Originally from the Australian Financial Review
Investment banker John Wylie is adding another element to his philanthropic interests: a not-for-profit advisory group for charities.
“In the corporate sector, chairs and CEOs have people, like the independent advisory firms, they can turn to for advice. But it’s really patchy in the charity sector,” said Mr Wylie, who with his wife runs the John and Myriam Wylie Foundation, which was ranked 47th in The Australian Financial Review magazine’s Top 50 Private Givers list.
“From a philanthropist’s perspective, it’s not just about giving money. The most powerful thing you can do is not to provide financial resources, but skills, and that’s where you get the greatest leverage, the greatest impact. It is the most important thing we will do.”
Mr Wylie has recruited former BHP staffer Tom Forde to head up Tanarra Philanthropic Advisors, a pro-bono independent advisory service that will draw on the resources of Mr Wylie’s 15-person Tanarra Group, which includes advisory, private equity and structured credit investment funds.
The pair hope to provide independent advice to about 12 not-for-profits in the first year, and say they will see if the model is scalable beyond that.
The group – which Mr Wylie said was unique in this market – will advise Australian-focused charities, which operate in the education, community welfare, health and Indigenous sectors.
Mr Wylie said financial stability was the biggest challenge for the not-for-profit sector. And he argued a stronger relationship between government and charities could be a solution, particularly at a time when governments were under pressure to cut budget deficits and curb spending on social welfare.
“There’s a really powerful case for these charities to make to governments, and say give us medium-term funding, provide us some financial sustainability, and we can provide all the services you provide otherwise as part of a big government organisation, and we can do it much more effectively as a smaller organisation,” he said, adding YMCA Bridge had successfully used this approach.
“We think that’s a big opportunity and we’re going to try and help them. They haven’t had the relationships, and they haven’t known how to pitch their case to government, or get the right hearing from government.”
More broadly, Mr Forde – who said he saw first hand working with the BHP Foundation how hard it can be to deploy funds – said the advisory firm would look at a variety of ways to advise charities on strategy, including whether the board and management had the right set of skills, cost base and more effective ways of generating revenue.
“Hopefully, by helping charities improve their strategy, improve their business model and their financial models [it] should make them more investable,” Mr Forde said, adding the pair are acutely aware that the not-for-profit sector had different drivers than the corporate sector, and the skills were not directly transportable.
Mr Wylie said helping the charity sector achieve their goals could also reduce the view that sitting on the board of a not for profit could increase reputational risk as a director.
Mr Wylie said he and his wife Myriam first began thinking about the concept about a year ago.
In December 2016, the foundation used a private $8 million donation to the State Library of Victoria to champion leveraged philanthropy, a new model of charitable giving that he says holds the key to preserving culturally significant public institutions.
Under the model the government contributes $2 for every dollar donated privately, an inventive approach that turbocharges the donations made by philanthropists and charitable organisations.
In 2015, the John and Myriam Wylie Foundation, donated $5 million to the University of Melbourne to establish a professorship of Australian literature called the Boisbouvier Founding Chair.