David Gonski hails move by Future Generation Global to measure social impact

One of the pioneers of philanthropy in Australia, veteran business leader David Gonski, has lauded a landmark move by the Geoff Wilson-founded listed philanthropic fund manager Future Generation Group (FGG) to quantify the collective social impact of its not-for-profit partners for the first time.

FGG has donated $44m to Australian charities and philanthropic institutions over the past decade.

Future Generation Australia and Future Generation Global are listed investment companies that waive their management fees and donate 1 per cent of their assets to youth-focused charities.

FGG recently launched its inaugural Impact Measurement Initiative, revealing that its 14 not-for-profits had more than 5.3 million young participants in their programs and services in 2023, as they worked to promote wellbeing of young Australians and prevent the onset of mental ill-health.

“In these difficult times, we must do everything we can to understand how our mechanisms of support are working and can be improved. In the philanthropic world, we must do more to demonstrate the crucial work of non-profits in rising to meet society’s many challenges,” Mr Gonski told The Australian.

“This Impact Measurement initiative is a rare contribution to that end and shows how Australian investors, corporations and non-profit organisations can come together to achieve real outcomes for young people.”

As one of the biggest private funders of youth mental health programs, FGG recently narrowed its social investment focus to wellbeing and prevention.

The shift followed a strategic review of FGG’s giving, which confirmed that decades of reform in mental healthcare and steady increases in government funding had failed to halt the surge in mental health conditions among young people.

More than 38 per cent of 16 to 24 year olds experienced a mental health condition in 2020-22. Suicide accounted for 30.9 per cent of all deaths in Australians aged 15 to 17 and 32.4 per cent in those aged 18 to 24 in 2022.

In the wake of the review, FGG constructed a portfolio of 14 high-potential not-for-profits, all of which are working towards the goal of promoting wellbeing and preventing mental ill-health, but getting there in different ways.

It also worked with impact measurement specialists to build a tool that allows for the tracking of individual partners’ progress, as well as the collective impact of the portfolio – a challenging and emergent pursuit.

The full report of the impact measurement initiative will be released in coming weeks.

FGG chief executive Caroline Gurney said it was the first time an Australian philanthropic group and its grantees had attempted to measure impact at a portfolio level.

“It is remarkable to see how many young Australians our portfolio of impact partners is helping. This is FGG’s first year of measuring the impact of our partners over the short, medium and long term. Going forward, we will use this data to bolster our calls for greater investment in preventing mental ill-health in young Australians,” she said.

Since its inception in 2014, FGG has donated $44m to not-for-profits.

New Future Generation chair Jennifer Westacott said the measurement initiative underpinned FGG’s efforts to grow investment and action in preventing mental ill-health in young Australians.

“Our portfolio of not-for-profit partners offers a practical way to invest in and measure prevention and we have urged the federal government to match our funding in this area,” Ms Westacott said.

“The case for investing in prevention is compelling. No other group of health conditions comes close to mental health in terms of the prevalence, persistence, and breadth of harm it inflicts on young people.

“Poor mental health affects young people’s education, relationships, employment and life outcomes and costs the Australian economy an estimated $70bn per year.

“Private giving is most useful when it embraces the role of risk capital – funding areas that have high potential to create social good, but are overlooked and underfunded by others, particularly government. Mental ill-health prevention is one such area.

Our extensive, 18-month review found that, combined, governments spend only about 1 per cent of their mental health budgets on prevention.”

Ms Westacott has long been a supporter of mental health initiatives, having chaired Mental Health Australia for seven years, and held government roles such as director of housing, running the Department of Community Services, and as Secretary of Education, Victoria.

Geoff Wilson, founder and director of the Future Generation companies, said the group had been at the forefront of helping young Australians since it was founded in 2014.

“By constructing a portfolio of not-for-profits and measuring their collective impact, we continue to be at the cutting edge of philanthropy in Australia,” he said.

“In these challenging economic times, when young people are still dealing with the significant social dislocation caused by the Covid pandemic, it is pleasing to see our partners giving the next generation the tools and support to navigate this environment.”

David Paradice, one of Future Generation’s pro bono fund managers, said: “As fund managers, we are used to measuring portfolio performance and recognising how important allocation is to overall success.”

In addition to building the case for investing in prevention, FGG’s Impact Measurement Initiative is also gathering data on the impact of untied, multi-year funding, of the type that FGG provides.

Michael Traill, founder of Social Ventures Australia, described FGG’s preparedness to focus on multi-year funding to non-profits as both “courageous and right”.

Over the last two decades Mr Trail has worked with both SVA and the Paul Ramsay Foundation.

“FGG has the capacity to provide the comfort and certainty needed for long term and transformational change,” he said.

“By backing that with a commitment to openly gathering and sharing the evidence of what is working – and what isn’t – this is a team who are leading with best practice in transparent reporting in the critical area of young people’s mental health and wellbeing.”