Speech: Philanthropy New Zealand Annual Conference
Hon John Key
18 March 2009
Speech to Philanthropy New Zealand Annual Conference
Thank you for your welcome.
It’s a pleasure to speak to you this afternoon.
I’d like to
• The Board of Philanthropy New Zealand.
• John Todd (co-founder with the late Sir Roy McKenzie).
• Robyn Scott (chief executive).
• Kevin Prime (convener of the chairs of the Community Trusts).
• Your many speakers and guests who have travelled from so far away.
• Ladies and gentlemen.
Philanthropy New Zealand plays a really important role. It brings together giving organisations from up and down the country, and connects them with each other, with the community and voluntary sector, with government, and with people and ideas overseas.
As a country, we do not acknowledge and celebrate philanthropy enough. You do a crucial job, raising its profile, and improving its effectiveness.
And, while I’m talking about effectiveness, I’d like to acknowledge your outgoing Chair, Jennifer Gill. For five years Jenny has been a huge asset for Philanthropy New Zealand, your members, and the communities they serve. I’d like to thank Jenny for her contribution.
I’m pleased that the theme of your conference is passion, pragmatism, and possibilities.
It couldn’t be any more appropriate for a newly-elected Prime Minister – particularly the bit about pragmatism – in these demanding economic times.
Because when you look at it, the new Government and the philanthropy sector are facing some of the same challenges – shrinking income, increasing demand, and everyone hoping that we’ll save the world!
But before I look to the future, I’d like to take a quick look at where we are coming from.
First of all – and this does not get acknowledged nearly enough – New Zealanders are a very generous people.
One of the joys of being Prime Minister is that I visit communities in every corner of the country, and meet people in those communities who make a real difference.
Whether it’s donating their time, money, food or effort. Whether it’s coaching a sports team, or planting trees in a local reserve, organising a fundraiser, giving koha, or helping troubled teenagers read and write. Or whether it’s digging deep to support a worthy cause when they don’t have much themselves.
Because we’re not the world’s wealthiest country. Yet, as a percentage of our GDP, we give as much, or almost as much, as Canada, Australia, and the United Kingdom - countries much richer than ourselves.
And whenever there is a crisis, Kiwis are often the first to respond. When I was in Sydney recently meeting Kevin Rudd, it was an honour to hand him a cheque for $2 million from the Red Cross for the Victorian bushfires, donated by thousands of Kiwis and businesses determined to make a difference.
Many New Zealanders answer that call to make a difference every day. And we are all the richer for it. But there is much more we can do.
That’s why, two years ago, and just after I became Leader of the Oppostion, I gave a speech at Burnside in Christchurch.
I spoke about how I want to promote a culture of generosity and giving, and how the Government needs to get behind the community and voluntary groups that make a real difference in our communities. I said I didn’t think “more government” is the solution to every problem.
A month later, I announced National's policy to abolish the cap on charitable donations, so individuals, and businesses, could give as much of their incomes as they liked to charity and still claim a rebate from IRD at the end of the year.
We also announced policies to extend the company deduction for charitable donations to a wider range of businesses, and improve the tax rules on reimbursements and honoraria.
I was delighted when the then Labour-led Government adopted almost all of these policies and included them in the 2007 and 2008 Budgets. And I’d like to acknowledge the role that Peter Dunne played in pushing for these initiatives, and helping to make them happen.
National also announced further policies associated with the funding of community and voluntary groups.
Since then, we have had the election and formed a government, and we look forward to working with Tariana Turia, the Minister for the Community and Voluntary Sector, to progress these further.
In the meantime, much has changed. The world is now experiencing the worst economic downturn in more than a generation, and this is having profound effects on our own economy – from reduced growth and increased budget deficits, to falling business profits and rising unemployment.
There is, as you know, no magic lever the Government can pull to suddenly turn our economy around. But there are a series of things we are doing, which, taken together, will make a difference.
We are reducing tax – starting on April 1, and boosting investment in our over-stretched infrastructure. We are cutting red tape and reforming the Resource Management Act. We are working to get more value out of government spending and better frontline services. We are determined to improve literacy and numeracy skills in our schools. And we are focusing on protecting and growing jobs – through things like our small business relief package and initiatives arising out of the Job Summit.
Because, despite the gloom, we need to realise that we are in a better position than many other countries.
Our banking system is in better shape than many other countries. Our interest rates have fallen a long way, and quickly. And we have some natural advantages that I believe will see us come through this recession a lot quicker and better than other countries.
