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On philanthropy, especially in Australia

By Don Aitkin - posted Wednesday, 10 July 2013

Geraldine Doogue's 'Compass' program on the ABC often finds me as a viewer. It is about religions (one day I'll suggest that she does one on 'climate change'!), and since I am not religious in any way, I appreciate its perspectives on that important aspect of life, which are always well done.

A recent program was about philanthropy in Australia, and centred on a number of wealthy men who were putting a good deal of money, energy and time into worthwhile causes. Why wasn't everybody doing this who was wealthy? After a certain point, after all, you simply have much more money than you can spend in order to live. One of them more or less asked that question. He was going to put to some of his rich mates that they do the same as him. Why didn't we have a culture of philanthropy like the one in the United States? And so on.

It was at that moment I wanted to call out that there was a straightforward reason. Not only is Australia not like the US, but no country of which I am aware has a philanthropic culture like the US - and there's a good reason. The wealth of the US's richest people has come in three great spells. The first was in the opening up of the American continent in the 19th century, while the second came in the first third of the 20th century, and the third in that century's second half.


The 19th century produce great fortunes in railways, banking, iron and steel, insurance and food production. The next phase was about oil, printing, motor vehicles, movies and retail. The most recent is from technology of all kinds, especially in communications. The earliest philanthropists on a large scale in the US had made their money in banking, like Morgan, or steel, like Carnegie, or oil, like Rockefeller, and they established the giving culture.

Their riches lived mostly in stocks and shares, and were easy to give away. It's worth noting also that the USA now has a population of around 350 million. One cent from everybody is worth $3.5 million. To do something at the national level in the USA, and be rewarded for it, produces great wealth. Even crowd-sourcing, as President Obama learned, could produce millions of dollars for an election campaign in a country so large and so rich.

Australia's great wealth in the 19th century came from primary production and gold. Colonial governments built the railways, from imported steel. The banking system was heavily dependent on foreign capital (as indeed was that of the US in the 19th century, at the beginning). Much of the gold wealth went into land, and the really successful finders either frittered it away or sent it overseas, like William Stanford, an American who endowed the library of the university his brother set up in Palo Alto California. No philanthropic culture developed here to any great extent, for good reason.

Because so much of our wealth was in land, inheritance patterns meant that the property was not carved up for the children, but handed on to one of them, usually the eldest son. The successful graziers, like the Falkiners, Dangars, Whites and so on invested their earnings in improved production. In short, we had no philanthropic culture of the kind that flourished in the USA, nor could we have had, given the emptiness of the Australian interior, and the way it was developed.

Commercial and industrial wealth did appear in Victoria in the 19th century, but because the colony kept taxes low in order to encourage more industrial development, the governments had little money for hospitals and secondary schools, both of which came quickly to depend on philanthropy. In NSW, on the other hand, taxes were high, and public spending followed suit. Victoria developed a philanthropic culture to a degree; NSW didn't.

Australia grew up in a different way, and our culture is accordingly different. We have a large voluntary sector, which is certainly a form of philanthropy, where people who aren't at all rich give time and energy, and some money, to worthwhile causes. Our voluntary sector is the most notable in the world, so far as I can determine, with two interesting exceptions: we are not notable for joining political parties or for going to church.


We now do have some really rich people, and some of them have come to do the view that they could use some of their wealth to support worthwhile causes. I'm all in favour of that. But in a sense Australia is 150 years behind the USA in developing a culture of philanthropy among its very wealthy. Today's wealthy Australians have made their money in mining and technology - or, more broadly, the new wealth is not tied to the land, and can be given away without imperilling the next generation.

How Australia 'works' as a society is an interesting study. As I've said before, our voluntary sector is very large. Some people would like it replaced by the kind of cradle-to-grave system that is best known in Sweden. It would certainly be more complete then, but I think we would then miss some of the spirit our our country. You don't have to be rich to help others in our country, and extraordinarily large numbers of Australians do that every day. It's something I value.

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About the Author

Don Aitkin has been an academic and vice-chancellor. His latest book, Hugh Flavus, Knight was published in 2020.

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