployment and personal economic hurt is growing and will continue to grow for some time. How can one possibly expect people to be philanthropic at times when so many of them are hurting. I have to mention here that it is ironic that in these times, one probably needs philanthropy the most - but I will return to this.

b. Corporations traditionally cut brand building and the less tangible parts of their expenditure in bad times. Corporate social responsibility is excellent at building brands and trust. It is also great at keeping and inspiring staff at times of full employment. If there is unemployment and there is a need to cut budgets, sadly there must be a tendency to cut expenditure on CSR.

c. The problems are and may continue to be so big that the discussion of philanthropy may be seen as of a second order - the main game going back to pre-1998 thinking, namely a dependence and need for governments to step in and do their bit.

d. Little has occured since 1998 to assist the not for profit sector in its governance. The laws have not been altered to give the sector an entity it can use tailored to its special needs. So most not for profits operate as companies limited by guarantee giving their directors large liability and potentially onerous reporting requirements. This could give rise to potential very public failures by some not for profit organisations in these difficult times.

But lest you should despair there is another side: -

a. If you look at history philanthropy has flourished often in bad times. Humans have their faults but many are good - in the great depression the big barons of industry in the early 30s (people you might have had difficulty justifying inviting to your home - their toughness and lack of social politeness being legendary) did not reduce their giving and indeed some like Henry Ford whose attitudes on so many things I despise took the opportunity to establish a foundation of enormous proportion to help prevent poverty and human suffering.

b. With our ageing population it is conceivable that the intergenerational disposition of wealth (granted perhaps somewhat diminished by falling house and share prices) will not all go to the next generation but may be applied in part to social need as many of the baby boomers realise that their moment has come to help.

c. Generation Y are becoming more and more important in business as we baby boomers grow old and tired and pass the reigns to Generation X. Generally, Y are an interesting generation. They talk of the environment but consume much if not more than we do. However I think their social conscience is more developed than those of previous generations and I think they want more in their lives. Hence they will influence the continuity of their parents philanthropy and indeed insist upon the companies they work for and buy from -to do their part;

d. I am amazed at one effect of this downturn - many in their 40s have come to see me saying that the downturn has made them think - maybe they have enough and should do good works. One who has just taken a 70 per cent cut in salary to become the CEO of one of the not for profits I am involved in is a very good example. In his mid 40s he freely said that he can't let his life go by without achieving more than just making money. He has worked out what he needs to live on and he is particularly aiming for achievement in his new role. Others may find the opportunitities in business at high salaries more limited now and wish to reduce thier lifestyle but achieve more in the community.

e. We do have a better framework to keep philanthropy growing and I think there is an expectation now that we do that. As chairman of Coca Cola Amatil I could not conceive of us stopping the work we do in the community - whether it be breast cancer awareness thorugh the pink tops on our Mount Franklin bottles - cleaning Bali Beach or using light weight bottles as they are more environmentally friendly, our management like others know the importance of it and how important it is also to our consumers and what is expected of us.

f. Partnering between the not for profit sector and the corporate sector has now become quite well developed and I believe in many sectors it has developed a momentum of its own. Eg: in the area of the environment.

g. The intervention of government into banking etc must have some effect and it does not take a lot to hypothese that one is a better citizen more deserving of government contracts, guarantees, bailouts etc, if one does one's bit and the corollary of that must also be true.

I should add here the government in the United Kingdom legislated two years ago to enshrine responsibility on directors of companies to have regard for the interests of all stakeholders including employees, suppliers, shareholders, the community generally in the decisions that the directors make. I am not in favour of such an approach believing that regulation in this area will reduce a genuine desire to help and lead to a black letter law approach (ie: an attitude that 'what is the minimum the law allows me to get away with'). I would prefer a moral motivation, less based on law and much more upon what is right.

h. Finally on the good side we have groups such as the Centre for Social Impact under Professor Peter Shergold at the University of New South Wales (next door) and, together with his partners at the University of Melbourne and Swinburne College, now formally teaching and providing research in the area of philanthropy and sharing with all of us how these can be done efficiently and correctly. It is amazing to me that it has taken so long to see such a group established and in my view it will have a good effect.

My betting is that philanthropy will continue in the short term. It may not massively grow and certainly may refocus more towards welfare etc, but in time through bequests, foundations and generally, giving will take us to the next stage.

And so I come to the final part of the topic I have chosen - can philanthropy help us grow?

Let me first dwell on 'us'.

The other day I walked through the Children's Hospital. The premises are much more basic than what I see and have in the corporate world but the spirit and feelings in those corridors is definitely superior. Perople were doing something for the world there and particularly for the young.

This feeling that I had as I walked through that building reminded me of a statement made by my late father, a brain surgeon in these environs. Referring to a very wealthy and powerful acquaintance of his when I asked what that person did, he inadvertently said "he is just a businessman". My father was not a prejudiced person but I think only now do I understand to what he was referring.

Philanthoropy and involvement in the community generally is an incredible tool to help those of us who are not like those of you who give of yourselves day in and day out to help the community. I think that in my life the true growth I have felt has come in the last ten years as my eyes open to what one can achieve in the community whether it be in medicine, the arts, education, welfare and so on.

The fact is that we in commerce in particular need involvement. Philanthropy and the like allow us to feel whole, to grow out of the narrow sphere of our business and to contribute and maybe, even more important, to feel that we have contributed.

So many of you here tonight give to the community through your jobs daily and don't need to prove to yourselves or to any of us that you contribute because you do. But without being impertinent, it is possible that philanthropy and involvement in the community can even provide growth in your situation. Narrowness is not the exclusive province of those who socially contribute little such as people like me in business. Involvement, be it financial or with time outside of one's comfort zone; in the arts or education or any of the areas I have referred to above, can produce enormous growth personally.

On a more general note it is trite to say that philanthropy can help us grow our activities.

• Faced with a revenue budget at the University of New South Wales which our Vice Chancellor always jokes is $20 million too little for whatever he wants to do (no matter how much revenue comes in) the University is now determining that new building projects must have a philanthropic component.

Without philanthropy we don't have the money to build but there is another reason. Unless we can inspire others to give to the project the project itself may not be articulated clearly enough to warrant its fruition. The Lowy Cancer Research Centre referred to above involved philanthropic dollars, university monies and government, state and federal, monies; this involvement made the venture strong, particularly also with the co-operation and resources of the Children's Cancer Institute of Australia as a partner.

• We are now working to do the same for a large centre of virology of St Vincent's Hospital, a new engineering building near Anzac Parade and, closer to home for many of you, the refurbishment of the Wallace Wurth Medical School.

Philanthropy has the ability to help us provide a focus - the wish of a donor to eradicate small pox made in the case of Bill and Melinda Gates will potentially see that occur. This - but for their insistence on that matter - may not have occurred.

One can't make light of the sadness and troubles that the economic turbulence of recent times has and will cause but there are so many reasons for optimism that one casualty will not be philanthropy in its wider sense. It should grow as its roots are cultivated by younger gardeners than I and it will and can provide growth both personal and insitutional for all of us.

Thank you.