We produce a lot of food, and we do that extremely well. Visitors want to come here, see our unique landscape, and share our cultural experiences. And we have people who are extremely creative and clever at doing amazing things with some pretty scarce resources.
It is this last point – our creativity and our ingenuity– where I believe philanthropic organisations and our culture of generosity have a big role to play.
The global recession is impacting on philanthropy in New Zealand. Some trusts and foundations face declining incomes and capital. If your organisation is not already scaling back the grants you are making, you may be considering doing this in the future, or using your capital to maintain your grants programmes.
Many of our larger corporates are reducing donations and sponsorship. At the same time, private giving from individuals is likely to be more fragile.
Meanwhile, families face job losses and financial uncertainty, and there will be more demand for the social and community services provided by the organisations you support.
So it’s no surprise that the community and voluntary sector, as well as philanthropic organisations, will look to the government to take up some of that strain.
But, just as there is no special lever we can pull to turn around our economy, there is no special button we can suddenly push to make up for the drop-off in philanthropic funding.
Because philanthropy is, by its nature, a non-government activity.
Its very strength is that it depends on individual people and individual businesses making choices, prioritising, and deciding where to put their own money.
Yes, the government provides a huge amount of funding to the voluntary and community sector – but we do this as a purchaser or funder of services, not as a giver of last resort
Yes, there are ways that we can do this more effectively.
And yes, as the downturn bites, we are expecting to pay more in unemployment benefits, and we do expect demand for these services will grow, but the fiscal constraints we face mean there is not going to be a lot more money available.
Our challenge is the same one we face right across government. The age of expanding budgets is over. We need to do more with the resources we have.
Like you, we need to prioritise and we need to make choices. We need to tackle our problems with greater creativity and ingenuity.
The government is exploring several fairly low-cost ideas to encourage philanthropy.
We are working to introduce a voluntary payroll giving system that allows employees to donate to community and voluntary organisations through their employer’s payroll system. This will allow employees to immediately receive the benefit of the tax rebate in their pay packet.
We are investigating gift aid – where, effectively, donors can gift the tax rebate on their donation to the organisation they have donated to.
And we are looking at gifts in kind – where people and organisations can donate goods and services, and receive a rebate on their donation.
We are also examining the refundability of imputation credits for the charitable sector.
These initiatives have some tricky issues to sort out – and I’d like to acknowledge the good work that the Government’s support partner United Future is doing in this area – but officials are working on these ideas, and we will be reporting on progress later in the year.
But is there more that we can do? How can we promote a culture of generosity and giving when we are not being a lot more generous ourselves?
First of all, we will listen. The new Government is open-minded. We are not blinkered by ideology. We will back the things that work.
Right across government, we want to open doors to the non-government and private sector that have been closed for too long. We want organisations in every sector to reach out and contribute.
Secondly, we will be honest.
We can admit that there are some things we cannot and should not be doing. We can tell you that we do not have the capacity, or the expertise, to tackle every problem we face.
Finally, and perhaps most importantly, we will lead.
We can advocate for a culture of generosity. We can ask people to think about those who are worse off than themselves. And we can encourage them to give.
But we cannot do this alone. If we are to build a culture of generosity and giving in the country, the message can’t just come from the government.
It’s also got to come from those who are generous and give. And when it comes to generosity and giving, you are the ones with the track record, the expertise, and the authority.
Together, there are many opportunities we can pursue.
Last week the New Zealand Herald reported that generosity is growing in the face of job losses. Some churches and social agencies say that, while several trusts have been forced to cut their donations, individual giving is actually rising.
As times get tougher, people are open to the message that there are others who are worse off than they are. And there is more that we, as leaders in government, and you, as leaders in the sector, can do to focus that message and inspire people to give.
Last year’s tax changes provide an excellent chance to do this.
We don’t yet know how much extra charitable giving will result from the changes, but we do know that, over time, this amount will grow.
Because I doubt that many New Zealanders outside this room know that they or their company can give any amount to charity up to their annual income and still claim a rebate or deduction from IRD.
According to a recent report by Neilson and Nick Jones, over 60% of the population aged over ten-years-old donated to a voluntary or community group in 2007. Most of this was ad hoc giving to an appeal, without much thought going to the tax implications
That is a huge pool of people who could be persuaded to donate more if they knew they could get a tax rebate.
Given the number of people involved, I think the government has a role in promoting those tax changes, and we are looking at ways to do that.
This year’s tax changes provide another opportunity to highlight philanthropy.
