When it comes to effective philanthropy, the groups that make the biggest difference are thinking strategically while acting collaboratively.

We’ve all had that thought about how great it would be if we won lotto. For most of us the first step would be to buy a home or new car, but right up there is giving to others. It’s a way to support a worthy cause that speaks to us while experiencing that tingly feeling you get when you’ve done some good in the world.

Having lotto-winner money can accomplish a lot in a small country like ours. You can still give if, like the other 99% of us, you have more limited means. But whatever amount you give, donating money comes with the connected responsibility to make sure that money is used impactfully.

New Zealanders are, per capita, some of the world’s most generous donors to charities. And we we have a lot of them – 28,870, according to Charities Services, a government department which researches and registers charities. A Philanthropy NZ’s 2023 sector survey found that only a tiny percentage of donors, roughly 2%, are individuals, with family or private trusts and foundations the biggest donors, at just under 30%. While individuals may give one-off large donations – like Wellington property developer couple Mark Dunajtschik and Dorothy Spotswood who donated $50m specifically for a new Wellington Children’s Hospital – trusts tend to spread their millions across a number of charities and sectors.

The reason for this may be about managing risk. Trusts in New Zealand look to established funds overseas and try to learn from their philanthropic successes and, equally importantly, the mistakes that led to their failures.

Pat Snedden is the former chair of Housing NZ, Counties Manukau DHB and Ryman Healthcare. He currently chairs education charity Manaiakalani, and describes philanthropy as “a kind of intelligent risk taking”.

Snedden works closely with the Next Foundation, one of New Zealand’s biggest philanthropic organisations. He says that not only does Next provide Manaiakalani with financial support, it also gives invaluable guidance on running a charity and making donations count.

From the start, Next has been led by people “who knew what they were doing in their own fields of expertise, and expected the same from us,” says Snedden. “It was so satisfying that we were being challenged, understood, and then rated for our structural heft and grounding in research.”

Charitable giving doesn’t always work so well. Sue Desmond-Hellman, former CEO of the Bill and Melinda Gates Foundation, has said that in the foundation’s early days its impact was often limited by a lack of understanding of the sectors it was entering. When even a multi-billionaire Bill Gates can struggle to make an impact, the challenges faced by our much smaller charities and philanthropists are obvious.

Take the example of the Wright Foundation, founded by the rich-lister Wright family who made their money in early childhood centres. In 2019 the foundation funded and launched a brand-new birthing unit in South Auckland, with the stated aim of improving birthcare for lower-income mothers and babies.

It was a noble goal, and there is plenty of evidence in favour of specialised birthing units. Where the Wright Foundation went wrong, experts say, is that they undertook the building of the Ngā Hau Māngere birthing centre without partnering with a public or private health provider that could offer advice and support, and eventually take over day-to-day management of the centre.

This was also compounded by the lack of a regional need for the unit, when better support for the existing Te Whatu units would have been more meaningful. Te Whatu Ora have declined to take over the management and funding of the Wright birthing centre and it risks being disestablished completely.

Smart money

The risk of non-strategic philanthropy is that you can spend a few thousand or a few million and end up with largely the same result. Fortunately, many of our top charitable organisations are working with seasoned philanthropists who have absorbed the best practices of charities around the world.

In gambling, these people are known as ‘smart money’. In philanthropy they are ‘strategic philanthropists’ – givers with a track record of success earned through their experience as donors, as well as the governance skills and personal connections they’ve developed along the way.

For Snedden, this smart money was the Next Foundation, one of New Zealand’s largest strategic philanthropic funds.

A Next Foundation video showcasing its environmental initiatives.

Next was founded in 2014 by seasoned philanthropists Neal and Annette Plowman as a limited life fund with a staggering budget of $100 million. A limited life fund is one with a finite lifespan and budget, designed to provide greater certainty to charitable recipients around long term funding. Along with the funding itself, Next has built a community around its chosen charities, who meet regularly to discuss their successes, challenges and opportunities to collaborate.

“Convening and cohering is one of the powerful tools philanthropic organisations have,” says Next chief executive Bill Kermode. Community-building puts the ‘strategic’ into strategic philanthropy, maximising the impact of ever dollar, every relationship, and every conversation.

A prime example of this is Next’s support for Predator Free 2050, which aims to eradicate all introduced mammalian predators from New Zealand by the middle of this century.

Charities had been working on ways to tackle the problem of invasive species for decades, and some had made great progress in isolation. But it wasn’t until Next and Predator Free 2050 Limited invited created opportunities for them to convene – they now meet throughout the year to tell stories, workshop ideas, and discuss ways to collaborate – that the 2050 goal started to look increasingly achievable.

The community-building approach works because it focuses on the sustainability of funding and evolving actions, rather than competing over funds or working in isolation, as in the Wright Foundation example.

As Pat Snedden put it during one of these events, “the moment when people trust each other and are across the room [from each other] and can say ‘what you are doing is a hell of a good idea, and I can help you with that’… that changes things.”

Working together to make a change

This collaborative approach has enabled groups like ZIP (Zero Invasive Predators, led by engineers and environmental scientists with philanthropic and government funding) to connect with Taranaki Mounga (a joint venture between Taranaki iwi, philanthropic funders and the Department of Conservation) and to learn from each other’s different solutions to tackling the same problems.

The next step was to get the public sector and politicians onboard, a challenge that is a lot easier to solve when you’re acting in unison, with well-connected and credentialed leaders behind you. In 2016, a government commitment to making Aotearoa predator free saw led to much closer collaboration between state organisations like DOC and charity-backed groups like ZIP and Taranaki Mounga.

Current technologies and trapping methods would not be enough to reach the goal. New scientific breakthroughs and a linked-up approach would be needed.

Predator Free 2050 has already led to numerous technological breakthroughs and conservation initiatives, many of them funded by Next Foundation. Among the most notable are the ZIP-developed Bait Tunnel, which keeps toxic rodent bait fresh while minimising risks to non-target species, and the release of endangered native birds including kiwi to new mainland territories for the first time in decades.

It’s just one success story from many in our charitable community. Long-established charities like Women’s Refuge and the Salvation Army are leading the charge on wider social issues, and they are doing it by finding new ways to operate and to collaborate with others in the same space.

Civic leaders and empathetic philanthropists accomplish a great amount of good for our small and isolated country. Understanding the world you are seeking to contribute to, and helping to build a community around it, is just as key as big donations and good intentions.

Asked about the lessons learned from his years as the recipient of charitable giving, Pat Snedden of Manaiakalani says it’s a balancing act. “You’ve got to be respectful of the funder, but also you must hold firm on the integrity of the organisation, the processes you have, and the importance of who you serve.”

If I win big next weekend, I won’t hesitate to give generously to causes I believe in. If I don’t win, I’ll still give anyway – but whatever happens I’ll be sure to keep in mind the contrasting lessons of Next and the Wright Foundation.