By Damon Kitney

Investment veteran Charles Goode has some strong views on how philanthropy needs to change, and it possibly involves your super.

Charles Goode has always lived by a simple motto over his 84 years.

“I think if you’re in a democracy, and I come from the Liberal background, you don’t want government doing everything. You want a society in which the government gives you a hand up, rather than a hand out or having a heavy hand on you,’ he says.

His Liberal philosophies explain why he has long chaired The Cormack Foundation, a private – and sometimes controversial – fundraising arm of the Liberal Party.

Over his long corporate career, Goode was chairman of ANZ Bank, Woodside Petroleum and is today still chairman of the listed Australia United Investment Company, as well as Chairman Emeritus at boutique investment bank Flagstaff Partners.

But what is less known about Goode is his life motto has underpinned his chairmanship since 1994 of the 58-year-old Ian Potter Foundation.

Each year, the $800 million private ancillary fund distributes at least $32 million to different charities and philanthropic projects.

“Part of that mixture in that society (where government gives you a hand-up, not a hand-out) is that you contribute to the society through volunteering and philanthropy. That makes the kind of democracy and society we have. So I want to be part of that,” Goode says.

As he prepares to turn 85 on August 26, he’s keen to talk about his passion for philanthropy which draws from personally knowing Sir Ian Potter, who served as chair of the Foundation that bears his name for three decades.

“I knew Sir Ian when I was a young man. He was good looking, enormously charismatic and energetic. He also had an international viewpoint because he travelled widely. As well as being a great financier and businessman, he also wanted to contribute to community,” he says.

“I was too young to actually have a close, intimate relationship with him during his active years. I saw more of him in his retirement. I don’t think you can be chairman of a philanthropic foundation, and not be imbued with the benefit it can give.”

Today the Ian Potter Foundation is fully invested in the Australian United Investment Company and the related Diversified United and Mirrabooka LIC’s, where the turnover of the share portfolios averages around 7 per cent annually and the average stock holding is 15 years.

Multi-year funding is now the norm for the Foundation, with the average duration up from 13 months in 2015 to more than 36 months in 2022.

Last year the Foundation announced the creation of a Flagship Grants program where it will invest substantial funds over an extended period in what it calls “supporting ambitious efforts to deliver transformative impact on pressing and entrenched issues of real significance facing the nation.”

The first project it backed was Watertrust Australia, set up as an independent source of water and catchment policy advice.

“We are now are trying to make some of the major grants flagship grants and that’s just to say, ‘Can we ascertain a need or a gap in the community’s well-being programs and collaborate with others. Are there other foundations to fill that gap’,” Goode says.

In recent years the Foundation, like many major philanthropic groups, was forced to support established mainstay charitable organisations that needed to get through the Covid-19 pandemic. Goode says that will continue under new chief executive Paul Conroy, who recently replaced Craig Connelly.

“I think the established organisations – especially the theatres, the symphony orchestras, the ballets, those that rely on public attendance and fees from those attending – they have still got a way to recover and get back onto an even keel. So I think they’ll need major support for another few years,” Goode says.

The Foundation has also bought into Geoff Wilson’s Future Generation Investment Company and the Future Generation Global Investment Company, in which fund managers waive fees and 1 per cent of the funds’ net tangible assets are directed to charities.

“As we wanted to support charities, those two listed vehicles provide diversified top fund management with no cost. We’ve invested substantially enough that we have the right to nominate which charities our 1 per cent goes to. So that is good diversification and professional management at no cost and their performance has been quite satisfactory,” Goode says.

Shake up needed

As someone who has been a leading figure in the philanthropic sector for decades, Goode has some strong views on ways the Federal Government could better assist charitable organisations.

His biggest – and perhaps most controversial – idea relates to self managed superannuation funds, who currently are required to only accumulate and distribute funds for a member’s retirement.

“I don’t see why, if the superannuation fund is worth over $1.6m or over $3m, they don’t allow it to be able to make donations. It would be good for the community to have such superannuation funds distributed to charitable organisations,” he says.

He also supports an American model where philanthropic foundations are able to provide funds out of their corpus – potentially lending the money at a low interest rate – to charities.

“To do so would facilitate the expansion of impact investing in Australia. It is well and truly tried in America and works very well,” he says.

Public ancillary funds are required to distribute at least four per cent of the market value of the fund’s net assets each year.

But Goode believes the grants should be averaged over three years.