From 1 April, every working New Zealander will get more money in their pocket.
And while I am sure that many will use their tax cuts to pay their bills, pay down debt, or buy things they need, I am just as sure that there are many who are in a position to donate some of that extra income.
Tax cuts don’t come around often, and it seems to me that philanthropic organisations should be making the most of this opportunity.
Over the coming weeks, I’ll be reminding the people I talk to that if they can’t bring themselves to spend their tax cuts, there are many organisations who could benefit from their generosity. I challenge you to do the same.
Web-based technology presents another huge opportunity.
There are, by some estimates, close to 100,000 non-profit organisations in New Zealand. That’s an almost baffling array of causes and organisations.
It makes sense to use the web to help people get better information about these causes and ways to support them, and it’s good to see the non-government sector leading the way.
From the establishment of the Funding Information Service by the Roy McKenzie Foundation in the early 1990s, through to the more recent development of specialist giving websites – such as givealittle and donatenz – it’s clear that the web can help connect donors and recipients in so many ways.
I am aware of other web-based initiatives underway to promote community and voluntary groups and make them more responsive to potential donors, and I hope we’ll see a lot of progress in that area.
But perhaps our biggest opportunity is to more actively celebrate giving and volunteering.
New Zealanders are – by and large – very modest and self-effacing about their generosity.
Our Maori and Pacific peoples see koha – gifts of money, time, food or effort – not as something that should be highlighted, but as a regular part of honouring their responsibilities.
So when we give money or time to help or support others, we don’t tend to sing it from the rooftops
Perhaps that needs to change a little. Perhaps we need to get more used to speaking about giving, and making it a part of our common conversation.
This would not only help to publicise the good causes in our communities. It would emphasise just how widespread individual generosity is and how critical philanthropy is to the organisations that benefit. It would also inspire others to give.
But we also need to acknowledge that philanthropy isn’t just about money. It is also about time.
Much of the time and effort you put into your work is unrewarded, as is the time and effort of over a million New Zealanders who volunteer their time every year.
In fact, to a voluntary or community organisation, the time that’s donated and the expertise that comes with that time, can be more valuable than a cheque.
And as companies cut back on donations in the downturn, we need to make sure they know that their time and expertise could be worth as much as their money and sponsorship.
A growing number of businesses are teaming up with voluntary organisations where they share particular expertise that can benefit them both. Many others support paid leave for their staff, where employees spend a day on good works in the community.
And hundreds of professional firms – accountants, lawyers, and PR agencies – do thousands of hours of pro bono work for voluntary and community organisations.
Much of this goes unreported. All of it is priceless to the organisations that benefit.
If we are to promote a culture of generosity and giving in New Zealand, we need to celebrate volunteering in all its forms, and make it something that people do out of habit.
That’s one of the reasons I want to raise the profile of the New Zealand honours system, and why we are reinstating titular honours.
Of course, volunteers don’t donate their time for recognition. They do it because they want to make a difference.
But recognising their service doesn’t just acknowledge them or the work they have done, it helps build a culture of service and volunteering throughout our communities. It helps to inspire others to make their own contribution.
I’d like to finish by changing tack a little.
I know that not many people are looking to the United States for inspiration at the moment, but when I worked there, one of the things that I most admired about the country was its culture of giving.
Americans are a generous people. They are proud of the contributions they make to others. By some estimates, they give twice as much of their incomes to charity than New Zealanders.
Partly this is because they are wealthier. And partly it’s to do with their various policies.
But mostly, it’s because they have had a culture of generosity and giving ingrained in them for generations. Many see giving as a central part of what it means to be an American.
That’s the kind of attitude I want to foster here, to help those in need, to strengthen our communities, and to enrich the lives of all New Zealanders.
As we recover from the recession, and become a wealthier country, I think it is a goal we should all be aiming for.
New Zealand is a generous country. We give a lot. But there is always more we can do. And there are always those who are worse off than ourselves.
There is a limit to what the government can do. We will listen, we will be honest, and we will lead. But the rest is up to you.
These tougher economic times, the tax changes, and the election of a new Government, provide an opportunity for philanthropic organisations, your creativity and ingenuity, and the communities you serve.
Let’s make the most of that opportunity.
Let’s work with each other and reach out to voluntary and community organisations, to business, and to all New Zealanders.
Let’s promote a culture of generosity and giving in this country, and celebrate those who donate their money, their time, and their lives to others.
Thank you, and all my very best wishes for the rest of your conference.