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Philanthropy Australia’s outgoing CEO spoke to F&P’s Andrea Riddell

Sarah Davies leaves her post as CEO of Philanthropy Australia at the end of this year. Davies gave an unusually long notice – over a year – to ensure a smooth transition and no disruption to business as usual; her leave coinciding with the end of their current strategy, giving her successor the space to shape their future from the beginning. We spoke with Davies two months out from the end of her tenure about where the sector is heading post-COVID-19 and her own plans after Philanthropy Australia.

F&P: Prior to working in the nonprofit sector, Davies worked in tertiary education and the private sector consulting in HR, marketing and strategy in Australia, Europe and the Middle East. Davies’ passion for purpose has always underpinned both her personal and professional life, and eventually this pull was too strong to ignore, and Davies pursued a career in the for-purpose sector long-term. For Davies, it’s not about ‘giving back’, an expression she doesn’t like, but about building the kind of world we want to live in.

SD: I’m quite purpose-oriented and I had always wanted to spend my time and my energy working on positive change and building community and, in particular, building equality of opportunity. 

It’s one of those things where you sort of know something, and you just either ignore it or forget it and then you get a really rude reminder. A couple of times I’ve been tempted by glittery other [jobs], and thought, “That’s okay, this is going to be really intellectually interesting, I really like the people and I can meet my need for purpose with my volunteering roles”, and I’ve stepped back into private sector, more commercially-oriented roles. 

The last time I did that I joined an organisation that I really respect and admire, and I loved the people. It was very intellectually challenging, and I loved it but after about three months I was like, “Oh my god, I can’t get up in the morning. I don’t care about rebranding a financial services firm. I don’t care about the growth strategy for power tools”, or whatever it was.

It really whacked me as if to say, “You’re a complete idiot. You know that you actually don’t thrive in an environment like this.” There has been a couple of those instances where I’ve sort of forgotten how important it is to me and I’ve had a timely reminder. It’s not that it was horrible, difficult or unpleasant, it’s just that I obviously need that motivation, that purpose and drive to make me healthy and flourish. When I’ve forgotten that, it’s whacked me around the head to remind me.

I find the [idea] of ‘giving back’ a bit paternalistic and old-fashioned. My view is that when we wake up every day as agents of change, we have deliberate choices we can make. I believe that we all have the ability and responsibility to build the kind of world that we want to live in on a daily basis.

I see it as if I want to live in a world where there is equality of opportunity, where we value each other, we respect the planet and the environment, then actually we all need to behave like that when we wake up every morning. That world doesn’t get delivered to us by government or someone else, we build it all the time. And I think giving, whether it’s giving money or giving time, that’s part of us being a democracy. That’s a privilege we have as citizens of a democracy that gives us the influence to build it.

With the COVID-19 pandemic and the resulting recession, the sector is facing unprecedented demand and challenges. With high levels of unemployment and economic volatility, we’re all nervously awaiting how this will affect giving levels. This coupled with the challenge of ensuring the sector is not forgotten by the Federal Government makes for a challenging future. But Davies is inspired by the way the philanthropic community has stepped up in response and is keen to ensure we stand by the lessons we’ve learnt.

I think we’ve seen so clearly this year that most people don’t understand [the sector], and [we can see] a classic example of this when we looked at the Federal Government’s stimulus package. When they announced the first stimulus package back in March in response to the pandemic, the government actually forgot about the nonprofit sector. We were excluded because we’re not seen as an economic entity, which is a big mistake because we employ 10% of Australia’s workforce and we represent about 8% of GDP; we are a massive economic sector in our own right. To not be on the radar as an economic sector is a real issue. 

We need to make our case both in terms of the social, cultural, and environmental outcomes that we achieve but also an economic case. And [we need to] continue to make that case in ways that are easy and digestible for people to understand and see the whole picture.

“I think giving, whether it’s giving money or giving time, that’s part of us being a democracy. That’s a privilege we have as citizens of a democracy that gives us the influence to build it.”

I think there is a critical role for peak bodies in making that case and putting it forward. The sector is so diverse and so big that we’ve never had, and I don’t know how achievable it is, a really compelling, simple proposition – one proposition – for the entire sector. But because we are diverse and disparate, that lack of a collective voice, and a compelling collective vision is holding us back. 

I do think the experience we’ve had this year with the pandemic that there are gifts in it. And one of the gifts has been people’s values check. We have had to check in with ourselves like, “Hang on, I didn’t understand how important local community support and response was.”

We’ve got to remember that what gets us through this pandemic in terms of those values is actually what helps us build a flourishing community. And so how do we maintain that and put a spotlight on it and go, “We’re losing a bit of focus, we have to remember what this taught us”?

We have learned some really good lessons, but we’re not going to remember them and we’re not going to retain them unless we identify them.

The demand for charitable services that  we’ve already seen in so many instances is escalating in a scary way. I often talk to leaders of charities that are saying, “It’s not just the demand in our usual communities and partners, but there is a whole newly vulnerable wave coming in. People who have never worked with the charitable sector before, never worked with the welfare system before, don’t know how to navigate it, and don’t know where to go to get help and advice”.

We’re in danger of being totally swamped. Looking at the [Federal Government’s] budget, and I know the budget does some things incredibly well, but there are big gaps. Where is the investment in social housing? That creates just as many jobs and stimulates that first level of the economy, but it also addresses major social issues. That’s a really wasted opportunity.

