THE DOMINION POST,    18 MAR 2006,    Edition 2,    Page 8.

Social responsibility

Sarah Boyd

New Zealand's billion-dollar philanthropic sector helps fuel social services and community projects around the country -- but Wellington's missing out on its fair share. Sarah Boyd reports.

It pays to live in Southland. With just over 100,000 people, it is one of the richest areas not only in New Zealand but in the world when it comes to the level of grants available for community projects. It's helped build what's known as social capital -- state-of-the-art sports stadiums and a zero-fees regime that has resuscitated the local polytechnic.

The reason lies in the historical legacy of trustee banks. They were sold during the financial reforms of the 1980s and their assets distributed into regionally based trusts for community endowment. But rather than being based on population, the money was divied up based on the patronage of the bank in each area.

In Southland, the trustee bank was huge and now, per head of population, Southland's community trust is the wealthiest in the country.

Layered on to that advantage is the fact that Invercargill has a licensing trust with control of all the gaming machines in town, and the nearby Central Lakes trust distributes money in some parts of Southland as well.

The community trust alone has an asset base that would allow it to give everyone in Southland $1568, were it so inclined.

If the comparable trust in Wellington did the same, it could muster only $98 per person.

It's an accident of history, says Southland community trust chief executive John Prendergast, coupled with some canny investment decisions in the 1990s. The result is a big bag of money that must be carefully managed.

"Just the mere presence of a large pool of community wealth I'm sure is the trigger for projects. So our challenge is to make sure we give to the good ones and throw out the bad."

That's easier to do when you have $7-$9 million to distribute annually to a small population. The community trust of Wellington has about $1 million a year and has developed tight funding criteria, turning away more than 90 per cent of applicants. "It's unfair, and it's seen to be unfair," says Wellington community trust executive director Francie Russell of the discrepancies between the various community trusts. "But there's a reason behind it."

The first community savings bank was in Wellington, but it was only open a short time and when it returned in the 1960s, the capital was already over-banked. So when the allocation of the trustee banks' assets was made, Wellington was a loser.

The community trusts are only one part of the philanthropic scene in New Zealand, but they're important. The ASB Trusts -- Auckland's community trust -- distributes $50 million a year in its region, which its chief executive, Jennifer Gill, estimates is about double the amount given out by all the family trusts in the country.

Ms Russell says Wellington was not the only region shortchanged. But she says people need to realise it's an on-going disparity that will only deepen over the years.

"In a place like Southland, they can't spend all their money. They are just going to have more and more."

She says the time to address it was the late 1980s, when the assets of the bank were divived up. But there are still steps that could be taken. "The Government needs to recognise it and maybe it becomes a factor when it evaluates its funding around the country. I'd never say it needs to be a higher weighting, but it needs to be a factor."

As well, the trust's been keen to try to grow the philanthropic dollar in the region. Wellingtonians may be well-off but, like the rest of the country and unlike places like the United States, the notion of philanthropic family trusts or individual endowments is not well developed.

So the community trust welcomed the setting up of the Wellington region community foundation, so much so it houses them in its premises.

The foundation wants to encourage donors to give money for regional projects, either now or in bequests. Local trustees will decide how the money is distributed.

"People can either leave money for a general pool for the betterment of the region -- or a particular part of the region -- or they can, say, put it into working with younger people," says executive director Sue Piper, who is about to launch its first big push for funds.

She says there's evidence that Wellingtonians are generous in leaving money in their wills for various causes, but sometimes do so in a way that is inflexible, for example to a particular group that might go out of existence. "The key is that needs change, and we want to make sure that people's bequests have a lasting value."

Community foundations are a new development for New Zealand and a fast-growing trend worldwide. Seven in distinct geographical regions have been set up so far -- thanks to a financial kickstart by the private philanthropic body the Tindall Foundation.

It's a tiny beginning and unlikely to ever challenge the dominance of lottery funds, the gaming trusts -- that control the pokies and must by law give a certain percentage to the community -- and the community trusts.

Corporates, too, are starting to be more significant through the setting up of foundations.

