By Caroline Gurney
The Covid-19 pandemic has made it painfully clear that our collective emotional health is in jeopardy. Lockdowns, home schooling, job losses, isolation and border closures have all taken a devastating toll, and their impact on families, healthcare facilities, schools and workplaces will be felt for years to come. A recent study by Monash University showed a doubling in mental health problems during the recent crisis.
How we address this challenge is critically important. If we don’t, we will continue to lose days, weeks and even months of productivity – at both work and school. You only have to look at the Business Council of Australia’s website to see how seriously companies are taking the threat, from guiding staff on mental health issues to increased corporate giving in the space.
We no longer live in a world where societal concerns are separate from business objectives. Just as the impact of climate change has come to shape investment decisions, companies now recognise the costs associated with not addressing employee mental health issues. With 75 per cent of these issues developing before the age of 25, we need to reach young people early and help them to build the resilience, adaptability and coping skills they need to navigate life and the workplace. The business case is as compelling as the moral one.
So the question facing the corporate community is no longer whether to act on the looming mental health crisis – but how we do so in the most effective way.
In my previous role, at UBS, I was acutely aware of the pitfalls of raising charitable funds in the traditional way. Among the many challenges, the biggest was securing a reliable amount of funds for charities year in, year out. It became clear that in order to drive meaningful and lasting social change, the involvement of the investment community was needed.
Geoff Wilson was several steps ahead of me.
Since 2014, he has provided the opportunity to be both a successful investor and a philanthropist through Future Generation. Geoff realised that by combining the skills and expertise of the funds management industry with shareholders who wanted to achieve more than just profit, we could better tackle complex social problems like mental health.
After serving on the Future Generation Australia board for three years, I took on the role of chief executive at the end of September. Future Generation’s model is based on our fund managers generously forgoing their management and performance fees so that 1 per cent of net tangible assets can be donated to charity.
Our focus is on charities that work in the mental health and youth at risk sectors, such as ReachOut, Youth Off The Streets, Mirabel Foundation, Australian Indigenous Education Foundation, Black Dog Institute and Kids Helpline.
In the seven years since inception, Future Generation companies have donated $52.9m, putting us at No.28 on the list of Australia’s top 50 corporate givers this year.
But Future Generation is as much about making money for our 15,000 investors as it is about giving it away. We do not believe that returns need to be sacrificed in order to do social good. Our 27 fund managers all actively manage their portfolios, responding in real time to market conditions. They invest differently too, deploying long equities, absolute bias or market-neutral strategies. Our structure gives shareholders a growing stream of fully franked dividends and exposure to different stocks and investment styles. This diversity has proved its value over the past 12 months, as the market is alternatively buffeted or buoyed by fiscal stimulus, the vaccine, inflation and geopolitical challenges.
Of course, Future Generation is only one player in a far bigger trend towards profit for purpose and social change philanthropy. Global business leaders Michael Milken, Warren Buffett, Bill Gates and Andrew Forrest have long invested heavily to better our communities. As Buffett explained this year: “Society has a use for my money; I don’t.”
Philanthropy can – and should – take on society’s greatest challenges.
At its best, it can identify emerging issues of scale. Many young Australians have had their futures upended by Covid-19, and they will carry the financial burden of paying back the costs for decades. This will affect how they feel about themselves and their lives.
As ReachOut chief executive Ashley De Silva noted, there was an increase of almost 50 per cent in young people seeking help during lockdowns. Butterfly Foundation described a “tsunamis” need for its eating disorder helpline in late 2020. Kids Helpline reports that, on average, 15 children a day are deemed to be at risk of immediate harm, requiring an intervention by emergency services. Across the board, there is growing demand for support by progressively younger children with increasingly complex problems.
At its heart, Future Generation is about collaboration. It’s been inspiring this year to see businesses and individuals working to alleviate our country’s mental health crisis. The challenge now is how quickly we can scale up this response.
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