“So that if someone deferred in June and said, ‘Look, we’re not quite ready, or we haven’t got an approval for our building.’ Instead of rushing to give someone else the funds, it would be better if you could just be under that year, as long as you made it up in the subsequent year or two years,” he says.

He also wants donations to be able to be carried forward – like other forms of tax deductible expenditure – to avoid people having to defer their commitments for tax reasons. He also believes private ancillary funds should to be able to make donations to public ancillary funds.

“The private fund may not have had time to have done the work to find out where they want to give and they know that the public one has done the work and the research. So they should be able to just give to that,” he says.

Despite his low media profile, Goode has never been short of an opinion on public policy issues.

When asked about his views on the performance thus far of the Albanese government, he answers that it has “started very well.”

“The first budget was sensible, in my view. Prime Minister Albanese has focused on certain issues like an integrity commission, he’s getting to grips with defence, and focusing on what we need to protect this country. Foreign policy has been very good in opening dialogue with China, but also keeping true to our values and focusing on Southeast Asia and the South Pacific region, which is our home territory. So I think so far, they’ve been very good,” he says, stressing he is speaking as an individual and not as the chairman of The Ian Potter Foundation.

But he also sees some “worrying signs”.

“This nibbling away at the edges of franking credits and abandoning the Australian Building and Construction Commission, plus introducing multi-employer bargaining without a lot of discussion. It was fairly rushed through Parliament. The policies may be sensible, but there was very little discussion with industry about them and therefore, it hasn’t been a collaborative policy,” he says.

Amid vehement business criticism of Treasurer Jim Chalmers’ new economic model that could see a return to higher taxes and bigger government, Goode worries Covid-19 has made people more accepting of government involvement in their lives, which has made them less self-reliant and self-sufficient.

Although he notes that the current Labor Government finds itself in a very different position to its predecessors, which have come to power and usually undertaken a number of high spending initiatives.

Now Labor has come into Government inheriting significant government debt and a sizeable budget deficit.

“If they can show they can handle this unusual situation for them to inherit, it could be the making of them,” he says.

Still work to do

The Ian Potter Foundation makes significant grants to the indigenous community and Goode is worried about the proposal to amend the Australian Constitution to establish the The Voice, a new national body made up of First Nation’s people to advise government on laws, policies and programs affecting them.

“Once you put it in the Constitution, it will become subject to judicial interpretation. There’s a trend of judges moving away from using black letter law and interpreting the spirit of the legislation and they are starting to make policy, as we find in America,” he says.

“Why not establish The Voice by legislation so that you are in control of it rather than leaving it to the courts, and you can modify it and see how it goes. I haven’t heard a good argument against that.”

He also worries about the composition of The Voice.

“We think there will be 24 people, but they will be nominated by the government or other organisations? It is not clear that they will be elected by the Aboriginal people and it’s not clear what budget they will have and whether they will need the backing of their own department. It is also not clear whether the Constitutional need to have The Voice might hold up legislation, maybe for months. How would a government bring down a budget containing welfare measures if it had not heard from The Voice?”

More broadly, he believes the government could do better in its consultation with indigenous people.

“I didn’t see a lot of consultation when they cut out the debit card, just before Christmas. I didn’t see a lot of consultation when they removed the bans on alcohol in certain Aboriginal communities, when the women didn’t want them removed. Where was the process of consultation,” he asks.

Waves of alcohol-fuelled lawlessness recently forced the federal government to reintroduce top-down alcohol bans in Indigenous communities, an uncomfortable throwback to the Howard-era federal intervention in the Northern Territory.

Going forward Goode believes the surprises that are being thrown at governments locally and globally – like Covid-19 and the Ukraine conflict – mean the competence of the whole team will become even more important.

He recites a famous line from Dr Martin Luther King, which he believes will be come the model of leadership for the future: A genuine leader is not a searcher for consensus but a moulder of consensus.

In his role as Chairman Emeritus at Flagstaff, Goode continues to lead from the front as the statesman of the firm, regularly coming into its office in Melbourne’s “Tower of Power” at 101 Collins Street dressed in his trademark suit.

“I don’t work as hard as I used to, I’m not as productive. But I think going to work helps you mentally keep on the ball. You meet interesting people. The leaders in our community, especially in the not for profit area, are wonderful people to be engaged with. I also feel it makes my life worthwhile,” he says before adding with a wry smile: “I could be facetious and say, ‘I have less to do if I come to the office than if I stay at home and get instructions.’ But I really come because I want to be part of the community, play a role and feel I’m contributing. I think it’s good for one’s health and vitality.”

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