harmonizing giving and investing as a necessary step for Foundations to meeting the ‘public benefit’ test

by Stephen Viederman

I listened and lectured in Melbourne, Sydney and Brisbane in October 2005 and I admit I became an Australiaphile. While there I was struck by many similarities and differences between our philanthropies. One similarity of special interest to me was the limited interest in and even lesser practice of using assets as a way of adding value to giving as an instrument of change.

Each year the effort to “invest as if the future mattered” becomes easier as new and more sophisticated investment vehicles in all asset classes enter the market. In addition, the concept of ownership and stewardship has grown urging shareowners to engage with the companies they own by voting proxies and in other ways.

The public benefit is how the Charity’s Commission of England and Wales describes the charitable purpose of foundations. This is as clear and concise a definition as I have seen.

Unfortunately, however, this only seems to apply to giving, not to the use of the assets that make the giving possible. In Australia, I suspect, as is the case here in the US, the chasm between mission and giving, on the one hand, and investment, on the other, is still more the rule than the exception. I firmly believe that harmonizing giving and investing is a necessary step toward meeting the ‘public benefit’ purpose. [Read more…]