Some call it the golden age of philanthropy.

It was heralded by the donations of super-rich ‘billanthropists’, Bill Gates and Warren Buffet, who committed a combined $US61 billion to The Bill & Melinda Gates Foundation in 2006.

In Australia, giving has been nowhere near as grand, but a progressive form of philanthropy, known as strategic or transformational giving, has taken root among a small number of high-networth people. Moving on from responsive cheque-writing and posthumous bequests, and often involving specialised trust vehicles, it indicates of a new era of philanthropy.

Its proponents are the so-called emerging philanthropists, who target specific social problems and seek close involvement with projects aiming to fix them. Unlike earlier philanthropists, who provided funding and let charities carry out their work privately, the new philanthropists demand more transparency from charities and greater control over how their donations are used.

We all give to the community sector – either through a sense of responsibility or religious beliefs, through social fundraisers or by participating in staff giving or volunteering programs. Kristi Mansfield, founder of Greenstone Group, an Australian philanthropy advisory firm, says traditional, responsive forms of giving usually address the effects of deep-rooted social problems.

While there is need for this mainstream, crisis-healing philanthropy, the disciplined, transformational form of giving targets the causes of social and environmental problems. It is also the more difficult form of giving, requiring sustained effort and more money. A number of financial planning practices catering for high-net-worth individuals now offer services to these new philanthropists, offering advice about tax-effective vehicles that enable strategically and sustainable giving.

Prescribed Private Funds (PPFs), for example, are charitable tax-deductible foundations that allow trustees to control which organisations receive distributions, but require approximately $400,000 as an initial sum in order to be practical. Other, less expensive options include donations to community foundations and charitable gift funds. But once donors have established a giving structure, how do they decide which charities should receive their money from the thousands in Australia?

Some philanthropic services providers conduct annual funding rounds, in which non-profits make applications for funding. Some donors go direct, giving to big foundations that support multiple projects or choosing separate charities themselves. Some consult philanthropy advisers. Greenstone Group has written a Social Investment Guide, the first of its kind in the country, which provides a starting-point for emerging philanthropists and businesses ready to donate strategically. It lists 23 selected projects that cover 7 social areas, and conducts due diligence and evaluations of the featured ventures.

The group began working with financial planning practice Stewart Partners six months ago to help guide the firm’s clients towards suitable social projects. “Financial planners ask us to work with their clients when they are ready to really define how their social investments will come into being,” Mansfield says. But giving money is not always enough. Some donors seek a “presence” in the projects they help fund, and volunteer to provide additional support, Mansfield says.

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