Daniel Petre Lecture: What Has Philanthropy Got To Do With Me?

In his lecture for the Centre for Social Impact (CSI) “What has philanthropy got to do with me?”, Daniel Petre AO spoke passionately - and humorously - about the need for a shift in thinking about personal wealth, and the responsibility of the individual to engage in philanthropic endeavours.

Petre opened his lecture with some cold hard stats: Australia, he said, is not a giving nation. As a percentage of our gross domestic product (GDP), philanthropy accounts for less than one percent - just 0.7%. This is far below that of the US (1.7%) and marginally below the UK (0.77%) and Canada (0.73%).

He said that we are experiencing a loss of “doing what is right” and to some degree, we are lying to ourselves about our generosity.

Gates

In 1988, Petre met and worked with Bill Gates, perhaps the world’s most famous philanthropist. Petre spoke extremely highly of Gates, and claims he is without doubt the smartest guy he’s ever met.

He spoke at length about Gates’ strong sense of philanthropy and ‘doing what is right’ - traits he learned from his mother, Mary Gates. She was a tireless charity worker who once said:

“If you are successful in life, it is your responsibility, not your choice as to whether you engage energetically with charities”.

This sentiment clearly resonates strongly with Daniel Petre and provides the foundation for the theme of his lecture.

Buffett

Petre went on to discuss Warren Buffett, quoting him and doing a terrific job of capturing his philanthropic spirit. Buffett, he said, has a strong belief - and understanding - that fortune has a way of favouring the already-wealthy, but ultimately, is largely about luck.

“If you’re the luckiest one percent of humanity, you owe it to the rest of humanity to think about the other 99%.

Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into.

If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner.”

Carnegie

He went on to talk about Andrew Carnegie, American steel industrialist and philanthropist at the turn of the 20th century.

Carnegie, he said, thought that our lives should be divided into thirds: the first should be spent learning, the second, earning, and the final third should be spent giving those earnings away. One of Petre’s favourite quotes is by Carnegie:

“The man who dies rich dies disgraced”.

He said that Carnegie’s “Gospel of Wealth” from 1889 explains that it is the social responsibility of the wealthy to look after everyone. Social disruption and decay leads to a poorer society in general. It might sound self-serving, he said, but it is in society’s best interest for the wealthy to step up.

Why engage?

So how does an individual start on a more philanthropic path? Put differently, why engage? Because, said Petre, It’s about what’s right for society. This, he said is “not fluffy, it’s real”. Engaging, he said is not an option. The issue is how to do it.

1. You must apply a work-like energy and focus.
2. Find something you genuinely care about, make it personal to you.
3. Choose organisations that can move the dial.
4. Only fund those activities that are worthy. Do not fund mediocrity.
5. Donate a meaningful amount of money - this is crucial - it has to matter to you.
6. Measure performance.

Of these points, Petre talked at length about point five - the issue of donating a meaningful amount of money. To use himself as an example, he said that he and his wife decided to allocate more than 30% of their wealth to the Petre Foundation.

This, he said, was noticeable. It was significant. It was not, as cited in the case of a ‘very wealthy friend’ who donated $5 million per year, when his jet fuel bill was $30 million per year, a “rounding error”. He went on to tell some extremely amusing stories about the “irrational response of the wealthy” and the absolutely unfounded fear of giving away a portion of their wealth.

Where to focus?

Petre then took the chance to tell a more personal story of why he and his wife chose to invest the way they did.

He funded paediatric neurology and breast cancer, after members of his family were affected by both, he funded youth suicide prevention, understanding a role that technology has played in the increase in suicide and self-harm rates, he has funded doctoral research grants and he’s funded The Hunger Project in Burkina Faso.

This latter project clearly was a source of pride as the structure of this project meant that an outlay of $500k helps a staggering 25,000 people year-after-year, through the building of a grain store, school, microfinancing bank and medical centre. His mantra for choosing who to support? Go deep, make an impact. Do not ‘pixie dust’ it.

Issues to contemplate

The right amount to give or allocate must be seen as a percentage relative to your wealth. It needs to matter. Petre called for tax structures to be implemented to encourage the wealthy to donate. State taxes, he said, will motivate the wealthy to give. “Celebrate the proportion of giving, not the absolute!”.

He said that there are issues with corporate social responsibility (CSR). He said that CSR within big organisations can be extremely self-serving in that companies with significant wealth, and their well-paid CEOs, hide behind it with tokenistic donations and events. And worse, the media lauds them for it.

Again, he spoke of the lack of meaning behind the donation. People, he said, can’t do maths: again, it’s the proportion that counts, not the absolute.

Q&A

A lively and engaging Q&A session saw a number of questions asked, but two responses stood out. When asked what he would communicate to board members if he had the chance, Petre said he would loudly advocate personal public giving, and being upfront about it. This is also a sentiment loudly echoed by David Gonski in his lecture given in the same CSI series.

Finally, a participant brought Petre’s expertise in technology to the fore and asked what he thinks is the next major wave of technology that can positively impact the social sector. Petre was unequivocal in claiming crowdsourcing has huge potential, not only in fundraising, but in outcomes measurement and reporting. And he said that without doubt, its future lies in mobile applications, not desktop.