Daniel Petre AO believes wealthy Australians should be giving away more of their money. Charlotte Grimshaw finds out why and how.
Daniel Petre went from corporate king to philanthropic crusader in a short space of time and backs up his tough words with generous support to a range of not-for-profits.
At age 29 he was managing director of Microsoft Australia before travelling to the software giant’s US headquarters in Redmond (Washington) where, in his mid-30’s, he became one of only two non-Americans to be appointed a vice-president.
Upon returning to Australia in 1993 he ran Microsoft’s operations in the Asia Pacific region, but left in 1997 to run ecorp (a global web communications business) and serve as a director on Kerry Packer’s PBL board.
With a CV like this you would assume Petre was in line for a long and hugely successful career in Australian business. But in 2002 he gave away his career in the big end of town to write a book about why and how men in the corporate world should be devoting more time to family life.
He also founded a leadership development business, and with wife Carolyn, dedicated a significant portion of the family wealth to setting up a philanthropic foundation, which makes grants of about $500,000 a year.
Now he is Australia’s most vocal advocate of the idea that our wealthy citizens should be encouraged, possibly forced, to be more generous in their charitable giving.
The turning point for Petre and his family came during their time in the US where they noticed that if you’d done well, there was an obligation to give time and money to not-for-profits.
“There are two drivers there which don’t apply in Australia – death taxes, and the fact that if you’re successful and you don’t give, you’re seen as a social pariah. I also feel we’re immensely lucky to have the life we do, and we should be giving something back,” says Petre.
Once back in Australia, he set up a family foundation in 1999 to provide support to not-for-profits. “It was partly a way of making our giving more organised and less ad hoc. And we wanted it to be a level of giving that we noticed – we still have a great life, but I thought it was important that it wasn’t just spare change we were giving. I think giving should hurt a little. It needs to matter.”
As well as significant gifts to a number of charities (see below), the Petre Foundation has funded two recent pieces of research into giving by the wealthy in Australia, carried out by the Asia-Pacific Centre for Philanthropy and Social Investment at Swinburne University (Victoria)*.
“When we came back to Australia in 1993 I saw the contrast with the US, so the research was partly to help me see if my hypothesis that wealthy Australians were giving a lot less than their counterparts in the US was true – which it is,” says Petre.
The research tells us that most wealthy Australians not only don’t give as generously in proportion to their wealth as their overseas peers, but even compared to average Australians our wealthy are giving a smaller proportion of their income.
“Whenever I speak to charities they say you’re absolutely right, and it’s a tragedy for Australia, but they can’t say it. No charity is going to come out and say “yes, wealthy Australians are greedy buggers” because they’ll get hammered.
“Of course I acknowledge that we do have a small number of wealthy individuals who give commensurately with their level of wealth. However we have very, very few examples of such people in Australia,” says Petre.
“The numbers are enormous – the Australian Tax Office (ATO) suggests there is something like 3000 – 4000 families with a net-worth over $20 million. So if you assume 3000 families with an average of $40 million each – that’s $120 billion.
“If those families put 10% of their wealth into prescribed private funds (PPF’s) you’d have $12 billion invested, which would give you around $700 million per year every year in cash to provide to charities. With compound performance the cash each year would probably be closer to $1 billion – and depending on who you talk to, cash donations in Australia total only about $1.3 billion a year.
“So you would be increasing the pool by at least 40% overnight. It would have a huge impact. It’s a big deal, and it’s an enormous issue for the country that this wealth isn’t being applied to bettering society.”
Petre says that some wealthy Australians have been very offended by his proposals. “You get various excuses – “It’s my money,” or “I’ve created companies, given jobs to people,” or “I pay my taxes.” So with most of them there’s no sense of responsibility, or being thankful that we have a stable society that enables them to build this kind of wealth.”
Petre concedes that PPF’s were a great innovation, but argues that the money residing in them doesn’t nearly reflect the wealth in Australia.
The Swinburne research outlines a number of different giving incentives in the US, Canada and the UK, but he says nearly all of them are carrots, “and I’m rapidly coming to the conclusion that we need a big stick – as well as the carrots.”
Petre’s solution is simple. “Why don’t we have a death tax – say at 10% for estates over $30 million. If you put 10% into a PPF you are exempt from the death tax but if you hold on to all of it the government takes the 10%.
“So it either goes to government or to philanthropy. You’re saying to people that if you don’t do something, we’re going to take it away from you.
“Who would have a problem if the lower limit is $30 million? If you’ve got $30 million are you really going to miss $3 million? We need to find ways to establish a benchmark – and I think 10% should be the least that wealthy people should consider.
“There’s no analytical argument against it. It’s purely emotive … about control and power and my rights as a rich person. Let’s get the debate going and ask the question? Why wouldn’t we do it?
“People make a mistake when they assume the wealthy end of society think as charitably as the rest of society. And with some notable exceptions of course – they just don’t.
It would be lovely to see the BRW top 200 with a column showing how much they gave last year, and have people care as much about that as about how much they’re worth.”
Petre’s involvement with the Children’s Hospital (at Westmead in Sydney) has shown him how powerfully people can be influenced by seeing their philanthropy at work, but also shown him that it’s hard to get people to engage at the right level.
He says his own most rewarding moment as a philanthropist was “probably walking into Westmead and feeling we’ve done something to help. We’re so lucky, and you feel a little less guilty about your own success.”
Let’s hope he can persuade more wealthy Australians to think the same way.
* The research reports are available at www.swinburnephilanthropy.net
1. How the wealthy give: comparisons between Australia and comparable countries (USA, Britain and Canada)
2. Encouraging wealthy Australians to be more philanthropic
Petre Foundation Gifts
2000 Chair in paediatric neurology, Westmead Children’s Hospital
2001 Chair in breast cancer research, Garvan Institute
2004 Chair in post-graduate research, UNSW