"Philanthropy" isn't the right word for much of what goes on, says Ian Hines of the JR McKenzie Trust. "It implies someone made a personal decision to give something. But most of the big non-government money is the community trusts or the gambling trusts and energy trusts. Grant-making is a better word."

JR McKenzie is one of the important exceptions: a well-known private philanthropic trust set up in 1940 by the founder of the McKenzie chain of department stores. It hands out about $3 million a year, running on 1 1/2 paid staff and a team of volunteers who advise trustees on funding applications.

"One of the big trade-offs is, do you give a little to many or a lot to a few?" Mr Hines says. Three-quarters of the people who ask for funding receive something.

The trust will consider on-going funding over several years, perhaps for a new project that needs time to get off the ground or to help an organisation build up its own structures. In the jargon, it's known as "capacity building" and it's the sort of support that struggling community organisations dream of.

"When we look back, some groups have had multi-year funding, but they didn't know that at the time. We tend not to trumpet it too loudly."

Commit yourself to too many longer-term projects and you start to realise you are a small player, Mr Hines says.

The Tindall Foundation is another large family trust, set up in 1995 by the Tindalls, who provided it with a percentage of their financial share in The Warehouse. It has handed out about $57 million over the past decade -- including $7 million in donations in the past financial year.

Manager Trevor Gray spent 30 years in cash-strapped community organisations before taking on the job. The foundation gives about half its money in the form of bulk-funding to organisations who in turn distribute it locally to voluntary groups. For the rest, it tends to look favourably on innovative ideas or projects where community groups are working together to help themselves.

"We're talking long-term stuff," Mr Gray says. "We try not to do just year grants -- we do three years or even longer."

Like others in the sector, it's keen to encourage New Zealanders to become more generous. It has funded Philanthropy New Zealand, an umbrella group for the country's private philanthropists, trusts, foundations and businesses that also wants to increase donations and promote best practice for making grants.

The Tindalls are not keen on public attention for the foundation's work. That's common among private philanthropists, making it difficult for Philanthropy New Zealand executive director Robyn Scott when she's trying to highlight the $260 million in funds its members gave out last financial year.

There's a feeling that the sector is becoming a little more sophisticated, a bit more savvy at choosing projects and at matching the evaluation demands to the level of funding.

"In some ways, the smaller the amount of money, the smarter and more strategic you need to be," says Ms Scott, noting that some of its members have very small amounts each year to give.

There are different approaches to philanthropy, from simply responding with cash when organisations ask, to donors being much more involved and directing where the funds end up.

Mr Hines says there are no right answers. "But there is a wrong answer and that is to thoughtlessly proceed. As long as you have a thought-through plan, that's better than it being a lucky dip."

Social responsibility

Vicki Culling was trawling the Internet looking for funding sources for the volunteer organisations she's involved in when she came across the dream opportunity.

Rather than handing over money, it was offering her time: a year with a salary paid to work in the organisation of her choice.

It's a scheme run by telecommunications company Vodafone, one of many corporates to develop a social responsibility programme.

Allowing employees to work in a charity of their choice for a day a year is popular, while others make substantial one-off donations or have on-going sponsorship arrangements.

The determined Ms Culling is now the recipient of a World of Difference award. She's using it to work as project manager for Stillbirth and Newborn Death Support (Sands), an organisation offering support to parents who have lost a baby.

It's a national network of volunteers who run meetings or simply visit, even months after the event when people think the parents should be over it.

The organisation's been largely invisible, but she's hoping to change that during her year on the job. She receives a generous expenses allowance, which will enable her to visit coordinators around the country and establish a website.

"I think I wrote -- `Please, please, I'm brimming with ideas'," she says of her application. She's one of four people chosen to work in a charity for a year.

Vodafone runs the programme through its charitable foundation, which also makes grants to organisations. Some tie in with the nature of its work, such as the partnership it has established with the Royal Foundation of the Blind to help develop computer technology for the vision-impaired.

"For the first time we've moved into projects that are longer than a year," says Vodafone's Raphael Hilbron.

"Partly, it's the nature of the project, but it also reflects a maturing of the foundation, a getting to grips with what social foundations and charitable partnerships are all about."

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