When we look at the patterns in planned and structured giving, I think that the Australian philanthropic organisations have been extraordinary this year. I think they have been incredibly strategic, very intelligent, and incredibly generous. 

We surveyed our members to ask, “What are you thinking? Have you changed your giving? What are your giving patterns?”. And 80% of our members have told us that they have changed or adapted their grantmaking response this year. We’ve seen things like increased flexibility and untying grants.

Over 60% of our survey responders established new dedicated programs.  Because 50% of them chucked more money in. When we asked them what their distribution levels were, 60% of them have distributed more than they’re required to do so. Then when we asked them how much of an increase on top of the minimum, 30% said over 15% more, so we’re talking about serious commitment. 

We asked them what they’re planning to do in this financial year (FY21). A quarter of them said they hadn’t thought about it yet, but 40% had said they’re planning on increasing again; 27% are saying they will try and maintain the levels that they’ve given last year, and it’s only 7% who are saying, “Look, we actually think we might need to decrease.” When you look at that 7%, it’s mostly the trusts and foundations who have no choice over their distribution, where their trustees decide it for them, and they don’t have the flexibility of tapping into capital or doing anything else. From a planned and structured giving perspective, I think philanthropy has well and truly shown up. It’s been extraordinary and they should be completely celebrated. 

The slight dampener on that is, we still have quite a small philanthropic sector. Trusts and foundations and family foundations and corporate foundations are being extraordinary, but we need more, we need more people to work this way.

Davies is particularly excited about how this response from the philanthropic sector will carry through long-term and believes this could be an exciting opportunity for the sector and one that Philanthropy Australia has been pushing for.

When we looked at how trusts and foundations responded back in March, how they untied grants and increased flexibility and took some of the hoops that you have to jump through to get grants away, they reached out to their partners and said, “What else can we be doing?” 

Those sorts of characteristics are the things we’ve been talking about for a few years as general best practice philanthropy. So we asked our members, “Are you considering making some of these changes your new normal? As we move out of a response phase and turn our minds to recovery, are you thinking about any longer-term changes to your grantmaking practice as a result of this experience?” Nearly half of them said “yes”, and that is fantastic! 

When we said, “OK, what are you thinking of?”, half of them have said increased funding for partnerships and collaborations, 36% of them are saying more multi-year funding. So 36% of them are saying, “We’re really seeing the benefit of this flexibility”, so they’re increasing flexibility in administration or reporting requirements.

Then you have 41% of them saying, “We need to add more capacity-building grant funding”, so shifting away from specific projects. One third are saying, “We’ve simplified our grant making process this year: we’ve offered more rounds; we’ve made it easier and quicker.” And they’re saying, “You know what, it’s working for us, too.”

I really hope we maintain these kinds of practices and this becomes the new normal in mainstream philanthropy. Because I’m so inspired by how our members have responded this year. I think it’s utterly extraordinary.

While the diversity in the sector can inhibit it from putting on a united front, Davies also believes that diversity is the key to its success. Diversity – not only in the breadth of organisations and causes but also in its people, particularly those in decision making positions.

One of the things that I’ve learned [from the sector] is that we really need 1,000 flowers to bloom. One of the reasons people get paralysed or nervous about stepping into giving is there are so many things that we need to address, and so many ways to give and so many things to give to. How do you say that one thing is more important than another?

What I’ve seen is the diversity of the sector is so important, and it’s important for people to follow their passions because that’s what makes [donating] sticky, that’s what makes it meaningful and this long-term commitment is what’s going to get us to the change that we’re all after.

The conversations and the thinking around diversity within our entities, and certainly within philanthropy, is starting to happen in a more consistent way. The way it’s being framed in philanthropy is around power and decision making. Who has the power to decide where the money will go? And what are the characteristics of those decision makers that might influence them in a way that might be unintentional but may detract, ironically, from the fundamental purpose and desire of the granting program?

We are starting to have these conversations. Yes, they’re uncomfortable, it’s not happening consistently across the sector, but it’s bubbling up.

Our job as Philanthropy Australia is to create the environment and the space and prop up the thinking that allows people to reflect in a constructive way, and then light a path for people who say, “Actually, I want to change this – what can I do?”

Our role is not to tell people what to do but to create the stimulus and the content and initiate the thinking and then put a spotlight on where we’re seeing it done really well in practical ways, where people can say, “You know what, I can do that.”

We’re starting to see a really good diverse range of how people are approaching that, and the conversation has been around “What’s our governance structure, what’s our staff structure, where’s our lived experience in this, where is our diversity to help us make better decisions?” 

Because the jury is done on that one, whatever way you want to look at it, [diversity] improves decision making.

As we wait and see what’s in store for the sector, Davies is also enjoying the same level of mystery for her own future. Davies’ successor, Jack Heath, will commence his new role as CEO of Philanthropy Australia in January 2021 after eight years as CEO of SANE Australia.

I have no idea what I’m going to do next. I do know that whatever I do, it has to be in the for-purpose space. That’s just who I am. I don’t want to put my energy into anything that doesn’t matter to me. The people are so inspiring and it gives me such hope and energy. I’m kind of addicted to the sector in that way. 

Other than that, I don’t know. This job has been pretty busy and full on. I love it and it’s great. [I have the] pedal to the floor through to the end of the December, and I haven’t got the bandwidth to think about [my next steps]. 

I’ve never done this before so I’m going to take a break over the summer, decompress and then put myself in the lap of the gods! 

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